The construction market is buzzing with activity, particularly for new homes, as recent figures show promising signs of growth, albeit with reservations about the viability of ambitious government housing targets. New home registrations surged by 40% during the third quarter of 2024, marking a substantial rebound compared to the same period last year. According to the National House Building Council (NHBC), there were 28,724 new homes registered, up from 20,449 the previous year. This growth reflects increased demand and activity on construction sites across the nation.
Interestingly, detached homes led the charge, with registrations skyrocketing by 80% year-on-year, totaling 10,167. Semi-detached homes also saw significant growth, with 9,373 registrations, representing a 62% rise. The trend was similarly positive for terraced homes, which reported 4,460 registrations—up 30%. Bungalows saw annual growth of 48% with 338 newly registered, but apartments stood out for their decline, experiencing an 18% drop to 4,386 registrations.
The NHBC’s chief executive, Steve Wood, emphasized the cautious optimism felt among builders. He remarked, "Our latest quarter’s figures show new home registrations are holding steady, with some signs of increased activity on site and an emerged mood of cautious optimism among house builders." Yet, there's still substantial work to be done to align growth with government goals. The overarching target is to deliver 1.5 million new homes by 2029, which many industry experts suggest is likely to take considerably longer.
Developers and other industry stakeholders express reservations about the government’s timeline, particularly after the Chief Executive of Homes England shared internal thoughts indicating the timeline may realistically stretch to 2034. This comment came from Peter Denton, who noted the ambitious goals of the Housing Minister but also highlighted the scale of the undertaking involved. He described the pledge of 1.5 million homes as “amazing and incredible ambitions,” albeit one requiring significant legislative support and resources over two parliamentary terms.
Rico Wojtulewicz, head of housing and planning policy at the National Federation of Builders, succinctly put it: "There is no chance the Government’s plan for 1.5 million homes will be delivered in five years." He underscored the current reliance on large-scale projects handled by big builders, which traditionally tend to take much longer to complete enterprises of this nature.
Perplexingly, even as national registration numbers soar, the situation is not uniformly rosy across the UK. London is experiencing noticeably stark declines, with new home registrations down by 50%. The total number of new property registrations there shrank to just 1,334 during the same quarter. Such contrasting figures highlight the uneven state of the housing market, which raises questions about local policy, demand dynamics, and construction rates.
Housing associations, meanwhile, grapple with tighter conditions. The NHBC's numbers indicated just 8,845 new homes were registered within the rental and affordable sector, which is only up by 12%. There appears to be tension for associations, finding capital budgets increasingly drawn toward refurbishment of existing stock rather than new developments. This, coupled with rental and temporary housing expenses, is placing additional strain on their operational capabilities.
Despite substantial increases noted across regions like the North West, North East, and South East, persistent challenges such as skills shortages and bureaucratic bottlenecks plaguing the planning process continue to hinder progress. Steve Wood emphasized the necessity of tackling these obstacles to sustain growth through 2025 and beyond.
The recent decrease of 9% in completed new homes—totalling 27,868—is yet another factor affecting the housing market's growth. If this pattern continues, hitting the government’s ambitious target will undoubtedly necessitate not just optimism and strategic planning but perhaps even radical policy reforms.
Looking forward, the government has reportedly taken steps to bolster local councils' abilities to meet their new housing targets. Last July, directives were issued mandatorily requiring councils to undertake housing initiatives geared toward the delivery of additional homes, which could theoretically align with the broader target of 1.5 million by the set date.
Nonetheless, maintaining momentum will require proactive measures from developers and government entities alike. While initial signs such as funding pledges from high-level officials like Chancellor Rachel Reeves show promise, continued easing of interest rates and boosting consumer and investor confidence will be equally pivotal. The NHBC noted significant correlation between these economic factors and the pace of housing supply progression, arguing for concerted efforts to create the right conditions for growth.
With these mixed signals, stakeholders remain hopeful yet cautious, as they navigate the complex interplay of policy, market demand, and economic pressures affecting the construction of new homes. Investors and builders will be watching closely to see whether effective policies translate to tangible results on the ground, as meeting housing needs increasingly becomes tied to the overarching narrative of economic stability across England.
