The increase in demand for residential properties, coupled with restricted supply of new homes being built, will almost certainly cause property prices and rents to increase over the next few years, fresh research suggests.
The number of new build homes that have started to be built has increased over the past 12 months, but the government looks set to fail in its aim to build the 300,000 new homes per year deemed necessarily by the mid-2020s, placing upward pressure on house prices and rents.
A survey of more than 400 housebuilding companies in England, carried out for construction consulting and design agency, McBains, found that more than half of developers - 57% - have increased the rate at which they have built new homes over last year and predict a further rise over the next 12 months, but they are not developing anywhere near the level of new homes needed to meet growing housing demand.
Overall, housebuilders said they had built, on average, 201 homes over the last year. This was expected to rise to 297 over the next 12 months.
But respondents to the survey cited worries over land availability, slow planning permission and skills shortages as barriers to preventing them building more homes, with almost half - 48% - identifying these factors as making it difficult for the government to meet its target of 300,000 homes a year on average by the mid-2020s.
Of the homes to be built over the next 12 months, housebuilders expected one in five - 22% - of these new homes to be classed as affordable homes for rent or sale.
Clive Docwra, managing director of McBains, commented: “The survey is encouraging in that housebuilders are increasing the rate at which they are building homes.
“However, issues such as a lack of appropriate land, slow planning permission and skills shortages remain significant factors holding back construction, which is why the majority of respondents are sceptical that the government’s housing targets will be met.
“In particular, the construction industry relies on thousands of skilled EU workers because of skills shortages in the domestic workforce, and with these workers potentially prevented from working in the UK after the Brexit transition period ends in 2021, many housebuilders will be struggling to find the workforce needed to build the new homes that are urgently needed.
“And for those people struggling to get a foot on the property ladder, the finding that only around one in five of new homes to be built over the next year will fall into the affordable category will be disappointing.”