House Sales, New Builds At Record Low
Add comment March 11th, 2009
It has been reported in the last few days that the number of new homes being built in England looks set to fall to an 88-year low.
The National Housing Federation has stated that it expects only 70,000 homes to be built during 2009/10, half the 140,000 properties that were expected to be built this year.This is the lowest level since 1921, excluding the years of the Second World War.
A separate report by the Institution of Chartered Surveyors says UK property sales between December and February remained at their lowest level in at least 31 years. Just nine homes were sold per surveyor in the three months, the lowest since the Royal Institution of Chartered Surveyors’ (Rics) survey began in 1978.
Around two-thirds of the homes will be built by housing associations, as private builders suspend developments until the market picks up, the NHF report says.
This is a long way short of the government target of 240,000 homes being built every year until 2016 with three million new homes being created by 2020.
So supply has or will soon dry up but have the buyers? OK so the amateur BTL investor have had their fingers burned and will not return to the market any time soon but I believe that the “other” buyers, i.e. the end users have not but what has happened over the last 9 months is that the finance has. We expect to see a plethora of initiatives from the now Government owned or majority owned banks in the coming months to provide usable finance. So where will that leave us? Restricted supply and increased demand which will lead to an increase in prices!