Osborne says home building is up – but we’re well behind where we need to be
Chancellor George Osborne says homebuilding is up – but avoided dropping the relevant numbers, when challenged at a business conference today.
Challenged at the Institute of Directors conference on the coalition's progress in implementing supply-side reform of the construction industry, Osborne said that "housebuilding is up and planning applications are up".
The statistics are however, dire. Our housing needs are escalating – we need to build 290,500 homes per year according to government estimates:
The National Housing and Planning Advice Unit (a non-departmental public body) has said that the recession has increased the requirement for house building (e.g. to make up for the fall off in construction rates). It has advised that up to 290,500 additional homes may be needed in each year to 2031, although this requirement is not uniform across the regions.
Yet the latest data shows construction at just 111,300 houses built per year for the last three years:
New housing supply at its highest level since 2008, with a total 334,000 new homes built in England over the past 3 years.
(Department for Communities and Local Government)
It's not surprising that Osborne only skirted over the supply-side issues – he preferred to focus on the demand side. But the Funding for Lending Scheme and Help to Buy are only creating bottlenecks. All that demand has nowhere to go, as tight planning rules prevent new and necessary building.
What we're seeing is rising house prices, and limited addition to new stock. Exactly what those who want to get on the housing market wish to avoid. To tackle the housing crisis Osborne will need to tackle supply.