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190,000 New Homes Brings UK Closer to House Building Target

The government’s target of 1 million new homes by 2020 is ‘potentially’ achievable – but still fails to meet demand, according to new research.

The government’s target of 1 million new homes by 2020 is ‘potentially’ achievable – but still fails to meet demand, according to new research.

Research from property agent Savills shows that a total of 189,650 new dwellings were delivered to the market in the year to March 2016 – with the overwhelming majority of these (86.4%) being new build homes.


The momentum for new properties also continued throughout the summer, said Savills, with analysis of Energy Performance Certificates (EPCs), a type of energy assessment required for new properties, revealing that just over 200,000 certificates were issued in the year to September 2016.


According to the report, the current pace of growth could see the government reach their target for the provision of new homes before the end of this Parliament.


Despite growth in the number of properties entering the market, Savills projects that the government’s target remains too low to meet demand, with the agent forecasting a need for 300,000 new homes each year – 50% higher than the current government projections of 200,000.


In the private sector, completions have also risen driven by increased participation of smaller housebuilders in the construction industry, often focusing on sub-markets such as retirement housing and build-to-rent developments.


The report also addressed fears concerning the impact of the EU referendum on the construction market, affirming that ‘many indicators are showing activity rebounding to normal levels’, with the exception of London, where the new build market is still lagging behind due its greater vulnerability to recent tax hikes.


Although Savills expects economic growth to slow in 2017, the agent asserts that the property market will continue to benefit from record-low mortgage rates, with house prices projected to rise by 13% over the next five years.


Earlier this month, mortgage lender Halifax revealed their projections for house price growth of between 1% and 4% in 2017, in line with Savills’ forecast.

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