Number of new homes built in 2014 up just 8 per cent to 118,760

The latest figures released by the Department for Communities and Local Government report the 137,000 new homes were started in 2014 – a 10% increase on the previous 12 months. The total of just 118,760 new homes completed in the 12 months to 31 December 2014 was up by 8% on 2013.

House prices Table

If ever there was proof that house builders are hoarding land and restricting supply this is it. Nearly every major plc house builder now has around five or six years’ supply of building land. Despite this their lobbyists the Home Builders Federation (HBF) are still bleating on about the planning system.

Stewart Baseley, executive chairman at the Home Builders Federation claimed that more than 100,000 extra people were now employed in house-building, providing a boost to the economy. Yet the HBF is demanding further incentives to encourage more development.
He said, “We are still way short of building the number of new homes the country needs, and that despite the government’s Help to Buy scheme, it was still too difficult for developers to get planning permission.”

Not entirely clear how these “extra 100,000 people” building new homes only resulted in just 9,190 more new homes being built last year. Unsurprisingly, the DCLG said the biggest rise in building was mainly areas in the south of England. This is where the highest prices can be achieved and it is no wonder house builders are concentrating their efforts in this region.

It is clear that house builders are hoarding land and limiting supply of new homes to maximise their profits. Indeed, recent financial reports show that all the main house builders are making record breaking profits and have had year on year increases in their operating profits too. If this were any other industry, for example oil, the government would have levied a windfall tax. But the housebuilding industry is favoured like no other industry. Despite government incentives and relaxation of regulations and planning rules, this industry is still refusing to build the number of homes the nation needs, putting profiteering ahead of building decent, reasonably priced, quality new homes for people to live in. There are reasons why house builders will never build enough new homes unless they are forced to.

As the industry clearly refuses to act responsibly it is time the government did something about it. One answer to get house builders to build more homes would be to put a five-year limit on building after planning is granted. Any land that has not been built on five years after granted planning permission should be confiscated and given to local authorities to build council houses for working people. These would be affordable as the land cost (around 25% of the cost of a privately sold new home) would be zero.

The government should also take away the Help to Buy provision from any house builder that is not improving the quality of their home they build each year or fully complying the their own Consumer Code for Home Builders. This could be monitored via buyer complaints to an independent Ombudsman for new homes and the CCHB Adjudication Scheme. The Ombudsman could also administer the Customer satisfaction surveys ensuring that every new home built receives the survey and that the results are completely independent of the house building industry.

Campbell Robb, chief executive of the housing charity Shelter, said it was shocking how few homes were being built. “What’s even more worrying is that the number of new affordable homes started has fallen dramatically in the last three months,” he said.

“Piecemeal schemes like Help-to-buy are only papering over the cracks. With the general election around the corner and housing one of voters’ top concerns, it’s time for politicians to stop just talking about the issue and finally commit to building the affordable homes we so desperately need.”

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