Construction of homes jumped 15% in spring, ONS figures reveal, after the pandemic year saw a building slump ‘similar to the 2008 crash’

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  • 51,730 new homes opened from April to June this year, up 15% year-on-year
  • The number of new houses fell by 11% in 2020-21 compared to a year ago
  • Housing supply crunch is driving up the prices of homes in the UK
  • ONS says current building pattern similar to post-2008 financial crash

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The number of sites being developed for houses has increased by 15 percent in April to June this year as compared to the same period last year.

Data from the Office for National Statistics show that there has been a significant increase in housebuilding with 51,730 houses being constructed in the second quarter of this year.


In addition, house building openings grew by 21 per cent from the first to the second quarter.

But it came after a significant slowdown in building during the main pandemic year of 2020 to 2021, when home construction declined by the same amount as it did during the 2008 financial crisis, which hit developers and the property market was.

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Net growth in housing in the UK fell 11% in 2012-2020 compared to 2021-2020 as construction recovers after the COVID-19 pandemic.

Statistics show that the number of completed houses increased by 6 per cent to 44,940 compared to April, May and June last year. This was also an increase of 3 per cent in the previous quarter.

However, the run rate is well below the UK government’s target of building 300,000 homes each year. For this to happen, an average of 75,000 would have to be built each quarter.

Looking back further, for the full year 2020-21, the net number of additional households fell 11 per cent from a year ago, in a pattern that occurred during the 2008 financial crash, the ONS said.

This figure represents the total number of new homes completed in a year that have been demolished.

Lack of housing stock in the UK is one factor that is driving up home prices, along with low mortgage rates. Asset inflation remains high despite volatile economic conditions and rising interest rates.

According to the ONS, house prices climbed 15.5 per cent in July, although experts say the higher figure was a statistical quirk due to the end of the stamp duty holiday a year ago. Analysts expect home prices to begin to soften by the end of the year, as new mortgage rates rise sharply.

Building up: ONS figures show new buildings recovering faster after lifting of restrictions

Building up: ONS figures show new buildings recovering faster after lifting of restrictions

Rhys Schofield, managing director of mortgage broker Peak Money, said: ‘If you cut back on numbers that look big on paper, the UK needs to build 340,000 new homes a year by 2031. The government’s own target is 300,000 per year.

‘These latest figures are too low, meaning home prices may be forced in only one direction. With the lack of urgency around home building, having a place to call your home is becoming out of reach for many people.

Housebuilding trend ‘similar to financial crash’

The ONS notes that building trends are similar to those seen in 2008 amid the global financial crash, where both starts and completions collapsed. From 2009, the development started on, began to recover and during the next three years both the start and the completion level came to an end.

In 2020, there was a sharp drop in starts and completions as a result of the COVID-19 restrictions introduced in the spring. After a sharp increase in September quarter 2020, growth continued in both commencement and completion till March quarter 2021.

Start and completion both fall by December 2021. Since then, both commencement and completion have been on the rise.

Overall in 2020-21 private property developers built 78 per cent of new completed properties, housing associations 20 per cent and local authorities only 2 per cent.

According to official figures, the number of properties owned by councils in the country has been increasing steadily since 2013-14.

The councils increased their stock of properties by 216,490 in 2020-21, which is a decrease of 11 per cent from the total added in 2019-20.

The figures also reveal a decline in the number of housing planning applications approved by the year 2022. The latest provisional figures show that 280,000 houses were allowed in the 12 months before the end of June this year, which is 16 per cent. This has been reduced from 334,000 houses sanctioned in the year to 30 June 2021.

‘The overall outlook is that it is showing a reasonable level of new housing supply, but with a trend that is now on a downside,’ said Matthew Spree, senior director of planning and development consulting Litchfields. And a worrying sign in terms of what is to come is that the annual inflow of new plan permissions has markedly reduced and is now well below the level at the height of the pandemic.

‘Although the level of housing supply is better than in the immediate aftermath of the financial crash, it is heading in a downward direction when most people believe it should move towards the 300,000 mark.’

Spree also warned that the Leveling Up and Regeneration Bill has ‘good ideas’ for reforming the planning system, but it is unlikely to result in new homes by the end of the decade and that local councils will do anything before legislation is brought in. Will be reticent for New system in a couple of years.

The cost of building materials in the UK is believed to have an impact on home construction as well. UK building material prices in July 2022 were 24.1 per cent higher than a year earlier, according to the ONS.

Cost of construction: The price of building materials in the UK fell slightly in July, but figures show a 24% increase compared to the same period last year.

Cost of construction: The price of building materials in the UK fell slightly in July, but figures show a 24% increase compared to the same period last year.

And although prices fell from May and June levels this year, they are still above October last year when there was a shortage …

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