House Building Starts Decline in First Quarter of 2024

The latest data from the Office for National Statistics indicates a significant decline in house building starts in the first quarter of 2024 compared to the same period in 2023, despite the UK’s exit from a recession. According to the ONS, house building starts fell by 34%, with just 29,820 new homes started in Q1 2024, down from 44,940 in Q1 2023.

Additionally, the number of completed homes in Q1 2024 decreased by 17% compared to the previous year, marking the poorest quarterly performance since 2016. As a result, the projected number of completed homes for 2024 has been revised down to 153,000, significantly below the government’s target of 300,000 homes per year.

Calls for Increased Government Support

In response to these figures, there have been increasing calls for greater government support to stimulate house building. Melanie Leech , Chief Executive of the British Property Federation , emphasized the urgent need to address the shortfall in housing supply. She stated, “The housebuilding figures for the first quarter highlight the enormity of the challenge we face in achieving the government’s target of 1.5 million homes by 2029."

Leech pointed out that to meet this target and fulfill the housing needs of individuals and families, the focus must extend beyond just homes for sale. "We must also accelerate the growth of the build-to-rent sector and explore ways to unlock the delivery of affordable housing across all tenures," she explained.

Leech noted that the build-to-rent sector, also known as multi-family housing, plays a crucial role in housing supply in countries like the US and Australia. She believes that the UK has a significant opportunity to expand this sector through the government’s planning reforms, which could attract more long-term institutional investment and help alleviate housing supply pressures in urban areas.

“For affordable homes, the challenge often lies in viability,” Leech added. “We have urged the government to increase the level of subsidy available, which would, in turn, unlock more private capital to work in partnership with housing associations.”

Leech concluded by affirming the property sector’s commitment to collaborating with the government to tackle the long-term issues of housing undersupply and underdevelopment. "We are pleased to see the new government proactively addressing some of the challenges that developers are facing on the ground,” she said.

These developments underscore the urgent need for strategic action and collaboration between the government and the property sector to ensure adequate housing supply in the coming years.

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