The government’s housebuilding target of 300,000 new homes a year by the mid-2020s has faced plenty of obstacles, but the latest figures show positive progress.
The latest figures from the National House Building Council (NHBC) have revealed that new UK home registrations have increased by 25% in the first quarter of this year compared with Q1 2021.
This equates to a total of 45,991 new-builds registered to be built across the country. Of these, 35,134 were in the private sector, while only 26,773 were private sector properties in the first quarter of last year.
Affordable and build-to-rent properties also saw an increase in registrations of 10%, to 10,857. The build-to-rent sector is seeing a huge increase in interest and investment at the moment, with many in the market expecting the niche to see significant gains in the coming years.
Strong start after difficult period
The government’s housebuilding target was first unveiled in 2017 by then Chancellor Philip Hammond. The aim was to significantly increase supply, which would to prevent skyrocketing house prices and keep enough affordable homes available for those who need them.
While the housebuilding target has yet to be met, the NHBC’s figures show a strong start to the year ahead. There are some major regional variations, too, with certain areas performing particularly strongly.
London, for example, has seen a 51% increase in new homes registered to be built there in Q1 2022, compared with Q1 2021. In England, the East and West Midlands have both seem significant increases of 65% and 52% respectively.
Both of these areas are seeing some big regeneration projects take place, and growing levels of investment there have been influenced by people and businesses leaving London in favour of other regions.
When separated by property type, the NHBC also noted that ever house type had seen an increase in registrations, contributing towards the overall housebuilding target. Detached homes in particular saw a strong rise, to a 20-year high of 16,090 registrations in the quarter.
The target was set before the Covid pandemic hit, and before the ongoing effects of Brexit were to become apparent. Rising costs as well as shortages in the industry have all negatively impacted the ability to build.
Steve Wood, NHBC’s CEO, said: “We have seen a strong start to the year with a 25% uplift in new home registrations in the quarter, reflecting a reasonably buoyant new-build market and strong forward sales.
“Material and labour supply shortages continue to be a challenge, but this is now being managed by housebuilders as ‘the new normal’.
“Inflationary pressures and the strain on household budgets may yet impact market activity, with this likely to be dampened by continued strong demand in both private sale and rental sectors.”
Housebuilding target still to be reached
In a recent interview between Michael Gove and BBC Radio 4’s Today programme, the Levelling-Up Secretary addressed the challenges that the industry has faced in meeting its goals.
“We’re going to do everything we can [to meet the target] – but it’s no kind of success simply to hit a target if the homes are shoddy, in the wrong place, don’t have the infrastructure required and are not contributing to beautiful communities,” he said.
“Arithmetic is important but so is beauty.”
The UK came relatively close to hitting the housebuilding target in 2019-2020, with 242,700 net additional dwellings recorded. This fell to 216,490 in 2020-2021, which was partly due to the effects of the pandemic slowing the sector down.
Since the government set its target, house prices have risen significantly. In 2017, the average property price was £215,113, while this figure has now risen to £276,755 according to February’s ONS figures. As such, building affordable homes also remains a key part of the promise.