More homes are being built across the UK in 2017, but there could be another large shortfall in supply if the government gets back into power, thanks to its ambitious promise of providing half a million new homes in the next term of office.
Theresa May’s Conservative party has been promising the construction of new homes across the nation for some time now, but in her manifesto for the upcoming snap election, the government said it will up its target, promising 500,000 new homes nationwide by 2022.
In the first quarter of this year, there has already been a climb in the number of homes being built, but there are complaints that this might not be enough to meet the new target if the Conservatives retain a majority in Parliament. This could open the door for further investment in the purpose built private rented sector, which has the ability to create more bedrooms in high demand areas in relatively short timescales.
Rise in new-build developments
For the first three months of this year, Department of Communities and Local Government (DCLG) data shows that there was a total of 43,170 new homes started across the nation. This is an encouraging figure at the beginning of the year, because even at a time when housing starts are perhaps not as prevalent, it marks a three per cent rise compared to the three months before.
This data also suggests a 21 per cent rise in starts over the course of the last 12 months. This marks a serious uptick in the number of homes that are coming to market both for sale and rent over the next couple of years.
In terms of properties that have been completed, the data also shows a marked increase in recent times. DCLG’s report indicates that in the year to the end of March, there was a climb of around nine per cent in the volume of completed properties ready to come to market.
In the last year, there have been almost 150,000 new homes completed across the UK, which marks a significant dent being made in the government’s original plan of bringing 400,000 new properties to market by the end of the decade. But with Theresa May poised to add another 100,000 to this target, it could mean an additional struggle for a sector that is already going all out to meet demand.
Craig Hall, new build manager at the Legal & General Mortgage Club, said that if the Conservatives do retain power on June 8th, then efforts will need to be stepped up in order to ensure new targets are not missed.
“The simple fact is that more houses need to be built across all tenures, shared ownership, private rental, and owner occupier. New build offers the perfect opportunity to restructure our housing market once and for all, by tackling our nation’s chronic housing shortage,” he said.
The changing shape of the UK’s property market
The government has taken steps to encourage new build housing across the UK however, it is not a case of one size fits all. The country’s demographics are changing and the way people live has adapted over time.
The Build to Rent sector has emerged as a key player in this movement. Companies like Experience Invest which provide student accommodation investment opportunities. Over the last few years student accommodation has emerged as a good investment as the yields are generally higher than traditional buy-to-let property. This style of property also helps to ease the number of students living in residential property or HMOs, which would be more suitable for young professionals and families.
And with the purpose-built accommodation market really starting to ramp up its efforts over the last few months, it really could soon be the case that places in high demand like Liverpool, Leeds, Manchester and Luton, and the investors therein, are pushing the country towards meeting its construction goals.