Housing supply hit by credit crunch
- Published: 23 September 2008 09:10
- Last Updated: 23 September 2008 09:33
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England's new homes shortfall is being 'massively' exacerbated by the credit crunch, warns a new paper analysing the country's housing needs.
The analysis, carried out by former government chief housing statistician Dr Alan Holmans for the Town and Country Planning Association, says that 231,000 new homes is needed per annum to meet the growth in the number of households predicted by the government.
Last year's Housing Green Paper target of 214,000 new homes each year is not high enough, says the paper, which is due to be launched at a Labour Party fringe conference meeting.
The paper, the first independent analysis of the recently published projections, breaks down the figure to show that 128,000 households per year are being created per annum as a result of increased longevity and migration.
A further 52,000 households per year are due to rising divorce rates and separation and an extra 46,000 households per year are attributed to the increasing propensity for people to live independently.
Dr Holmans, who is now senior research fellow at the Cambridge Univeristy's Centre for Housing and Planning Research, said: "The figures presented in this paper suggest that Government targets to increase the annual rate of additions to the housing stock to 240,000 per annum by 2016 and to add three million additional units by 2020 fall significantly short of requirements."
TCPA chief executive Gideon Amos: "This first independent assessment of the latest household projections shows continued escalation in newly forming households at a time when the house building industry is unable to match demand due to the credit crunch.
"The worrying implication of this report and its picture of a burgeoning older population - 3.7 million of the population increase are aged 65 and over - is the spectre of rising overcrowding, homelessness and social exclusion."
"Even when credit conditions improve and mortgages again become available the current undersupply of additional homes, will quickly risk a return to house prices spiralling beyond peoples reach."
