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Housing starts forecast to climb to 155,000 next year General

Housing starts forecast to climb to 155,000 next year

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Top Story
Housing starts forecast to climb to 155,000 next year

The Royal Institution of Chartered Surveyors is forecasting housing starts will rise again next year helped by a 3% rise in house prices across the UK.

Forecasters said price growth would be driven by recent changes to stamp duty, continuing demand and lack of supply of property.

The housing market forecast warned lack of supply to the housing market remained a running trend, and one that could not be addressed fast enough.

But with increasing levels of house building projects underway forecaster expect housing starts to rise to 155,000 in the UK during the year.

This is compared to 125,000 in 2013 and only around 100,000 in 2012.

It warned that while this was an encouraging trend, it was still insufficient to address the more rapid growth in population and would leave significant shortfalls in all tenures.

Jeremy Blackburn, RICS Head of UK Policy, said: “The political ambition to meet the UK’s housing deficit of 240,000 means that debates around planning, development and delivery will monopolise the pre-election period in the run up to May 2015.

“We’ve seen four housing ministers in this Parliament and there is no reason to think that housing won’t continue to be a political football in the next.

“What we need is certainty, clarity and confidence from government to keep us building homes. Reforms to stamp duty should underpin public confidence and lead to a greater number of housing transactions and we would now look to any future government to review Council Tax.”

On house price growth in the regions, RICS warned London’s pause for breadth would continue into 2015 with prices remaining flat.

The West Midlands, North West and Yorkshire & Humberside regions will deliver strongest growth at 5%, with South West and Wales increasing by just 2%
Predicted growth by region in 2015 (%)
East of England    3
East Midlands    3
London    0
North East    3
Northern Ireland    4
North West    5
Scotland    4
South East    5
South West    2
Wales        2
West Midlands    5
Yorkshire and Humberside    5

Although there are some concerns about mortgage availability in the wake of the Mortgage Market Review, a firm economy and stamp duty reform should underpin sales transactions which RICS expects to rise from 1.22m in 2014 to around 1.25m in 2015.

But this is still well below the 1.67m achieved in 2006.
Simon Rubinsohn, RICS Chief Economist, said: “Although the MMR may now be resulting in mortgage lenders being a little more discriminating in the supply of finance, the recently announced, and long overdue reform of stamp duty, is likely to provide a tonic for the market across many parts of the country, particularly for first-time buyers.

“That said, the bigger affordability issue is not going to go away highlighting just how important it is to speed up the supply pipeline of new homes over the coming years’’.

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