The number of homes built in Britain last year was the highest since the start of the economic downturn in 2007, proving that it is not just the flowers that are starting to blossom. John Elliott, Managing Director of Millwood Designer Homes, tells us why the new homes boom is helping to build the recovery.
“We continue to see signs of confidence in the market and this is translating into solid figures. More than 133,600 homes were built in 2013 – that’s a 28% increase from 2012, which is not bad going for just one year.
“It also looks unlikely that we will see a rise in interest rates during 2014 and, probably, the first half of 2015 as well, which means it is a great time to secure that mortgage and get your foot on the housing ladder.
“Around 13,000 homes have so far been bought under the Help to Buy equity loan scheme, and arguably this is contributing to the continuing rise in construction projects.
“It is crucial that the government keeps the momentum going, reducing planning and regulatory costs while securing stability on the demand side. It would be good to see the supply of homes start to balance out with demand but we are still a long way off from that, as an estimated 250,000 homes are needed to be built each year to meet demand.
“Housebuilding is vital to our recovery as a nation since construction is one of the best ways to stimulate economic activity. It’s a massive home-grown British industry and, unlike many other sectors, there is only a minimal requirement for imports in all construction-related industries. Home building and construction imports less than 8% of its supply, much less than in many other commercial activities maximising benefit for the UK.
“The latest report from the Office for National Statistics revealed that housebuilders were responsible for pushing output across the construction sector up 2% in December last year, which bodes well for the year ahead.
“The housebuilding industry is responsible for around 6.3% of the UK’s GDP and is incredibly important for employment and industry up and down the country, creating hundreds of thousands of jobs. Every new home built provides 1.5 direct full-time jobs, plus up to four times that many in the supply chain. It also provides vital apprenticeships for those entering the jobs market.
“The construction, sale and servicing of a new home also provides up to six full-time jobs indirectly in the supply chain, the professions and in sectors linked to the property market such as the furniture and white goods industries.
“For all those out there who are worried about the housing bubble, be reassured. There’s a lot of evidence to show that it is not going to burst. The banks and lenders are all focused on getting the market moving and we are seeing the positive effects of that. Interest rates remain low, lending is easing, there has never been a better time to buy.
“One thing we can all agree is that the UK needs more homes – and that’s what housebuilders like us will continue to do.”