New house-building statistics released by the Department for Communities and Local Government (DCLG) show that the rate of UK house-building has risen significantly for the last five quarters in a row (since April 2013).
This supports research by Deloitte that UK house-building is recovering faster than its European neighbours. The number of new homes starting construction in 2013 increased from 2012 in only three European Union (EU) countries - the UK was the highest (up 23.4%), followed by Belgium and Germany (12% and 7.2% respectively).
The Overview of European Residential Markets report shows that overall residential development across the EU declined over the last three years, with the number of completed homes falling from a rate of 3.9 per 1,000 citizens in 2011 to only 2.5 in 2013. The rate for new homes completed in the UK in 2013 was 18% below the EU average.
James Pargeter, head of residential projects at Deloitte Real Estate, said: "The UK is one of the very few EU countries in which housing construction new starts - per 1,000 people - actually increased from 2012 to 2013, and by nearly a quarter.
"Whilst we still need to build far more housing here in the UK, this increasing trend in construction is a positive sign that we are at least moving in the right direction. This is being maintained into 2014, with latest statistics showing annual housing construction starts are up by another 22% in the 12 months to June 2014. We expect this ongoing performance to continue to compare well to the rest of the EU in 2014.
“On the whole, Europe’s residential sector is still recovering from the slump that followed the financial crisis in 2008, which resulted in historically low construction levels. Many countries continue to develop housing at below the European average, including the UK, but it is worth noting that France and Austria, even in continued decline with regard to housing starts, are completing around twice as many homes per 1,000 people.”
More homes are being built thanks to the government’s action to help homebuyers and fix the broken housing market, Housing and Planning Minister Brandon Lewis said.
The latest statistics show 36,230 new housing starts in England between April and June, an increase of 18% on the same quarter last year.
It brings the total number of starts over the last 12 months to 137,780, a 22% increase on the previous year and the highest level of house building since 2007.
Mr Lewis said the new figures are further evidence that the government’s long-term economic plan to improve the housing market is working.
Almost 40,000 households have bought a home through Help to Buy, with over 80% of sales going to first time buyers purchasing new build homes. The direct result is a new generation of homeowners and a 34% increase in private house building during the first year of the scheme.
At the same time the construction sector has been growing for 15 consecutive months, and is currently experiencing the sharpest rise in house building orders since 2003, while companies are taking on new workers at the fastest rate since 1997.
A growing pipeline of new projects is also emerging from the reformed planning system. Last year successful applications for major housing schemes were up 23%, and planning permissions were granted for 216,000 new homes.
Mr Lewis said the latest figures for Right to Buy sales, published today, show hard-working tenants are also benefiting from government assistance.
Between April and June 2,845 council owned properties were sold, a 31% increase on the same quarter last year, and bringing the overall number of homes sold under the reinvigorated Right to Buy to nearly 22,500.
Receipts from additional sales are now being recycled into building new affordable homes. In the last quarter councils received £211 million, and started work on 675 new homes, bringing the total number of replacement homes started to almost 3,700.
More than 480,000 new homes have now been delivered since July 2010, including almost 200,000 affordable homes.
Brandon Lewis said: "Wherever you look across the housing market, the signs of progress are clear. House building in England is up by over a fifth compared to last year, orders for building materials are rising at the quickest pace for 11 years, and companies are hiring new staff at the fastest rate since 1997. Hardworking tenants are also voting with their feet and taking up the Right to Buy.
"This progress did not happen by accident. It bears testament to our efforts to reform the planning system and help homebuyers while paving the way for house builders to boost their output. But there’s still more to do, and improving the housing market will remain a vital part of our long-term economic plan."
