But the number of new properties created still misses the Government’s 300,000 a year target.
The number of new homes being created has soared to its highest level for a decade as the sector benefitted from a raft of Government schemes.
A total of 222,190 properties were added to England’s housing stock in 2017/2018, the biggest increase in all but one of the past 31 years, according to government statistics.
But despite the number of new homes being created rising by 78% in five years, the total still remains short of the Government’s target of building 300,000 properties a year by the mid-2020s.
Communities Secretary James Brokenshire said: “Today’s figures are great news and show another yearly increase in the number of new homes delivered, but we are determined to do more to keep us on track to deliver the homes communities need.”
Why is this happening?
At a total of 195,290, or 88%, of the homes created in England were new-build properties.
This sector has benefitted from a number of government schemes to encourage housebuilding, including reforms to planning permission, infrastructure funds and the Help to Buy equity loan scheme, under which the Government provides an interest-free loan for a deposit to people purchasing a new-build property.
Properties that had undergone a change of use were the second largest contributor at 29,720 or 13%.
This figure includes homes that have benefited from amendments to ‘permitted development rights’, making it easier to change agricultural or industrial buildings into residential ones.
A further 4,550 homes were created through property conversions.
Who does it affect?
The increase in the number of new homes being added to England’s housing stock is good news for first-time buyers and those hoping to trade up the property ladder.
Strong house price growth in recent years has been driven by a mismatch between supply and demand.
With more new homes being created, the situation should ease, meaning house price gains should be closer to earnings growth, helping to reduce stretched affordability.
What’s the background?
The Government announced a number of measures to help boost housing supply in the recent Budget.
It is increasing the Housing Infrastructure Fund by £500m to £5.5bn to enable 650,000 properties to be built.
There will also be a new scheme to provide £1bn of guarantees to support lending to small and medium-sized housebuilders through the British Business Bank.
Other measures included £653m of funding for strategic partnerships with nine housing associations to deliver 13,000 new homes, and an end to the Housing Revenue Account cap, which limits the amount of money local authorities in England can borrow to build new homes.
Top 3 takeaways
- The number of new homes being created soared to its highest level for a decade last year
- A total of 222,190 properties were added to England’s housing stock in 2017/2018, the biggest increase in all but one of the past 31 years
- But the number of new homes being created still remains short of the Government’s target of building 300,000 properties a year by the mid-2020s