Number of new homes built rises by nearly a third.

  • By Nicky Burridge

    May 21, 2015 00:00
  • The number of new homes being built in England soared by nearly a third during the first quarter of the year, figures showed today.

    Around 40,300 properties were started during the three months to the end of March, 31 per cent more than in the previous quarter and 11 per cent higher than for the same period of last year.

    The increase was driven by higher building levels among both private developers and housing associations, according to the Department for Communities and Local Government.

    The number of new housing starts by private enterprises was up 30 per cent compared with the previous quarter, while starts among housing associations were 36 per cent higher.

    "We now seem to be on the cusp of a modest lending recovery"

    Property completions also increased, with 34,040 new homes finished during the three months, 21 per cent more than in the first part of 2014.

    Housing starts are now 136 per cent higher than the trough they reached in the first quarter of 2009.

    But despite the steep increase, they still remain 18 per cent below the previous peak in 2007, before the property market correction struck.

    New build levels also continue to fall well short of the number of new homes required to keep pace with demand.

    Around 140,500 properties were started in the 12 months to the end of March, compared with an estimated 250,000 that need to be built each year.

    The figures came as the Council of Mortgage Lenders predicted activity in the housing market was set to pick up, despite lending stalling in April.

    A total of £16bn was advanced during the month, 1 per cent less than in March and 4 per cent down on April last year.

    But the group predicted lending levels would recover in the months ahead.

    Mortgage approvals for house purchase have averaged 61,000 a month since the beginning of the year, and the Bank of England expects them to increase further to 65,000 by the fourth quarter.

    Both buyers and sellers are also expected to return to the market now the uncertainty caused by the General Election has been removed.

    Mohammad Jamei, CML economist, said: “Although lending in April was fractionally down on the previous month and year, this followed a stronger March. “Overall, we now seem to be on the cusp of a modest lending recovery.

    “Household finances are generally improving as earnings growth continues to outstrip inflation, and mortgages are being offered at extremely competitive rates. As a result, we expect to see stronger lending in future months.”

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