Housebuilding slumps 24%

Permalink: Housebuilding slumps 24%
by Kay Murchie

Figures from the Department for Communities and Local Government have revealed that there were 32,100 new housing starts in England in the first quarter of 2008.

This figure was 21% lower compared to the last quarter of 2007 and 24% down compared with 12 months ago.

The figures are on their way to being the lowest for almost 10 years and show just what a dramatic affect the credit crunch is having.

The continuing problems in the mortgage market and a weakening economy means the decline in housebuilding will continue, according to David Stubbs of the Royal Institute of Chartered Surveyors.

Mr Stubbs added that the Government’s pledge to build 3 million homes by 2020 is under threat.

A spokesperson from the National Housing Federation (NHF), which represents housing associations to provide affordable housing, aadded that it is going to be difficult and the Government is going to have to be careful if it is going to meet its target for social homes.

Stewart Baseley of the Home Builders Federation (HBF) is urging the Government to help the market and added that action needs to be taken now to prevent widespread redundancies in the housing industry.

Earlier this week, Barratt Homes reported a 33% decline in the amount of sales agreed each week, compared with last year and added that the property market has deteriorated considerably.

Furthermore, other housebuilders Redrow and Galliford Try, warned of significant falls in sales over recent weeks.

Earlier this month, there were warnings from other housebuilding giants including Bovis Homes, Persimmon and Taylor Wimpey.

Persimmon recently confirmed that it is to stop building on new sites until market conditions improve, which could result in tens of thousands of job losses.