Housing starts in the UK are the lowest since 1945

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by Lin Freestone

According to the latest construction output forecasts published by the Construction Products Association, there has been a 27% fall in new housing starts in the UK this year. The figure of 147,000 new housing starts is the lowest since 1945.

Private sector housing starts are forecast to be down by 30% to the lowest level since 1992, whilst the social housing programme is failing to grow in line with the government’s plans for 45,000 new homes a year by 2011.

The forecasts for the whole of the construction industry show that the previous expectations that the industry would grow in 2008 have now been reversed and output is expected to decline by 1.3%.

Michael Ankers, Chief Executive of the Construction Products Association, has stated that the impact on the new build housing market has been more severe than was anticipated. To be starting fewer new homes than at any time over the last 60 years illustrates the scale of the problem now faced.

He considers that, unless something is done urgently to address this problem, the capacity in the industry will be cut to a level which will take a long time to build up and it will not be able to meet the inevitable pent up demand for new housing.

In response to these forecasts, the CPA is asking the government to respond urgently to the housing crisis in several ways. First, by providing help for first-time house buyers to secure mortgages. Then to investigate ways in which the Monetary Policy Committee interest cuts can be fed through to mortgage payers. It is also asking the government to increase its social housing ownership scheme.

Michael Ankers also maintains it is essential that the government remains committed to the Capital Investment Programme as set out in last year’s Comprehensive Spending Review. The Construction Products Association acts as the voice of the construction products sector, representing the industry-wide view of its members.

However, the decline in the housing market, the sharp fall in investment in new industrial buildings, and reduction in the repair and improvement to existing social housing, is offset by buoyant construction work on infrastructure projects.

Work has started on building the 2012 London Olympics projects, and contracts are being let for the Building Schools for the Future programme. These projects will go some way to reducing the impact of the housing downturn on the construction industry.