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Not Enough New Homes Being Built

Written By On 22/08/2013

Recent figures suggest that the property market is now coming out of the doldrums and beginning to kick start Britain's economy. Much of this is being credited to government schemes, namely the Funding for Lending system and the Help to Buy scheme. This has helped to acquire mortgages and loans easier for most people in the UK.

The first phase of the Help to Buy scheme was set up earlier in the year and it's aim was to help people buy new build properties valued up to £600,000. This will help purchasers including first time buyers be able to afford to buy with only a five per cent deposit.

The second phase will be launched in January 2014 to cover all homes and not just newly built.

But this has caused new problems and more controversy. Glenigan, the construction analysis company were asked to conduct a study for the Local Government Association. The reason was to find out how many new properties across England have planning permission to be built, but have not yet started building.

They report that the amount of homes that await being started on is approaching nearly four hundred thousand. The LGA believe that this is causing a further shortage for home buyers which will snowball into a property price bubble. They say this is due to local councils being given restrictions by the government on how much they are able to spend.

They are calling for the government to help the funding of newly built homes by having less stringent criteria instead of adding extra red tape for the councils to cut through. Councils say there are loads of sites that are 'shovel ready' but remain stagnant because of the issue.

However Mark Prisk, the Housing Minister disagrees and calls the data 'misleading'. He says

The current figures show 496,000 sites have got planning permission, just 60,000, so about twelve to thirteen per cent are actually stalled.

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