New Build Home Numbers Could Drop Below 100,000 Next Year, Warns RICS

The Government's housing target of building two million new homes by 2016 is looking further out of reach with the downturn in the construction industry sending growth in private housing workloads to a record low, according to the Royal Institute of Chartered Surveyors (RICS) UK Construction Market Survey.

Following significant declines over the past two quarters, private housing sector workloads plummeted yet again, with 60% more Surveyors reporting a fall than a rise.

The Government needs to build in excess of 200,000 new homes each year in order to reach their target of 2 million homes by 2016. To date, only 66,220 new homes have been built in 2008, with a fall below 25,000 per quarter likely by the end of the year.


RICS Senior Economist Oliver Gilmartin said: "With finance for projects becoming increasingly difficult to obtain, the Government's ambitious target of 2 million new houses a year by 2016 is likely to fall well short. At current levels of production the number of new homes built will fall below 100,000 in the coming year."

Overall construction workloads declined at their fastest pace in the survey's 14 year history with 38% more Chartered Surveyors reporting a fall than a rise. Adding to this gloom, 41% more Chartered Surveyors expect workloads to fall rather than rise over the coming twelve months as financial constraints continue to bite.

Mr Gilmartin continued: "The outlook for the construction industry is extremely bleak with the previously strong infrastructure sector now unlikely to step in as the downturn in property markets resonates. A rapid solution to the log jam in credit markets is necessary to limit the severity of the current downturn which is starting to affect the country's infrastructure."

(CD/JM)