A new analysis suggests that the building industry in England and Wales needs to boost the construction of new homes by almost 82,000 a year to meet Government target of 300,000 per annum by the mid 2020s.

The house building industry in England and Wales is now worth £38 billion a year and growth is leading to more affordable homes being built and money invested in land for new homes.

This is delivering a huge boost to the British economy with a 74% rise in house building activity in the last four years, according to a new report from planning and development consultancy Lichfields for the Home Builders Federation (HBF).

But new home building is still not sufficient to meet the much talked about Government ambition of 300,000 properties a year by the mid 2020s, falling short by almost 82,000 a year.

However, it suggests that the desire for further increases in supply, the knock-on benefits are set to increase still further with some £12 billion being invested in land for new homes in 2017 and 50,000 affordable homes being agreed through s106 agreements worth over £4 billion.

Indeed, the provision for affordable housing has almost doubled from the £2.3 billion recorded in the last analysis done by the firm in 2015.

But more needs to be done to increase the delivery of new homes. The report points out that last year net additional dwelling completions across England and Wales totalled just over 224,000, or approximately 218,400 excluding conversions. The scale of delivery has been characterised by a marked increase over the last few years, but annual delivery is still falling short of the 300,000 per annum target by around 81,600 each year.

It also points out that in 2015 many house builders were still suffering effects of the financial crisis and recession but for many the outlook has markedly improved and the overall rate of housing delivery has been increasing year on year.

‘Across both England and Wales, house building has become even more of a policy priority for the Government, recognising that for 30 or 40 years the supply of new homes has simply been too low. The analysis demonstrates the significant contribution that house building makes to the economy and its ability to drive economic growth and maintain prosperous economies, as well as providing much needed housing to support sustainable communities,’ the report concludes.

Stewart Baseley, executive chairman of the HBF said that the contribution needs to be built on. ‘The house building industry is a massive driver of the UK economy and makes a huge contribution to communities across the country. While delivering much needed new homes of all tenures, house builders are quietly creating and sustaining jobs, generating receipts for the exchequer and boosting investment in infrastructure and amenities in villages, towns and cities,’ he commented.

‘As well as becoming ever more reliant on private builders to deliver affordable housing through planning agreements, vast sums are ploughed into new roads, schools and community facilities every year. The unprecedented increases in housing supply in recent years have delivered significant benefits for the UK and the industry is investing in more land and people to enable it to go further and build more,’ he pointed out.

He also explained that the industry wants the Government to work with it to create the policies that will allow it to deliver the ambition of 300,000 homes a year in England. ‘Delivering more homes will not only help solve our acute housing crisis, but also provide a further boost to communities and economies up and down the country,’ he added.

According to Matthew Spry, senior director at Lichfields, it is vital that the Government recognises the value of the industry going forward. ‘It is important that this contribution is properly recognised in planning and investment decisions across central and local government, agencies and Local Enterprise Partnerships,’ he said.

Source: PropertyWire