Last year we witnessed the start, completion, and progress of many developments countrywide. Government schemes were established to help regions improve in terms of transportation and housing and major regeneration programs got well underway. All of this had an effect on the new housing supply which has now reached its highest level in a decade.
The Rise Of New Housing
The government set a target of building 300,000 new properties per year, by the year 2020 and although it has significantly increased over the last ten years, we still haven’t quite reached that figure. In the last five years alone, the number of new housing has risen by 78% and as we progress through the year that per cent will continue to increase.
More Than A Decade With The Exception Of One
In 2018 and toward the end of 2017, around 222,190 properties was established with approximately 88% of those being new builds. A total of 13% of the 222,190 consisted of properties that experienced a change of use and property conversions created around 4,550 homes. The increase of property conversions and change of use properties is a result of the amended flexibility regarding development rights. This current increase is the highest in not just a decade but in 31 years with the exception of one. The governments 300,000 per year target is the estimated number that could meet the UK’s housing demand, and since we haven’t quite made it, demand is still very high.
Budgets And Funds
In a bid to help out with housing infrastructure the government increased the fund by £500m which resulted in a total of £5.5bn. A new scheme that’s being set up is designed to support lending by providing £1bn of guarantees. The Housing Revenue Account cap is due to be abolished meaning that local English authorities aren’t restricted to a lending amount for property building. On top of all that a budget of £653m has been set aside to help aide partnerships with multiple housing associations.
What Does All This Mean?
First- time buyers now have an advantage thanks to the rise in the number of new homes. Those who are looking to trade up in the property sector are also benefited by this increase. The supply and demand of property have been somewhat conflicting in recent years, but it is because of this that house price growth has continued. As we advance toward an even higher housing supply the property market influxes are expected to balance out. House price gains have the potential to transform into earnings growth, and the overall affordability should be a lot less strained.
The UK housing supply is definitely heading in the right direction though there is still a lot of improvement to be made in order to meet the government’s target by 2020. Property demand remains high especially in the cities that have seen the significant redevelopments and regeneration projects. Now that we have entered the new year it will be interesting to see the progress throughout 2019 and whether or not the housing supply can be increased yet again.