For the first time in many years all the house-building stars are alignedby Kit Malthouse / January 28, 2019 / Leave a comment
The impact of the 2008 financial crash on the housing market was profound. Within just a few months, the entire structure of delicately intertwined financing that underpinned the homes in which we live unravelled and near collapse ensued. In the aftershock, the number of new homes in production plummeted, as half of smaller builders went to the wall, and the big players retreated, licking their near-fatal wounds. All of this was fuel to the flame of a problem that has dogged this country for decades: we simply haven’t built enough houses.
In 2007-8 there were 223,530 net new homes added to the stock. After the collapse of Lehman Brothers, this number fell to an all-time low of 124,720 as the country and world struggled with the mother of all hangovers. With the UK’s growing population this resulted in higher prices and rents, and a fall in ownership among the young. That most British of dreams, owning your own home, was drifting away from many.
Happily, though, the long slow battle to restore that dream is now bearing fruit. After many years of work by my predecessors, funding, supporting, cajoling and reforming, the house building industry has seen an almost unprecedented growth in output. The net new additions to the stock for 2017-8 mean we are finally back to pre-crisis levels, with leading indicators for the next year looking even better. Home ownership among the young has also stabilised after many years of downward trends.
Now we want to press on further, and make a start on tackling the repressed demand caused by decades of undersupply. The prime minister has set me a target of building 300,000 new homes a year by the mid 2020s. She has also given me the resources I need to do it, with over £44bn in committed financial support. 2019 has therefore become a pivotal year as we begin the next quantum leap for the industry and country.
In the past few months we have laid some of the foundations for prodigious growth: a brand new planning rule book designed to bring more certainty and reduce risk for developers; more resources for council planning departments; and billions for new construction technology. We have opened up more land for development and put hundreds of millions behind smaller builders. We’ve also set councils free by abolishing the cap on…