House builders warn 200,000 homes target unachievable

Aaron Morby 8 years ago

Just 6% of house builders believe that the target of 200,000 homes to be built every year is deliverable.

A survey of over 100 house builders spanning developers of all sizes by estate agent Knight Frank found the industry deeply pessimistic about raising output to the level needed to attack the housing crisis.

The survey also flagged up house builders’ dependence on the Help to Buy scheme.

More than three quarters surveyed said the extension of the scheme will lift development volumes between now and 2020.

More than 40% believed that it will increase the size of schemes undertaken in future.

Most house builders expected build rates will rise by just 10% over the next year. Just a quarter expect an uplift of more than 25% in start volumes.

Grainne Gilmore, Head of UK Research at Knight Frank, said: “The question of whether it is feasible for house builders to plug the housing hole left by the relative lack of government investment remains a primary concern.

“There is no doubt that developers have stepped up activity since the zenith of the financial crisis – official data shows completions in England rose 4.5% over the last year.

“But this still leaves development some way off the levels needed to meet demand across the UK.”

He added: “Our survey suggests however, that development volumes will continue to rise, it is just a question of whether it is going to be enough to meet that 200,000 target.”

The Knight Frank survey shows house builders and developers active in Wales, Scotland and the North East expecting some of the biggest rises, albeit from a low base.

The number of planning permissions for residential units rose most strongly in the Midlands last year.

However, the majority of house builders believe that 200,000 new homes a year is unachievable. Around 30% think that 180,000 is the maximum and only 6% say that exceeding 200,000 on a regular annual basis was achievable.

Gilmore warned: “Next year’s general election throws up some uncertainty about Help to Buy.

“Labour have not commented on their intentions around the equity loan, although they too have criticised the mortgage guarantee.

“Also, finding a suitable unwinding mechanism for the Equity Loan will be paramount in the coming years if a ‘cliff edge’ market distortion is to be avoided in six years’ time.”

Latest news

W Stirland set for administration after nearly 100 years of trading

Family-run south coast firm has been building since 1928
2 hours ago

BAM UK delivers steady first half growth

UK profit up 16% to around £40m from revenue at £1bn
2 hours ago

Crane hirer M&M enters voluntary liquidation

Family-owned mobile crane ceases trading amid soaring costs and depressed hire rates
2 hours ago

£161m funding for Oxford Railway station revamp

Kier to deliver first project under the new Rail SPEED initiative
2 hours ago

VolkerFitzpatrick wins 240km wind farm cable job

Contractor lands connections deal from energy giant Ørsted
2 hours ago

Seddon Construction returns to profit

Plan to target more diverse work pays off as construction revenue rises 27% to £166m
2 hours ago

Faults found on giant HS2 green tunnel segments

"Quality issues" found on precast segments at HS2 site pioneering off-site construction
1 day ago

Balfour Beatty UK construction returns to profit

Group profits double to £82m in first six months after construction arm bounces back
1 day ago

Bidding starts for £4.5bn Southern Construction Framework

5th generation deal includes new £1m-£5m lot for south west
1 day ago

Persimmon expands output at off-site factories

Housing giant hits 31% profit margin with another £750m returned to shareholders
1 day ago

Modular specialist Algeco lands £31m MoD double

Construction to start this year on two new sets of army barracks
1 day ago

Hill gets go-ahead for North London estate rebuild

750 homes to be built at Douglas Bader Park estate in Colindale
2 days ago

Bid race for £210m Huddersfield town centre revamp

Kirklees Council's Cultural Heart scheme will be split into two major projects
2 days ago

£100m Darlington Station revamp enabling works start

Willmott Dixon set to deliver major station upgrade project
2 days ago

Demolition worker gets huge payout after losing leg

Compensation settlement will fund latest prosthetic limb technology for site victim
2 days ago

Plant hirer Vp abandons sale plan

Chairman Jeremy Pilkington says the plant hirer failed to find a suitable new owner.
2 days ago

Turner & Townsend on board for Sheffield Supertram upgrade

Consultant to help deliver programme over next seven years after £570m funding deal
2 days ago

Green light for new £33m Ipswich logistics park

Construction to start this October on latest Trebor Developments site
2 days ago

Piling starts on pioneering double composite HS2 viaduct

Wendover Dean Viaduct ‘double composite’ structure will halve carbon emissions
2 days ago

ISG pauses work on £300m gigaplant

Construction work rescheduled to reduce costs at giant car battery plant
3 days ago

Tory leadership battle delays bidding for HS2 phase 2a

Prequalification for £5.2bn-£7.2bn route to Crewe put back to September
3 days ago

Greswolde Construction goes under

Solihull contractor ceases trading with 24 jobs lost
6 days ago

Hanson on track for UK’s first net zero cement works

20 carbon capture projects shortlisted for £1bn funding
3 days ago

Plan in for Nottingham 967-room student scheme

Vita submits plan for second major purpose built student sh
3 days ago

Galliford Try gets go-ahead for next A47 dualling job

Early 2023 start for £200m section of A47 between North Tuddenham and Easton in Norfolk
3 days ago

Designs revealed for £1bn London Blackfriars tower blocks

Fosters design landmark green office skyscraper and two blocks of flats for Southwark site
6 days ago

Everton stadium job still on budget despite inflation

Club and Laing O'Rourke confident they can still build new ground for £500m
6 days ago

Construction output falls 1.4% halting 7-month growth spurt

Fresh output and orders figures confirm summer construction slowdown
6 days ago

McLaren gets green light for £85m build-to-rent scheme

Construction set to start this autumn on major city centre development
6 days ago

BAM limbers up for £25m Bedworth leisure centre

Pioneering Warwickshire health and fitness hub to start this autumn
6 days ago

Contractor services