House-Building Levels Continue to Increase

A new report shows that levels of house-building are continuing to grow and that they are now at their highest point since 2007. It also highlights that this growth is now spreading across the country and is not just confined to the capital.

The figures released by the National House Building Council (NHBC) show that 107,017 new homes were registered from January to September this year. This accounts for about 80% of the total market, including all the major house-building companies. This is an increase of 6% on last year’s figures and is the highest that has been recorded since shortly before the financial crisis started.

The levels for the year to date have been bolstered by a particularly strong third quarter. For the period from July to September, there were 36,343 registrations, which is an increase of 8% on last year’s quarter-three figures.

Growth Is Spreading

When the house-building industry first showed signs of recovery, it was mainly centred on London and the South East. However, these latest figures show that the increase in new home registrations, including properties with metal stairs, is no longer solely based in these areas. In fact, the growth in these regions is starting to slow down and in some parts has actually declined. The regions that are recording the strongest growth levels include Yorkshire and the Humber, the West Midlands and the North East.

For the period from July to September, the West Midlands had an increase of 51% on 2013 figures, and both Yorkshire and the Humber and the North East increased their levels by 32%. At the same time, figures for the London region increased by only 6%, and in the South East they were down by 15%. This is due to more home buyers considering other areas where property is more affordable and they are able to buy larger properties, with perhaps some outdoor space or metal stairs.

Problems Faced by the Industry

This might be a positive time for the house-building industry, but there are still some major issues for them to overcome.

The NHBC also spoke with some of the smaller businesses to see what problems they faced in today’s economic climate. One of the major considerations they had was the lack of affordable financing opportunities. 22% of them found that obtaining adequate finance for their projects was an issue. Banks are not always keen to lend money to the smaller firms, which makes it hard for them to grow and raise the money to start new developments.

One of the other problems facing the industry is the skills shortage that is affecting some areas. This is especially acute amongst carpenters, decorators and brick layers and could lead to issues for developers who are looking to move ahead with their projects.

There are other concerns that could impact on the housing industry over the coming months, including a rise in interest rates. We will have to wait and see if this period of growth can be sustained over a longer time frame.