21st Nov 2013 14:05
LONDON (Alliance News) - UK housebuilding activity increased at its fastest rate since the financial crisis in the third quarter, boosted in part by the governments mortgage financing scheme, Help to Buy, latest data showed Thursday.
There were 32,230 new homes started by housebuilders in July, August and September this year, up from 29,880 homes the previous quarter, the Department for Communities Local Government said, while housing completions increased 5% to 28,850 from 27,380.
Over the last 12 months housing starts increased 16% to 117,110 from 101,280, the department said.
UK housebuilders were hit hard by the financial crisis, and all but ceased building new homes for a time as they focused on paying down debt and stemming losses. However, the figures show confidence is returning to the house building industry aided by the launch of the Help to Buy Equity Loan scheme.
The first phase of the Help to Buy scheme in England started in April, when buyers of newly built homes were eligible for a 20% equity loan from the government on top of their 5% deposit.
The biggest constraint on supply since 2008 has been people?s inability to buy. However, since the scheme was launched around 2,500 new home reservations a month, mainly from first-time buyers, have been made enabling builders to ramp up production on site.
Over 900 housebuilders have signed up to Help to Buy, while listed firms have seen there shares perform well with more homes coming onto the market and rising prices.
?The Equity Loan element of Help to Buy is already having a meaningful impact on the housing market, by addressing the issues of restricted mortgage availability and large deposits that were preventing many potential homeowners from buying a home of their own, Persimmon PLC Chief Executive Jeff Fairburn said.
?To increase volume to meet this increased demand, we are stepping up our investment in land and construction, opening 85 new sites before the end of the year and developing on all sites where we have implementable planning consents, creating many new jobs in the process,? he added.
Rival housebuilder, Barratt Developments PLC, said customer interest in the scheme is very strong.
?If we can sell homes more quickly we can build more quickly and we are rapidly increasing production, Chief Executive Mark Clare said.
?We now have the confidence to target the construction of 45,000 homes over the next three years and we are investing in land and bringing it through planning to meet increased demand.?
The highest number of Help to Buy sales were in Leeds, Wiltshire, Milton Keynes and Reading, while some of the biggest increases in housebuilding were in Hammersmith and Fulham in London, Southampton, Cambridge and East Devon.
Despite the figures, the Royal Institute of Charted Surveyors (RICS) lamented the lack of homes to meet supply.
?There remains a strong case for further innovative measures to be introduced to deliver more homes, covering not just the private sector but also the affordable segment where new starts actually fell between the second and third quarters,? RICS Chief Economist, Simon Rubinsohn, said in a statement.
The figures follow research earlier this week which showed that the number of new mortgages is now at its highest level since 2008.
Gross mortgage lending in the UK rose to GBP17.2 billion in October, the Council of Mortgage Lenders said, up 37% than the GBP12.9 billion lent in October 2012.
By Anthony Tshibangu; [email protected]; @AnthonyAllNews
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