18 June 2016 – by Alexander Peace
Housebuilders are divided over whether supply can be increased, according to Knight Frank’s Housebuilding Report.
It found that 44% of respondents expected housing completions to remain flat or decline over the next 12 months, with 41% expecting starts to slide too. Despite government incentives, housebuilders identified labour costs and planning issues as the key constraints.
Just over 152,000 new homes were built in 2014/15, which Knight Frank predicts to rise to 172,000 in 2015/16. This is well below government targets of around 200,000 new homes each year.
David Fenton, Knight Frank’s head of regional land, said: “The only dark cloud is build cost inflation and labour shortage, both of which are hampering delivery. However, Help To Buy continues to have a positive effect on sales rates.” Fenton said sentiment among housebuilders was still positive, though many were becoming more selective in land acquisition.
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Almost three-quarters of housebuilders said the cost and availability of labour would have a negative effect on building. Other hurdles included public land and planning.
Increased resources for planning teams and access to public sector land were the top priorities to help increase building totals.
