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England housing stock increases but housebuilders still fall short of target

The number of new homes completed in England in the last year reached its highest level in a decade, but growth has plummeted as Brexit uncertainties take hold.

Just over 222,000 more homes were added to England’s housing stock in 2017-2018, according to figures released today by the minister of housing, communities and local government (MHCLG).

But the increase represents growth of only two per cent on last year, reflecting the tough market for housebuilders amid rising building costs and Brexit uncertainty.

In 2017 growth from the previous year was 15 per cent.

The figures fall short of the government’s plans to build 300,000 new homes a year, which it outlined in its 2017 budget in a bid to tackle the country’s housing crisis.

Blane Perrotton, managing director of chartered surveyors Naismiths, said: “You don’t need to follow every tortuous twist and resignation of the Brexit saga to identify the culprit for the slowdown.

“Fragile demand and a lack of developer confidence since the 2016 vote have both slammed on the brakes, even here in the engine room of the construction industry.”

The report comes as housebuilders bear the brunt of numerous resignations after Theresa May unveiled her draft Brexit deal. Shares in Barratt Developments and Persimmon have fallen over seven and eight per cent respectively since the cabinet agreed on a draft deal last night.

But the Home Builders Federation (HBF) has welcomed the report, saying progress was being made in the industry’s efforts to address the housing shortage.

HBF executive chairman Stewart Baseley said: “Today’s numbers are yet another sign that the home building industry is delivering the increases in housing supply the country needs.

“Whilst the second-hand market remains sluggish amidst wider economic uncertainty, with Help to Buy enabling first-time buyers to purchase new build homes, builders have continued to invest and increase output.”

“Whilst huge progress is being made, government needs to continue to work with all parts of the housing sector to assist them to deliver further increases if we are to hit their 300,000 target,” he added.

Communities secretary James Brokenshire said: “Today’s figures are great news and show another yearly increase in the number of new homes delivered, but we are determined to do more to keep us on track to deliver the homes communities need.”

Source: City A.M.

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Value of UK’s housing stock soars past £6tn

The total value of all the houses in the UK has passed the £6tn mark for the first time, according to research by Halifax which also highlights the vast concentration of property wealth in London and the south-east.

The value of homes in London is now more than all the houses in Scotland, Wales and the north of England combined. The research also reveals how property values in the south have escalated since the financial crash of 2007-08, despite incomes remaining relatively flat.

In 2007 Halifax estimated that the UK’s housing stock was worth a total of £4,077bn, but over the past 10 years the figure has risen to £6,015bn.

To put the £6tn figure into context, it is nearly four times the size of the UK’s national debt, which is currently just over £1.8tn, and three times our total national output in 2016 (around £2tn). But even if every house in Britain was sold, the money raised would pay off less than half of the US’s national debt.

The big rises in the value of the UK’s housing stock have mostly taken place in the south. In 2007, the value of housing in the north-east was estimated at £114bn, but today it stands at £136bn – an increase of £22bn.

But in London, houses have jumped in value from £718bn in 2007 to £1,338bn today, a gain of £620bn. Over the same period the value of properties in Northern Ireland actually fell.

In total, 68% of private property wealth, amounting to £3.8tn, is concentrated in the south, up from 62% in 2007.

The stock of privately owned homes in Britain also increased in number from 21.5m to 23.4m.

Among the biggest gainers of property wealth in the south have been landlords and second home owners. Halifax said that while the average rate of owner-occupation in the UK was 63%, it stands at just 48% in London.

The vast majority of housing wealth is owned by the over-55s. Halifax estimated that under 35-year-olds own just 3.3% of the UK’s net property wealth, while the over-55s hold 63.3%.

Russell Galley, managing director at Halifax, said: “The value of housing stock has grown by close to £2tn in the past decade, and with the equity rich regions of London and the south-east largely responsible, it highlights a considerable regional imbalance in the distribution of housing wealth.

“Within the capital there is also a mix of fortunes. While more than a fifth of total property wealth is in London, lower levels of owner-occupation reflect a major barrier to the property ladder with a far greater number of people renting where house prices are at their highest.”

The property market has bestowed much higher levels of housing equity – the difference between the value of a home and the outstanding mortgage – on people living in the south. Halifax estimated that the average homeowner in London has net equity worth £360,193, compared to £134,273 in the north-west of England.

How housing stock values have changed – 2007-2017

North-east £114bn to £136bn

North-west £355bn to £469bn

Yorkshire and the Humber £262bn to £341bn

East Midlands £244bn to £327bn

West Midlands £294bn to £361bn

East £421bn to £688bn

London £718bn to £1,270bn

South-east £732bn to £1,089bn

South-west £401bn to £554bn

Scotland £257bn to £349bn

Wales £161bn to £183bn

Northern Ireland £121bn to £92bn

UK as a whole £4,077bn to £6015bn

Source: The Guardian