Only 165,000 new properties were built in England last year.
Just 165,090 new homes were built in England in 2018, well short of the Government’s target to have 300,000 additional properties completed every year.
There was also no increase in the number of properties started during the year compared with 2017, despite a raft of government measures to accelerate housebuilding levels.
Most worryingly of all, the Ministry of Housing, Communities and Local Government figures showed a sharp fall in building levels during the final quarter of the year, with new starts dropping by 8% compared with the previous three months.
The housebuilding industry has failed to recover since the global financial crisis, with the number of new properties started in the final quarter of the year still 17% lower than the peak reached in the first quarter of 2007.
It appears unlikely that the Government will fulfil its 2015 pledge to build one million new homes by the end of 2020.
Why is this happening?
Housebuilding levels are being held back by a number of factors, ranging from a shortage of labour and building materials to the length of time it takes to get planning permission on land.
The sector has also been impacted by the slowdown in the wider housing market as a result of Brexit uncertainty and stretched affordability.
Who does it affect?
The low number of new properties being built means the mismatch between supply and demand looks set to continue, which will put further upward pressure on prices.
The situation is bad news for anyone who wants to get on to the property ladder or trade up it.
Estimates for the number of new homes the UK needs to build each year to keep pace with population growth range from 240,000 to 340,000.
But housing completions have not reached even the lower end of this level since the 1970s.
What’s the background?
In September 2015, the Government pledged to deliver one million new homes by the end of 2020.
But with just two years to go, only 504,650 new properties have been completed in England.
Additional homes will have been added to the country’s housing stock through conversions and change of use, although homes created in this way only reach the low tens of thousands each year.
In its election manifesto in 2017, the Conservative reaffirmed the commitment to build one million new homes by 2020, adding a further pledge to build an additional 500,000 properties on top of this target by the end of 2022.
The Government has also previously stated that it plans to increase the housing supply by 300,000 new properties a year by the mid-2020s, as part of a five-year £44 billion housing programme.
Last year housebuilding levels reached a 31-year high, but at 220,000 the figure was still significantly below this target.
In 2016, the Government allocated £1.2 billion to build 200,000 Starter Homes, which would be sold to first-time buyers at a 20% discount, but no properties have so far been built under the scheme.
Top 3 takeaways
Just 165,090 new homes were built in England in 2018, well short of the Government’s target to have 300,000 new properties completed every year
There was no increase in the number of properties started during the year compared with 2017, despite a raft of government measures to accelerate housebuilding levels
Building levels fell by 8% during the final quarter compared with the previous three months