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House building at record low
Mira Bar-Hillel, Property Correspondent24.09.08
Building began on just 635 private homes in London last month, the lowest figure since records began.
The National House Building Council, which registers all new homes, found private starts were outnumbered by the 659 social homes on which work began in the same month.
For the three-month period from June to August this year, there were 2,769 social houses compared with 1,743 private ones in the capital.
NHBC chief executive Imtiaz Farookhi said: "The social housing sector is currently showing more resilience to the downturn."
The crisis in private house building, which blows a hole in the Government's proposal for three million new homes by 2020, was highlighted in late June when a number of leading builders announced that the credit crunch and mortgage problems had caused a slump in sales.
Companies including Persimmon, Barratt, Bellway, and Taylor Wimpey saw their share prices savaged and were forced to cut thousands of jobs.
The value of Britain's seven biggest builders listed on the stock market crashed by nearly 90 per cent in the 18 months to this July. The Government's so-called "rescue plan" for the housing market has had little impact so far and is not expected to revive the market in the near future.
Steve Turner of the Home Builders Federation said: "We need decisive government action that will get liquidity back in the mortgage market."
In the south-east region outside central London, NHBC recorded a 50 per cent fall between June and August this year compared with the 8,768 homes started in the same period last year.
Only 2,229 private homes were started and 2,186 social units.
Reader views (6)
Year on year housebuilders as with all other companies have been pressurised and expected to report masive profit increases to the city and shareholders,failure to do so immeadiatly resulted in staff cuts etc
Now is the time to change and manage companies and people and to report smaller margins
The 10/15% increase year on year are now over and shareholders will have to accept this change
- David Macey, winchester
Property is vastly inflated in the South. We really need to concentrate on reducing population numbers. We are the most densely populated area of Europe with a creaking Victorian infrastructure.
- Frank, Home Counties, England.
more social housing will be built at the cost of the tax payer in line with labour policy, who will they house??
mostly to people who arrived recent, whos religious believes differ somewhat, just like there tax paying believes.
- Dan, london
I predict falls of 40% or more from the peak before there is any recovery in prices. We have too much debt in our economy and that needs to be worked out of the system before housing takes its next upward trend - in 4 or more years time.
In the meantime housebuilders will go to the wall, taking builders merchants and similar suppliers with them. It will get very ugly.
- Dave Davies, Basingstoke, Hants
What the hell!?
- Kelly, Newyork
This is a total nonsense. UK property is still vastly overvalued! Builders have had vast profit margins for years and would not come to harm making slightly less profit. They are just extremely greedy!
- Michael, London
