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Britain heads for worst house building decade since 1940s

Britain is heading for the worst house building decade since World War Two.

Despite Government efforts to boost house building, completions in England between 2010 and 2019 are set to average out at around 130,000 per year.

This is well short of the 147,000 achieved in the 2000s or the 150,000 of the 1990s, and half of the level in the 1960s and 1970s.

The picture becomes even worse when population size is factored in.

In the 1960s, the new-build construction rate in England was roughly the equivalent of one home for every 14 people over the decade. In the 2010s, that ratio was one to 43, more than three times higher.

The figures are improved somewhat when you factor in conversions of existing properties, which push the total up – but even then, the total of net additional dwellings – the yardstick for overall housing supply – is likely to be lower this decade than last.

Across the United Kingdom as a whole, the pattern is broadly similar, with house building falling from a peak of 3.6m new units in the 1960s to 1.9m in the 1990s and 2000s, with the 2010s set to come in lower still.

Robert Colvile, Director of the Centre for Policy Studies, said: “The housing crisis is blighting the lives of a generation, and robbing them of the dream of home ownership.

“But as this analysis shows, this is not just the consequence of the financial crisis – it is part of a pattern stretching back half a century, in which we have steadily built fewer and fewer new homes.

“The Government has rightly promised to focus on this issue, and there are encouraging signs that housebuilding is picking up.

“But ministers need to take bold action in 2019 to ensure that the 2020s become the decade in which we break this hugely damaging cycle.”

Source: Construction Enquirer

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Housing crisis: England needs four million extra homes

England faces a shortfall of almost four million homes, as the housing crisis continues to rage across the country, according to research.

To meet the backlog and provide for future demand, the country needs to build 340,000 homes a year until 2031, the research carried out by Heriot-Watt University found.

And 145,000 of these new homes should be affordable, with 90,000 for social rent, 30,000 for intermediate affordable rent and 25,000 should be for shared ownership.

The government’s current target is to build 300,000 homes for first-time buyers a year.

Those in desperate need of accommodation include homeless people, private tenants spending huge amounts on rent, children unable to leave the family home, and couples delaying having children because they are stuck in unsuitable housing, the National Housing Federation (NHF) and charity Crisis said.

Government action

They have now called on the government to take action to tackle the problem, which is expected to publish a social housing green paper this summer.

David Orr, chief executive of the National Housing Federation, said: “The shortfall of homes can’t be met overnight – instead, we need an urgent effort from the government to meet this need, before it publishes its social housing green paper in the summer.

“The green paper will set out the government’s approach to tackling a number of key issues, like stigma of social housing tenants.

“However, it is clear that many of these stem from a chronic underinvestment in affordable housing.”

Terrie Alafat, chief executive of the Chartered Institute of Housing, added: “This report once again highlights the chronic housing shortage we face in the UK and it is clear that only a bold and ambitious plan to solve the housing crisis will prevent a decent, genuinely affordable home being out of reach for our children and their children.

“What the report also shows is that this isn’t just a numbers game and we have to make sure we build the right homes, in the right places and that people can afford them. For most people social rented housing is the only truly affordable option and the government must support the building of many more of these crucial homes.”

Source: Your Money

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Shropshire Council plans to build and sell houses in bid to plug financial hole

Shropshire Council is planning to build and sell houses to make money as part of its efforts to tackle a financial black hole.

The council is suggesting the measure as one way of dealing with its financial deficit and says that the purchase of Shrewsbury’s shopping centres will also provide an income of £2.7 million in the next financial year.

Other projects the authority hope will raise money include the redevelopment of Shirehall as a ‘public sector hub’, the development of health centres and community hubs, and buying and developing commercial property.

The council also wants to sell its services to external clients, and look at new services it could provide.

These include a new library services initiative called “Fab Reads”, charging for the time of building control team staff, and fees for tree preservation orders.

The proposals will be discussed at Thursday’s Audit Committee meeting.

The move to build and sell houses has been welcomed by the council’s Labour leader Alan Mosley, who described the plan as a “far better” investment than the shopping centres.

He said: “It’s good to see that they’re looking at investing in housing, particularly the rental section, which would be a far better investment than the shopping centres in terms of social value.”

But he criticised proposals to sell some of the council’s services as a risk.

“Shropshire Council is desperate to try and fill the massive black hole in its finances and seeking additional income for services is one way,” Councillor Mosley added.

“However, as has been acknowledged in the financial strategy, there are massive risks in relying on income to fund future service needs.

“This is no way in which councils should be financing the provision of vital and critical resources for residents.”

The council’s commercial strategy, approved by cabinet in March 2017, intends to invest in schemes and projects which can deliver £10m to £15m of new revenue income over a period of five to 10 years with returns of investment exceeding 10 per cent.

A spokeswoman for Shropshire Council said: “As government funding dwindles, choosing where to make savings is getting more and more difficult, especially as demand on the services we provide for our most vulnerable residents increases.

“Our financial strategy sets out a number of savings we propose to make over the next five years in order to balance our (revenue) budget.

“A key part of this is raising income.

“We are continuing to review all of the services we deliver (over 150, across the county) to explore whether they can sell their existing services to external clients and identify any new ones they can provide.”

Source: Shropshire Star

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House building helps UK construction output rise at fastest pace in five months

Demand for house building helped offset a drop in civil engineering and commercial construction activity.

The UK’s construction industry experienced a “moderate rebound” in November, as a pick-up in house building helped output grow at its fastest pace in five months.

The Markit/CIPS UK Construction purchasing managers’ index (PMI) showed a reading of 53.1 last month, up from 50.8 in October and easily beating economist forecasts for 51.0.

A reading above 50 indicates growth.

It was the highest reading in five months, with house building projects again emerging as the “primary growth engine” for industry activity.

The survey said participants chalked the growth up to “resilient demand” and a “supportive policy backdrop” for residential development.

It helped offset a drop in civil engineering activity and commercial construction, which was the weakest performing sub-sector in November as Brexit-related uncertainty and a subdued economic outlook weighed on client investment.

Duncan Brock, director of customer relationships at the Chartered Institute of Procurement & Supply (CIPS), said: “It appears that policy support and a small recovery in the UK economy has boosted sentiment and encouraged clients to come out of their shells and start building again.

“The housing sector was the primary driver of growth increasing at the fastest rate for almost half a year.

“However, it is private sector companies that need to commit to big-ticket spending, with commercial development still underperforming as persistent Brexit uncertainty continues to bite.”

He added that there was also concern that a drop in new contracts has dragged civil engineering works, with activity dropping for the third straight month and marking the longest period of decline for more than four years.

But some construction managers have expressed hopes that “forthcoming tender opportunities” linked to energy and transport infrastructure programmes will increase workloads.

Overall, companies pointed to a “moderate rebound in new orders” last month, thanks to a “general improvement” in client demand which had softened over the summer. In turn, it sparked a “moderate rise” in sector jobs growth.

Optimism among business picked up from October’s 58-month low, though the survey noted that confidence was still relatively subdued and was hovering near its lowest levels since mid-2013.

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said relatively low mortgage rates, the Government’s Help to Buy Scheme and other policy initiatives are likely to keep home building activity bouyant.

“Meanwhile, signs that the Brexit divorce terms will be agreed imminently, enabling future relationship talks to begin, might help corporate confidence to recover.

“But with the UK Government insisting — for now — that Britain eventually will leave the EU’s single market and customs union, firms likely will remain reluctant to commit to construction projects with long-time horizons.

“We expect the construction sector to bump along the bottom as long as a hard Brexit still is one of the options on the table.”

Source: Express & Star