LONDON Jan 31 New-home building in Britain last
year hit its highest level since the financial crisis but
remains far too low to meet a strong recovery in demand, an
industry report showed on Friday.
New home registrations in the UK increased by 28 percent in
2013 to 133,670, the highest number since 2007, according to
data from the National House Building Council. Falling
unemployment, low interest rates and government programmes have
helped spur a housing recovery.
But a mismatch between demand for homes and the number of
properties coming on the market has pushed up house valuations
and priced some people out of the property market, despite
government programs to get them on the housing ladder.
"Over the year, we have seen a genuine return of confidence
to the industry as builders strive to meet the growing demand
for new homes that the United Kingdom clearly needs," NHBC Chief
Executive Mike Quinton said.
"As we have stressed throughout the recent upturn, this
recovery has been from a historically low base. The UK still has
a chronic shortage of new homes."
Brian Hilliard, the chief UK economist at Societe Generale
said concern about supply was likely to persist for a while.
"Just because construction is responding to this increase in
demand, it's only a very partial response and it's got a long
long way to go," he said.
A government-backed review of the housing market in 2004
estimated that Britain needed to build 250,000 homes a year.
The government began its 'Help to Buy' programme last year,
originally to encourage the purchase of new properties. It then
expanded the scheme to provide state guarantees for low-deposit
Concern about the strength of the housing market prompted
the Bank of England and the government to say in November that
it would stop encouraging banks to lend to home buyers under the
separate Funding for Lending Scheme.
"There are some inherent contradictions in the overall
policy stance looking at both the Treasury and the Bank of
England together," Societe Generale's Hilliard said.
The NHBC said most UK regions saw registrations of new homes
rise in 2013 but London stood out, in keeping with other
surveys. The number of new homes registered in the capital last
year jumped 60 percent to 26,230 from 2012, reaching its highest
since electronic records began over 26 years ago.