With the exception of lockdown, new home registrations have bumped along consistently for the last 15 years. But things are changing – and we should be deeply alarmed.
Latest data, out this week, shows the number of new homes planned by housebuilders fell by almost half last year.
According to the figures compiled by the National House Building Council new home registrations fell by 44 per cent in 2023 compared to the year before.
This should be a cause worry to everyone – buyers, agents, those in the construction industry and not least, our politicians.
It’s not like this was hard to predict. Rising labour, material and borrowing costs, rocketing land prices and falling end product sale prices have combined to make building new homes riskier than they have been for years.
Our treacle-like planning system hasn’t helped either.
Be honest, if you were sitting on some prime land right now, would you invest millions to build? Or would you sit tight and wait for easier times? I know what I’d be tempted to do if I was in that happy position.
It’s believed at least 300,000 is the number of homes needed to keep up with demand annually.
But let’s be realistic – we’re not going to get anywhere near that anytime soon. Certainly not this year.
So with our population growing at a million a year, and more of us living in smaller households, the question is: just where is everyone going to go?
My guess is to ever smaller properties. This lack of new building will also see a rise in shared HMO’s, an increase in rented spare rooms and more and more people staying in the family home to an even later point in their life.
Plans to progress careers, start relationships, have kids, settle down and be sensible will get more out of reach than ever too.
This really matters. Make no mistake, a lack of decent housing for people to buy or rent securely undermines society as we know it. People get restless, they are left thinking there is nothing to lose, nothing to vote for and nothing to work towards. We can all think of examples where we’ve seen it and possibly experienced it ourselves.
With The Budget next month things may brighten. Buyer incentives will see more developments started. Easing inflation and interest rates will help too.
But this downward trajectory comes at the very time we need it to be shooting upwards.
And is going to be bad news for everyone.
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