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Housing supply to get worse not better

Micheal Gove, Secretary of State for Levelling Up, Housing and Communities recently announced measures to boost housing supply by unlocking planning restrictions on ‘brownfield sites’. 

As part of its long-term plan for housing, the government announced that every council in England will be told that they urgently need to prioritise brownfield developments and Gove instructed them: “to be less bureaucratic and more flexible in applying policies that halt housebuilding on brownfield land.” 

The scale of the challenge to quickly boost housing supply is starkly evident when set against the latest data taken from the monthly Glenigan Index - which regularly reports on construction sector activity. 

In the February 2024 edition of its Construction Review, Glenigan highlight that the numbers of new homes being produced by house builders is reducing. 

The latest data shows that residential development scheme starts remained depressed, falling by 16% during the latest index period to be 34% lower than a year ago. 

Private housing was down 18% against the preceding three months, with starts 36% weaker than 2023 levels. And it was an equally grim outlook for social housing, where project start levels dropped by 9% compared to the preceding three months and by 28% against 2023 figures. 

Commenting on this data led report, Michael Wynne, director of the sustainable housebuilder Q New Homes, said: “Demand for residential construction projects remains fragile, and levels of work continue to slide – even if the rate of decline is easing. 

“While the falling cost of mortgages since the start of 2024 has encouraged many would-be buyers who sat out 2023 to restart their search for a new home, this has yet to feed through to the construction front line. 

“Residential property developers, who typically look ahead 18 to 24 months in their business planning, still face high material, labour and borrowing costs, and only the leanest and best integrated are able to commit to a full pipeline of projects.

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