The number of dwellings where building work had started on site was 41,600 between October to December 2021, down 3% on both the previous and the same quarter a year earlier, ONS figures show.
Building control figures also show that the number of dwellings completed stood at 41,330 during the quarter. This was down 4% on the quarter and a whopping 11% when compared to the same quarter a year ago.
Reaction
Scott Taylor-Barr, financial adviser at Carl Summers Financial Services:
“With the cost of building materials having increased so sharply over the past couple of years (assuming that you can even get hold of the materials you need), it’s no real surprise that many house builders have mothballed sites and slowed down the amount of work being done.
“Their profit projections will have all been worked out with lower material costs involved, and they are now. faced with a shortage of skilled construction workers who are willing to graft at the rates of pay planned for the original development.
“Even with a healthy contingency built into the projected costs, I’m pretty sure most sites look nowhere near as profitable as they did when they were started. And that’s the nub of the problem: profit.
“Houses are built in the UK by businesses looking to make money. Lots of money. They are not social enterprises building houses for the greater good. A lack of demand and sky high house prices suits them perfectly.”
Lee Griffiths, managing director at Saxon Paddock Estates & Homes:
“Although I sense unease in the market, largely due to insanely high house price growth, we’re still valuing properties at figures that logically don’t make sense.
“These prices are still being achieved and it is almost solely down to the fact that there are so few homes available for sale.
“This level of growth is absolutely not sustainable, and the only way this ‘artificial’ growth will be controlled is to introduce quality housing stock to the market.
“Many people I speak to are worried about house prices crashing, but there’s nothing out there that really suggests this is going to happen.
“Growth may slow, but I can’t see house prices dropping any time soon due to the extreme lack of supply.”
Lewis Shaw, founder & mortgage expert at Shaw Financial Services:
“This data perfectly illustrates why our property market is defying all expectations with double digit house price growth.
“Our property market is firing on all cylinders purely because of a lack of supply causing an imbalance and forcing prices higher, not because we’ve got a growing economy.
“The reality is that house prices will likely keep rising until we fix the structural issue and build more quality homes faster. What will be very surprising is to see if house prices rise as we enter our spring, summer and winter of discontent and the seemingly inevitable recession.”
Rhys Schofield, managing director at Peak Mortgages and Protection:
“This report tells you all you need to know about why house prices continue to rise.
“Demand is outstripping supply and will continue to do so when there are extreme shortages of materials and every proposed new development has to smash down a wall of NIMBYism to even get off the ground in the first place.”
Imran Hussain, director at Harmony Financial Services:
“The report highlights exactly why house prices remain stronger than Thor’s hammer right now. As long as demand continues to outstrip supply and until the planning process is looked at in detail to speed up the process for small and large developers, this massive imbalance will continue.”
Toby Fields, director at Langley House Mortgages:
“This report is damning and a huge sucker punch for buyers. The lack of supply of houses is causing astounding competition for each property on the market and therefore driving prices up.
“We are hearing from local estate agents that there are at least 25 buyers per property and buyers are desperate to purchase, offering hugely over the asking price, some without even viewing the property.
“With more and more deposits coming from the Bank of Mum and Dad, some buyers will have much more leeway if a higher deposit is needed, again allowing more competition and higher prices. Until we are building more houses, I cannot see property prices plateauing.”
Paul Neal, mortgage & equity release specialist at Missing Element Mortgage Services:
“This is sad, sad news if you are looking at getting on the property ladder. The odds are stacked against would-be buyers and with a lack of stock, prices will only go up further.
“Something really needs to be done to help Generation Rent. Stamp Duty holidays and government-backed mortgages are all well and good, but if there are no properties to purchase, what’s the point?”
Graham Cox, founder & director at Self Employed Mortgage Hub:
“Against the backdrop of Omicron and rising living costs, it’s not hugely surprising to see a fall in the number of homes being built in the final quarter of last year.
“It’s a shame, of course, because we desperately need to address the UK’s chronic lack of affordable housing.
“We’ve been promised a huge rampup in housebuilding for years, but nothing seems to change.
“The bottom line is, property in this country remains massively overpriced. Help to Buy (a misnomer if ever there was one), years of ultra-cheap credit, and the Chancellor’s ill-advised stamp duty holiday have seen to that.
“It’s time for a radical rethink about how we view property in this country. Building more houses quickly would be a good start.”
Ian Hewett, founder at The Bearded Mortgage Broker:
“With a limited stock on sale, demand is hugely outstripping supply. This is driving up the costs, plus “affordable housing” not really being the solution it was hoped.
“This means that older properties are more in demand than new. With the large developments flooding the south east, houses are being built on greenfield, brownfield and flood plains to try and keep up with demand. And whilst NIMBYSM exists, it really does not make a massive difference as most of the developments will happen, whether they like it or not unfortunately.
“The main concern is how the infrastructure is going to cope and what the plans are to improve the road networks, medical support and education. What we need is a good portal to complain through.”
