Million more homes needed to stop next boom

Tuesday, 29 September 2009 08:34

The housing shortfall is set to hit one million homes in 2010.

The collapse of the housing market and construction industry has led to production of new homes to reach an 80-year low, according to new report, and the gap between housing demand and housing supply in England is widening.

The number of new completions is set to be below 100,000 this year.

A study by the Smith Institute and PricewaterhouseCoopers warns the gap between housing supply and demand is now in 2009 is 150,000 homes.

David Pretty, co-author of the report, more investment in housing was "needed to avoid a return to a cycle of housing boom and bust."

"If we ignore this problem and reduce public intervention and investment in new supply of both private and affordable housing, there could be serious social and economic consequences, not least record housing waiting lists and more pain for beleaguered first-time buyers."

Gideon Amos, chief executive of the Town and Country Planning Association, added: "In short we need quantity and quality. If we don't the housing supply crisis, already urgent, will get worse.

"The alternative of allowing housing provision to sink to a new all time low could be storing up even more difficult problems ahead."

The report finds at least 250,000 new homes a year are needed to match annual population growth.

Part of the reason for the housing boom and the rocketing of house prices - besides an easing of credit conditions - was the undersupply.

The report cautions that this undersupply of property remains - although the mortgage famine and grinding to a halt of sales masks this.

The authors warn some analysis points to property prices taking some five years to climb back from the slump, but the construction industry could take seven years to reach its former level of output of new homes.

It also calls on the government to maintain public investment in both private and affordable housing, more action to boost mortgage availability and more land release for building.

• Tags:
• news
,
• property
,
• property development