Government data released recently shows new homes built during 2010 dropped by 13% over previous year to 102,570 units only.
This is the lowest output since 1923, when 86,000 new homes were built, pointed out the Home Builder’s Federation (HBF).
It is estimated that 232,000 new homes need to be built every year till 2030 to meet the demand and last year’s figure is less than half of the projected numbers, HBF said.
In the last three months of 2010, number of dwelling units completed dropped by 16% over the same period a year earlier to 23, 190. The number is a drop of 13% over the third quarter in 2010, revealed the Department of Communities and Local Government.
However, during the third quarter, new homes completed had grown by 1% over previous three months.
To tide over the situation, the government had announced the new home bonus scheme, which encourages local authorities to build more homes as proposed in a revamped planning system.
HBF complained that despite the governments best intentions, planning approvals went down substantially for the year due to a ‘policy vacuum’, when the new planning system implementation got delayed as the coalition government assumed office.
To arrest the crisis from deepening further, HBF said urgent action was required driven by the new Homes Bonus scheme.
“The problem is that we have a planning system in the midst of radical change, expensive and unnecessary red tape and a shortage of mortgage availability”, rued HBF.
“If we are going to weather this perfect storm, tackle the housing shortage and produce growth across the country, we need early action to resolve and simplify planning, reduce regulation and encourage lenders to lend again”, it recommended.