To hit the Government’s target of building one million new homes by 2020, England needs to build an additional 174,000 homes every year, a new review has revealed.
The National Audit Office (NAO) has come to this conclusion after reviewing the housing market in England as well as the Department of Communities and Local Government’s housing strategy and housing policies overall.
The need for additional housing has been on the rise in recent years in England across the board, with London experiencing the most dramatic increase.
Amyas Morse, head of the National Audit Office, says, “The need for housing in England has in recent years grown faster than its supply, and housebuilding needs to increase across the country.
“The government has responded to this by putting in place a range of policies to increase housing supply and home ownership. Central to this is an ambition to increase the supply of housing by one million homes by 2020, largely through support to private housebuilders. Delivery of this target will not require a substantial increase in current levels of housebuilding.”
Recently published projections revealed that between 2011 and 2021 at least 227,000 new households will be formed every single year. This new number represents a drastic increase to the 166,000 homes formed annually over the ten years prior.
The NAO therefore explained for the Government to hit this target, England needs to create 174,ooo new homes – new and converted – every year.
December House Price Index: Annual Price Growth Stable Going Into 2017
The report, however, also mentions a lack in clarity when it comes to the impact the Brexit decision will have on the market overall. Whilst early indications were leaning towards a slowdown in interest, more recent figures revealed an increase in sales agreed in England.
Whilst housing has become more affordable for existing homeowners, with only 19% of homeowners spending a quarter of their disposable income on a mortgage (down from 40%), first-time buyers have had a tougher time with social housing rents increasing faster than than earning since 2001-2.
