200,000 New Homes a Year is an 'Unachievable' - Survey

Only six per cent of housebuilders believe that the key target of 200,000 homes to be built every year is deliverable, according to Knight Frank's Housebuilding Report 'Building Momentum'

The survey also flags the sector's reliance on the Help to Buy scheme as it continues to support housebuilding figures. The extension of the scheme will lift development volumes between now and 2020, more than 75 per cent of respondents say, while more than 40 per cent believe that it will increase the size of schemes undertaken.

The majority of housebuilders believe that construction of new homes is expected to rise over the next year by more than 10 per cent, with more than a quarter expecting an uplift of more than 25 per cent in start volumes.

Grainne Gilmore, Head of UK Research at Knight Frank, said: "The question of whether it is feasible for housebuilders to plug the housing hole left by the relative lack of government investment remains a primary concern.


"There is no doubt that developers have stepped up activity since the zenith of the financial crisis - official data shows completions in England rose 4.5% over the last year. But this still leaves development some way off the levels needed to meet demand across the UK.

"Our survey suggests however, that development volumes will continue to rise, it is just a question of whether it is going to be enough to meet that 200,000 target. Looking further forward, more than seven in ten respondents expect the number of housing starts by their business to rise over the next 12 months, and nearly half of respondents expect an uplift in housing completions of up to 25 per cent."

The broader recovery in the UK is now reflected in the fact that there is an expectation of a country-wide uplift in activity over the next 12 months. The Knight Frank survey shows housebuilders and developers active in Wales, Scotland and the North East expecting some of the biggest rises, albeit from a low base. The number of planning permissions for residential units rose most strongly in the Midlands last year.

However, the majority of housebuilders believe that 200,000 new homes a year is unachievable; 30 per cent saying that 180,000 is the maximum and only 6 per cent saying that exceeding 200,000 on a regular annual basis was achievable.

(CD)