Builders revise targets as H2B boosts new starts
The Department for Communities and Local Government published the latest quarter’s housing starts which showed a 6% quarterly increase to 29,510 homes.
John Stewart, director of economic affairs at the Home Builders Federation, said: “A very strong year-on-year increase in housing starts in the April to June quarter shows the industry responding to increasing consumer confidence and demand.”
He said there was no doubt that the equity loan part of Help to Buy has had a “considerable” effect, already helping 10,000 new home buyers in the first four months.
And he added: “We have already seen companies revise their projected build levels as a direct result of the scheme. This in turn will create jobs and deliver an economic boost.”
Private housing starts increased 7% to 23,990 against this previous quarter whilst public housing starts dropped 3% to 5,110. Against the June quarter of 2012 private starts were up 33% and public housing 28%.
Andy Frankish, new homes director at the Mortgage Advice Bureau, said: “This is by far the most successful new home initiative we have ever had and for the consumer it has allowed them to purchase where they previously were not able through either lack of deposit or affordability.”
Frankish added that while demand for new homes is not yet outstripping supply if the current trend continues developers will not be able to find land and build more houses quickly enough.
He said: “We are still emerging from a recession so everything needs to catch-up. This creates a concern about stability and about the government Help to Buy scheme.
“What we don’t want is to create an artificial house price bubble in a new build market which is why the Help to Buy guarantee scheme to be launched in January next year is so important for the second hand market.”
Housing completions dropped 4% against the June quarter of 2012 to total 27,270 but the figure was a 9% rise on the previous quarter.
Against the previous quarter private completions increased 11% to 22,110 and those for public housing were up 3% to 4,940.
Compared to the same quarter in 2012 private completions rose 2% whilst public completions fell by 25%.
Frankish said: “We are seeing more smaller developers come back into the market and sites that may have been mothballed now being built on again.
“There has also been a significant shift in the type of property being built with much less apartment and town houses and a move to more traditional three and four bed houses.”
And Stewart wants this new momentum in the house building market to continue.
He added: “To build on this momentum it is vital that the planning system and local authorities across the country deliver enough land to meet the new higher level of demand and ensure that the outlook for new homes delivery remains positive.”