Government rapped as new home completions stall

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The Independent Online

The Government's efforts to tackle the housing crisis were criticised as "totally unacceptable" after figures revealed that completions of new homes rose by just half a per cent last year.

Official statistics showed completions, which grew annually by 5 per cent between 2002 and 2006, grew by just 0.5 per cent in 2006. Some 160,230 homes were completed last year, according to the Department of Communities and Local Government, way short of a target of 209,000 new homes each year set by ministers. The Government-commissioned Barker review called for 250,000 more homes annually.

Last year, there were 183,140 housing starts, properties at the early stage of being built, marking a rise of 3 per cent.

David Stubbs, senior economist at the Royal Institution of Chartered Surveyors, said the figures "were totally unacceptable".

If growth had continued at the rate of 5 per cent a year, there would not have been enough new homes to meet demand until 2012, Mr Stubbs said. However, at the current rate of growth, it would be 2060 before there are enough new homes. "This caps a disappointing year for housebuilding," he said.

The Government, he added, is now even "further away from the 250,000 houses that the Barker review estimated are required per annum, to bring long-run real house price inflation in line with the EU average.

"The Government needs to take more action to ensure housebuilding rises to sufficient levels if it is to make good on its promises to promote an inclusive society where the poorest are not priced out of the housing market," he said.

John Stewart, director of economic affairs at the Homebuilders Federation, said the planning system is holding up the supply of land. This means there are not enough sites to build on, he said.

"Housebuilders say the planning system is as difficult as it ever has been despite the Government's reforms," he said. "The speed of the schemes has not improved."

Adam Sampson, chief executive of the homelessness charity Shelter, said the increase was "a drop in the ocean when compared with growing demand for new homes, especially social rented homes". He said: "Gordon Brown must commit to building an additional 20,000 social rented homes a year in the Comprehensive Spending Review if demand is to be met and the housing crisis tackled."

The figures show the construction rate picked up towards the end of last year, with the number of starts recorded in the autumn up to 47,570, compared with 40,800 in the previous quarter. House completions also rose from 37,700 in the summer to 41,750 in the last quarter.

The South-east and South-west continued to see a strong upward trend in houses being built, but elsewhere growth was slower.