Housing starts this year are likely to be at their lowest level since the end of the Second World War according to the Construction Products Association.
The Construction Products Association have re-issued their economic forecasts in the light of the ongoing credit crunch and housing market gloom.
The Association forecasts a huge drop in housing starts for 2008, taking numbers to their lowest levels since 1945. Starts this year are forecast to be only 147,000, a massive 27% down on 2007’s numbers with the private housing sector faring even worse with a fall of 30% to its lowest level for 16 years. The number of social housing starts will also fall far short of the government’s target of 45,000 new homes by 2011.
The new forecast, issued on June 17, also shows housing RMI, the merchant trade’s traditional bread-and-butter market, languishing at last year’s levels for the private sector spend, and dropping by 4% in the public housing arena.
Total industry output is now expected to fall by 1.3% for 2008 instead of rising as previously forecast.
Prospects for infrastructure work are a little brighter, thanks to the Building Schools for the Future programme, and the Olympics projects, although growth here is more than outweighed by the decline in the housing market, a sharp fall in investment in new industrial buildings, and reduction in the repair and improvement to existing social housing.
Michael Ankers, Chief Executive of the Construction Products Association, said: “The impact on the new build housing market has been more severe than any of us anticipated. To be starting fewer new homes than at any time over the last 60 years illustrates the scale of the problem we now face, especially given recent reports from people like Kate Barker that we needed to increase the number of houses that we build. Unless something is done urgently to address this problem, the capacity in the industry will be cut to a level which will take a long time to build up and it will not be able to meet the inevitable pent up demand for new housing.”
“In response to these forecasts we are asking government to respond urgently to the housing crisis by; providing help for first-time house buyers to secure mortgages; investigate ways in which the MPC interest cuts can be fed through to mortgage payers; and by increasing their social housing ownership scheme. It is also essential that the government remains committed to the Capital Investment Programme as set out in last year’s Comprehensive Spending Review.”