Simon Rubinsohn, RICS chief economist, has commented on the latest government housebuilding figures.
“The increase in activity in the newbuild sector mirrors the stronger tone seen in the latest RICS residential market survey,” Mr Rubinsohn said. “However, in addition to benefiting from the impact of the Funding for Lending Scheme, developers have also been able to take advantage of various other government initiatives including First Buy and NewBuy. This has been reflected in the sharper rise in private sector starts. By way of contrast, the picture amongst both Housing Associations and local authorities is altogether flatter.
“Government has extended its support for the newbuild sector through the introduction of Help to Buy. By opening up the shared equity product to a greater range of purchasers, the intention is to stimulate a greater level of development. While RICS expects this to be reflected in a higher level of newbuild over the balance of this year, there remains a question mark as to how much additional activity will be stimulated specifically by this programme. RICS expects housing starts to climb to around 115,000 this year, which compares with fewer than 100,000 in 2012. This will, nevertheless, still leave the level of housebuilding way short of projected household formation and suggests that rather more will need to be done to address this key challenge for the country.”
