Housing completions could fall below recession levels, says report

The number of completions in 2012 could fall below the number of completions seen in the recession, according to the report by BNP Paribas Real Estate and consultant Tristan Fitzgerald Associates.

The research (16-Pages / 5MB PDF) demonstrated that the number of completions in 2012 is likely to fall below 100,000 for the first time since the recession in 2009. 110,000 new homes were completed in England in 2011 and the figures for the first part of 2012 are worse than those for last year.

The number of new homes completed in the first part of 2012 was 18% lower than for the same period in 2011, the report said.

“With more than 1,800,000 households on council waiting lists for new homes, the third Housing the Nation report revealed that the Government is again on track to miss its targets, by a worryingly large number," said Tim Cann, head of residential property at BNP Paribas Real Estate.

"To put this into perspective, losing 85,000 homes is like losing a town the size of Bournemouth. As the UK continues to lack the new housing it requires, effective changes need to be made in order to accommodate those still waiting for affordable housing,” he said.

Local authorities in England have reduced housing targets to around 160,000 units per year, a reduction of 13% from the target in the Regional Spatial Strategies (RSS), the report said.

Relative to the RSS figures, the North East is now estimated to have marginally increased its targets, showing a 1.4% increase. However, all other English regions show a loss. Proportionally, the greatest loss is in the Midlands, where targets have been cut by 21.5%. In absolute numbers, the highest cut has been in the South East, with a reduction of nearly 10,000 houses per year, the report said.

“Although the UK economy continues to struggle, the Government cannot afford to be complacent when it comes to the creation of new homes," said Dan Angell, account director at Tristan Fitzgerald Associates.

"In order to keep the housing market alive, the Government needs to introduce swift changes which will ensure that current housing targets are not only met, but that they are not further reduce," said Angell.

The report makes a number of recommendations, including the release of green belt land in the South East and publishing league tables on housing targets and delivery by local authorities with penalisation for those failing to meet targets.

"Plan makers and developers to be more creative in the way they engage with communities and young people to outweigh the anti-development groups within these local communities," the report recommended.

It also recommended that money raised from the Community Infrastructure Levy must be spent quickly and visibly on community facilities to secure community buy-in to new development in their areas.

The report recommended proposals to increase the cost of planning application fees, but only on the provision that the quality and speed of service is made better in return. The report also recommended including a "development projects team" within the Government to prevent major schemes being stalled by burdensome local demands.