Premier Guarantee warns of affordable housing shortage
Analysis of the housebuilding sector by Premier Guarantee said the affordable housing crisis is worsening by 165 homes per day.
Although the number of homes being built is increasing, with a 17 per cent rise in new homes completions in the first quarter of this year compared to the same period in 2005, 70 per cent of all homes built are now priced at more than £150,000.
The increase in housebuilding also masks a sharp fall in the number of affordable homes being built by housing associations.
Of the 52,140 applications to build new homes in the first quarter of 2006, just 6,317 were by, or on behalf of, housing associations – 11 per cent down on the same period of 2005.
This reduction in the building of affordable homes is at odds with the Government’s efforts to improve the supply of low cost homes for struggling first-time buyers and those priced out of the housing market altogether.
Furthermore, whilst the overall increase in housebuilding might be seen as an improvement in housing supply, this perception hides the reality that Britain’s housing shortage is worsening rapidly with just 170,000 new homes being delivered each year whilst 230,000 new households are being formed annually, according to Government figures. This means that in a best-case scenario, Britain’s housing shortage is worsening by 60,000 homes a year, or 165 homes per day.
Robin Plaster, sales and marketing director for Premier Guarantee, said: “Although there has been a substantial increase in new housebuilding, any notion that the housing crisis is being tackled or that the situation for first-time buyers is likely to ease, can be firmly dismissed.
“The Government must do more to assist first-time buyers with the expansion of the shared equity scheme, along with the release of Government-owned land for the creation of more low-cost homes which are truly affordable.”
According to the Halifax the average age of a first-time buyer is now 33, resulting in high numbers of young people in their twenties and thirties being left with no choice but to continue living with their parents, unable to afford a home of their own. If there are not enough suitable properties on the market, the Government’s shared equity schemes will only serve to push prices up higher by creating hundreds of thousands more potential owners while failing to provide enough new homes.