Housebuilding in the UK hit a 10-year high last year with more new homes started and completed since the financial crisis. Can the industry maintain its momentum as market competition intensifies?
According to the latest statistics from the National House Building Council, the number of new homes registered to start in 2017 grew by 6% last year to 160,606, marking a very positive start to the 300,000 new homes target set by Theresa May last year. The number of actual completed properties hit 147,278, which was an increase of 4% and the highest level seen since 2008.
The analysis split the UK into 12 regions, nine of which saw more properties registered to be built than the previous year. The highest levels of new-builds were in the east midlands, Wales and the north-west of England, although London also saw an increase to 17,850 homes.
Steve Wood, NHBC’s chief executive, said: “Our figures show the market has delivered strong growth resulting in the highest new home figures for a decade and growth across the majority of the UK, including London for the first time since 2014.”
Rising competition for land
Conditions for housebuilders in recent years have been favourable, with little competition for residential development land, but the market could be set to change, according to Savills.
In the year to the end of June last year, the number of planning consents granted in England increased by 16%, and average greenfield land values have risen well below the rate of new-build house prices – while there is still half the amount of housebuilders registered with the National Housebuilding Council than there were pre-financial crisis.
All of this has meant builders have seen reduced competition, but with the government’s 300,000 a year new homes target – which is 38% higher than what is currently being built – demand will rise unless more land becomes available.
Emily Williams, senior residential researcher at Savills, said: “For now, land market conditions remain benign for major housebuilders, but they face increasing competition from other players, both for strategic and shorter term land, ready to build out.
“To maintain benign conditions we need to see much more land being brought forward, with more planning consents in the areas where demand is highest.”
