The supply and demand imbalance in the UK property market looks set to remain as new builds continue to fall short of government annual targets.
- Despite a 6% increase in new property being built across the UK in 2016, figures are still falling 80,000 short of target
- Almost 35,000 new homes were completed in Q2, a 2% year-on-year decrease
- The continued undersupply of property across the UK has seen rental costs rise by 2.4%
New home building in the UK is up 6%, but figures are still below the current annual target of 220,000 homes that are needed to meet the undersupply.
According to newly released figures from the Department for Communities and Local Government, there were 34,920 homes completed in the April-to-June quarter, up 7% on the previous three months but down 2% on a year earlier.
Data also shows that more than 144,280 homes were started in the year to June 2016, but the figures are still below the current target.
The supply-demand imbalance has contributed significantly to higher property prices and rents across many parts of the country, with the latest rental price data from the Office for National Statistics revealing that rents in the private rented sector rose by 2.4% across the UK in the 12 months to July.
Mortgage lender LendInvest said that figures showed housebuilding was falling well short of the government’s target of building 220,000 new homes a year, the minimum needed to help address England’s housing shortage.
Rod Lockhart, Managing Director at LendInvest, said: “At the current rate of modest housebuilding, we will fall well short of the government’s target of one million new homes by 2020, and fail to make inroads into the sharp housing undersupply in the UK.”