New research has suggested that the restricted supply of new properties being built, along with an increase in residential property demand, will create a rise in rents and property prices during the next few years.
The number of new build properties which have begun to be built has risen over the last year, but it still appears that the government will fail its goal of building 300,000 new homes each year. The failure of the measure, deemed a necessity by 2020, will lead to upward pressure on rents and house prices.
McBains, a design and consulting agency, conducted a survey which questioned over 400 house building companies. It found that over half of all developers, at 57 per cent, had increased the rate at which they built new properties during the past year, and these developers also predict a rise in the next 12 months. However, they are not close to developing the level of new properties which are required to meet growing demand.
Overall, house builders claimed that they had build 201 homes each, on average, during the past year. This is expected to rise to approximately 297 homes in the next year.
However, the survey respondents cited concerns around skills shortages, slow planning permission and land availability as barriers which prevented them from building more properties. Almost half, at 48 per cent, identified these as factors which are making it harder for the government to successfully meet its targets.
Of the new properties which will be built during the next year, house builders predict that one in five, at 22 per cent, will be classified as new affordable homes for sale or rent.
McBains’ managing director, Clive Docwra, commented that the fact that the survey highlighted that house builders are increasing the pace at which homes are being built was positive news.
However, with issues such as a lack of suitable land halting construction, the majority of house builders are sceptical of the government’s targets for house building.
The construction industry, in particular, relies on skilled workers from the EU, due to the shortage of skills within the domestic workforce. These workers could potentially be prevented from working within Britain after the transition period of Brexit ends in 2021, and many house building firms will struggle to source the workforce urgently needed to build new homes to meet demand.
Many will have no choice but to rent privately, as first time buyers continue to struggle, with the added disappointment that only one in five new homes being built during the next year will be affordable.
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