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The UK government has not delivered upon construction of 300,000 new homes since the 1970's putting even further pressure on housing supply in an already chronically undersupplied market.
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Target of 300,000 New Homes Per Annum NOT Being Achieved
In 2021, only 228,370 homes were completed and it is highly unlikely that even this figure will be met this year.
Recent research conducted by Sirius Property Finance, a debt advisory specialist, sheds light on the government's inability to fulfil its housebuilding targets, indicating that new targets are likely to be empty promises given their significant failure to meet previous goals.
By analysing historical data on dwelling completions in England dating back to the late 1970s, Sirius Property Finance compared the number of homes actually built to the government's target of 300,000, initially set by Chancellor Phillip Hammond in November 2017.
The government recently decided to abandon its goal of constructing 300,000 homes, which was originally outlined in the 2019 Conservative manifesto and intended to be achieved by the mid-2020s. When the target was first introduced by Chancellor Hammond in November 2017, only 162,470 homes were constructed across England that year, falling 46% short of the intended goal.
The total number of homes built gradually increased to 177,880 in 2019, the highest figure since 2017, but still 41% below the 300,000 target.
However, the COVID-19 pandemic had a detrimental impact, causing the number of homes built to decline to 146,630 in 2020, which was less than half of the government's annual target. In 2021, there was a slight recovery with 174,930 new homes delivered.
It is estimated that only 170,200 new homes were built across England in 2022, reflecting a 3% year-on-year decrease in output and a significant 43% shortfall from the annual target of 300,000 homes.
UK Government 45% Behind Target New Build Homes
Since 2020, when the government aimed to achieve 300,000 new homes annually, only 491,760 out of the proposed 900,000 homes have been built. In fact, the government has not come close to meeting this annual target in the past 45 years. The highest level of housing delivery in a single year was in 1978, when 241,310 homes were constructed.
Nicholas Christofi, Managing Director of Sirius Property Finance, expressed his disappointment, stating that the government's failure in housing delivery is evident. He further criticised the government for watering down targets instead of committing to solving the housing crisis. Christofi anticipates that the upcoming spring statement will reveal a lackluster approach to housebuilding, rather than a genuine commitment to meaningful targets. Given the government's history of unfulfilled promises, any new ambitions they may have are likely to be mere recycled rhetoric, offering little in terms of actual homes built.
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Impact on Property Prices: As the government continues to fail to deliver on its target of 300,000 new homes each and every year, the gap between supply and demand is dramatically increasing, which despite economic conditions will cause upward pressure on property prices. Cities such as a Manchester are forecast to experience an increase in property prices of 19.3% over the next five years and an increase of 21.6% in rental values, which are the highest predicted across the six top cities in the UK.
