Housing starts growth spurt fizzles out

The growth spurt in house building activity enjoyed by much of the industry could be coming to an end.

housingAccording to the latest Government figures housing starts climbed again last year rising by 10% to 137,010.

This growth comes on the back of a 36% rise on 2012 and 59% jump from the trough in 2009.

But the latest quarterly figures also suggest activity may have peaked before getting anywhere near the output levels required.

Seasonally adjusted housing starts in England are estimated at 29,800 in the December quarter 2014, a 10% decrease compared to 33,250 starts in the September quarter, which itself was down 10% on Q2.

Completion figures, which always lag behind starts, are running at only 118,760, well below the 245,000 homes a year target widely accepted by all political parties as the figured required to meet housing need.

Help to Buy has had a very positive effect on private house building as the increased certainty has encouraged companies to invest in land and skills.

Housing starts amongst private sector builders increased by almost 13% in 2014, following an annual rise of 23% in 2013.

This increase in house building activity mirrors figures released last month by NHBC showing new home registrations rose to over 145,000 in 2014.

For the same period, the Home Builders Federation’s Housing Pipeline reports show a steady rise in the number of planning permissions being granted in recent quarters.

But the new quarterly figures support anecdotal evidence that major house builders may be throttling back starts as house price rises show signs of cooling.

According to the industry’s main trade body, the HBF, the recent step change in house building activity has generated over 100,000 extra jobs over the past two years.

Stewart Baseley, executive chairman at the Home Builders Federation said: “We are still way short of building the number of new homes the country needs. As we approach an election, all parties need to focus on how we can increase housing supply still further.”

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