Just 217,3502 more homes were created last year compared with 223,530 in 2007/8, housebuilding investment platform Homegrown warned today.
New build completions were up 12% in 2016/17 on the previous year to 183,570, still way off the 200,300 seen in 2007/8. Meanwhile, new homes from change of use rose 22% to 37,190, a figure that had already risen by 48% in 2015/16. There were 4,927 more office-to-residential conversions in 2016/17 (up 38.4% to 17,751) as well as 600 fewer demolitions (down 5.8% to 9,820).
Office-to-residential conversions have shot up in recent years after changes to ‘permitted development rights’ made it possible to avoid full planning applications.
The figures compare well to the aftermath of the financial crash but Homegrown warns that if the country cannot boost building sufficiently in the good times - when rewards for developers are high - then the country will never boost supply by enough to fix the housing crisis and make the dream of homeownership affordable for younger generations.
It was a decade ago this year that the sub-prime crisis took hold, causing the rate at which the country added new homes to tumble by 18% and 21% in 2008/9 and 2009/10 respectively, falling as low as 124,720 in 2012/13.
It wasn’t until 2013 that we started to see the rate of home creation grow with rises as high at 25% in 2014/15. Average house prices in England rose 22.9% between March 2008 and March 2017 to £231,801.
August 2007 is widely held to have marked the start of the financial crisis. August 9 2007 was the day that BNP Paribas froze three of its funds, suggesting it could not value the sub-prime loans contained in the complex financial instruments on its books.
Doomed Northern Rock chief Adam Applegarth later described it as “the day the world changed”.
Anthony Rushworth, founder of housebuilding investment platform, Homegrown, said: “One of the telling structural problems we see in England is that smaller developers struggle to raise the funds to build new homes even when house prices are in rude health.
We already have fewer smaller developers than we did a decade ago as many went out of business after the crash. In many areas where demand is high, land values are high and land is in short supply, these smaller developers are incredibly valuable.
We need to ensure, whatever comes down the line, that they are able to continue building, rather than periodically having to dance to the tune of relatively short-term ructions in the fortunes of house prices.”
