Date Published 28 May 2012
Building of new housing has fallen sharply this year. According to the Office for National Statistics, there were 24,140 house-building starts in the first quarter, down 11% on the previous quarter.
Private house-building starts were 8% lower and social housing starts were 21% lower.
Simon Rubinsohn, RICS chief economist, said: `The data clearly demonstrates that housing delivery is falling well short of expectations.
`There are good reasons for expecting government policy to gradually have an impact on the level of starts. The NewBuy mortgage indemnity scheme only started a couple of months back and is taking a while to gain traction.
`More important for the medium term could prove to be the planning changes that have been pushed through by the Government. But even if the measures do begin to pay dividends, it is hard to see to the increase coming anywhere near the level of new housing required.
`Indeed, a key factor continuing to hold back development at the current time and probably for the foreseeable future is the lack of access to development finance.`
Noel Meredith, director of United Trust Bank, said: `Housing and construction is hugely important to the UK economy, and what appears to be one of the key factors holding back activity is a decline in the availability of development finance.
`It’s clear there’s still little appetite from mainstream lenders to increase the availability of development finance, with them either restricting their development finance books or withdrawing from the sector altogether.
`However, lenders such as United Trust Bank are keen to provide finance for well-planned developments in the right housing sectors and locations. Other lenders have come and gone but we have been consistently active in development finance, and we’re always happy to talk to developers and brokers seeking residential development or short-term finance.`