Published on 4 Oct 2013

2012/13: lowest year for official UK housebuilding since the 1920s

135,117.

A vital number for any politician claiming to care about living standards (all of them). For young people. For those impacted by high house prices.

Prime Minster David Cameron Visits A Land Securities Construction Site

In the last full financial year, 2012/13, for UK housebuilding 135,117 new homes were completed. This is the lowest number on record, ie post war.

It is lower than the low numbers you could plausibly blame on Labour after the crisis (though the lows in housing starts, not completions, are still for post-crisis Labour, despite Gordon Brown’s promises for 300,000 a year).

Completions are the end point of all the myriad of government policies, economic conditions, planning, banking stability and the weather. Still, given all that, it is fairly extraordinary that the coalition has managed to hit this unwanted modern record (the most recent low, which could plausibly be pinned near Labour in 2010/11 was 137,400).

faisal_table

Strip out Northern Ireland and you can begin to project back further into history, as the great Brian Mitchell has printed figures for housebuilding in his Cambridge Economic History of Britain.

At 128k for Great Britain in 12/13. It appears that it was only lower from 1940-45, 1907-1923, 1905, & then before 1896. (Except 1876 at 130k was higher).

Now it is true that there are now some signs of less bad developments in housebuilding, and the Treasury will point to its initiatives from Funding for Lending to the Help to Buy scheme.

But take the proclamations we are getting from the government about high rates of growth in housebuilding with a hefty pinch of salt. Housebuilding completions are starting from modern record lows, the rates of growth are bound to be high. The levels, however, show that something went wrong in 12/13 (and it is partly the weather).

Turning the corner means going from abysmal to terrible, if you think rising household formation needs more houses.

Next time you hear a minister or a politician talking cost of living, think about this 135,117 number.

5 reader comments

  1. Philip says:

    It’s just not a priority. The Government gave way to nimbyism with its Localism Act, which stops or delays housebuilding. As you’ve noted, at the top end flats are sold to overseas bidders before UK nationals even get a chance to buy. And Osborne is obsessed with HSR2, which won’t come for years. So we have an economic policy – the right to buy scheme – which will increase the available money, but without an accompanying increase in supply. Result – increase in house prices. And since the right to buy scheme doesn’t keep out investors buying to let, it also reduces the accommodation available for people who want to buy their own homes. Increased house prices tends to increase rents which affects the benefit cap on tenants whose rents go up, because the Government has decided not to control rents in any way. This is incoherent government of the first order. It meets the needs of the rich, not those of the poorer & middle-income groups who can’t afford to buy and find it hard to rent. “Opportunity for all”!!! Don’t make me laugh!

  2. Ben says:

    Faisal I don’t quite think you are getting it. The UK cannot create wealth. But it can restrict supply on housing stock, which allows people to MEW which creates credit which looks like a bounce as GDP is an insane indicator of “growth”.

    They are managing numbers to stay in power and stave off collapse. If you think they are trying to help people then you won’t understand some actions. Like this.

  3. Philip Edwards says:

    Faisal,

    Remember if we “set free” all those “wealth creating entrpreneurs” how they were going to “save” not only the British economy but Europe and the US too?

    Well, they’ve had their corrupt, rotten-to-the-core free run for over thirty years now.

    The result is social misery, higher unemployment, more poverty, less housing, rip off private health “care,” rip off utility companies, Western gunboat mass murder in the East, rip off PFI in education and health, corrupt banks, increased bankruptcies and closures, corrupt monopoly neocon media, deserted cities and a Parliament of Scoundrels.

    As Gore Vidal once said, the four sweetest words in the English language are, “I told you so.”

  4. Andrew Dundas says:

    Comparisons of UK house building with our neighbours always show that ours is by far the lowest. Those comparisons also show that UK house prices rise at much faster rates than our neighbours’ do.
    Our policy difference is that we chose to ration both our housing allocations and their specifications more closely than our neighbours. Those ration coupons are issued by local planning departments.
    There’s a critical advantage in their use of rationing: home-owners make extraordinary profits and lenders are protected from default. Lenders can rely on their collateral – the house that’s mortgaged – to be an appreciating asset. There are almost no other values of family assets that are protected by such rationing. Over the medium term, house prices rise in parallel with average household incomes, so we’re due for a catch-up in prices.
    By cutting back on the supply of housing, our government has laid foundations for yet another escalation in house-prices that will greatly benefit the over-50s who are its main supporters.
    Which is why the government’s policy is to force up the price of homes: its what its supporters want.

  5. Concerned says:

    Faisal,

    Have you been gagged?

Comments are closed.