Annual UK housing completions in the 12 months to June 2015 were up 15% to 131,060. To keep up with demand the industry should be building 220,000 dwellings per year
The UK housing market slowed down in the early part of 2015 but has recovered since the general election in May 2015. House prices in the South East, where the Group predominantly operates have increased by 6.7% in the year to July 2015 according to the Office for National Statistics. This is in contrast to the 11.6% increase in the previous year.
The rapid growth that we have seen is widely attributed to the Government's 'Help to Buy' Scheme, which has enabled 120,000 households, most of them first time buyers, get onto the property ladder who had been unable to do so since the credit crunch. This sudden increase in demand pushed the prices up but these levels of price increases could only ever be temporary and we have now seen them normalise. With the fundamental undersupply of homes, prices will inevitably continue to rise, especially when expectations in interest rate increases in the near future have softened. Recent research by the housing charity Shelter has shown that in the two and a half years since its launch 3% has been added to the average cost of a UK home as a direct result of the scheme. The scheme has now been extended to 2020, bringing some certainty back into the sector. This year, 31% of the homes sold by Inland used this scheme and this shows that certain types of purchaser are still very reliant on the Government's help to obtain a deposit.
The Council of Mortgage Lenders have forecast an 8% increase in lending during 2015 and mortgage rates are still at historic lows.
Annual UK housing completions in the 12 months to June 2015 were up 15% compared to the previous year at 131,060 but the housing starts during the same period were down by 1%. To keep up with demand we should be building 220,000 dwellings per annum.
With such a shortage of homes, increases in mortgage availability and an expected increase in employment growth we expect house prices to continue to rise in our operating area, albeit at a slower rate than that experienced over the last two years.
The new Government is putting housing at the forefront of their list of priorities and Inland has been involved in the consultation process on Starter Homes, even receiving Prime Minister David Cameron on a site visit to our Carter's Quay development in Poole, Dorset.
Level of housing starts and completions and quarterly new housing output
Source: Office for National Statistics