UK Housing Starts Rise 6% in Three Months, Official Figures Show

on Aug 16, 2013
Listen Friday, August 16th: The UK’s housing market seems to have emerged from a half-decade-long slump in homebuilding as government initiatives such as the Help to Buy equity loan scheme, which started at the beginning of April, helped boost the number of housing starts in the last quarter.

The Department for Communities and Local Government yesterday released new construction data, which showed that 29,510 new homes were started between April and June this year, some six percent higher than the previous quarter, and a third higher than the same time last year. The pick-up in building activity was driven by private housing starts, which rose seven percent to 23,990 on a quarterly basis, while starts by housing associations were three percent lower at 5,110. The number of homes completed in the second quarter was nine percent higher than in the first three months, at 27,270 new homes.

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In the 12 months to end-June, construction work started on 110,530 new residential properties, a seven percent increase on the previous year. The figures also showed that annual housing completions were down nine percent compared to the previous year. While starts for the second quarter were 73 percent higher than in the first three months of 2009, they were still 40 percent off their peak level in 2007, before the UK housing market crash brought construction to a near standstill.

The increase in new homebuilding was recorded across the country and not just in the dominant South, with 178 of the 326 councils in England reporting an increase in housing starts over the year. Construction activity has been strong in areas including the M5 corridor between Devon and Worcestershire, north of the London green belt, Leicestershire, south Lincolnshire and Cumbria. Housing starts have been “generally low” in areas that include a band running from Birmingham up to Manchester and spreading to North Yorkshire. Eastern parts of Kent and Norfolk have also seen less house-building, according to the government estimates.

**More Is Needed to Tackle Housing Shortage, Charity Shelter Says**
Communities Minister Brandon Lewis hailed the latest construction figures as evidence that the UK housing market had turned the corner. Yesterday he said that under the last administration, building activity had fallen to its lowest peacetime rate since the 1920s, but the new data was showing that government action was bringing confidence back into the UK housing market. “There is more to do, but today’s figures reinforce the momentum towards getting Britain building again,” he added.

Some analysts warned, however, that the latest government figures should be treated with caution. Housing charity Shelter said that the 110,530 new starts in the year to end-June were less than half of what was needed to tackle what it calls the chronic shortage of homes across the country.
Shelter’s director of communications, policy and campaigns, Kay Boycott, called for radical action to tackle the problems of the UK housing market. Boycott was quoted by The Guardian as saying yesterday: “While the government may trumpet these figures as a growth story, what they really show is that we are still building less than half of the 250,000 homes we need each year to meet demand.”


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