Government must do more to increase supply of new homes

The Government is being urged to pledge New Year's resolution to the housing industry after fresh data shows that there was a year-end drop in residential property building levels.

The National House Building Council (NHBC) wants the Government to keep housebuilding high on its agenda for 2012, after figures released by the organisation today reveal that the total number of new homes registered remained static in 2011 compared with 2010.

There was little relief for the housebuilding industry at the end of 2011, with the number of new homes registered with NHBC in the UK having reached 115,020 by the end of 2011, below the 115,458 new homes registered in 2010 figures.

In 2007, when house building was at a pre-recession high, this figure was almost double, with 200,700 new homes registered that year.

Following a relatively stable level of registrations through the first half of 2011, figures declined in the final quarter of 2011, to 21,152, down from 27,262 in Q4 2010. This will reduce the supply of new homes for anyone looking to find a property in the short to medium term.

Commenting on the year, NHBC Chief Executive Imtiaz Farookhi said: "While December is always a short month in which registrations inevitably dip, the last quarter of 2011 was particularly weak, with little sign of the cautious growth the industry experienced earlier in the year.

"Independent reports predict housing shortfalls over the coming years and a decline in the wider construction sector during 2012. Such figures are therefore a cause for concern and place even greater pressure on the successful delivery of the Government's Housing Strategy.

"There is general consensus that the combined efforts of the housing and mortgage industries could have a positive effect on sentiment and volumes, but it is important not to underestimate the factors holding back new homes construction. Smaller housebuilders in particular will continue to find the current situation difficult and will require increased access to finance. Our own figures show that the number of small builders working in housebuilding is lower than any time in the last 20 years.

"The question for 2012 therefore will be whether the Government's measures will be enough to actually achieve volume growth or only serve to stabilise the market. Either way, it is critical that housing remains high on the Government's agenda this year.

"Our figures do however indicate that there is regional variation in this picture and that, unsurprisingly, London experienced better growth other parts of the UK; but this may mean that the differences between London and the rest of the UK become more pronounced."