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UK house-building hits highest levels since 1980s

9th February 2007 Print
Fashion isn't the only trend seeing an eighties revival, house-building is enjoying a popular resurgence too. According to NHBC, whose warranty covers more than 80% of new homes in the UK, 185,000 new homes were built during 2006, a figure reminiscent of the housing boom of the late 1980s.

The last time house building reached such high levels was in 1989 when over 191,800 new homes were built. During the nineties house building declined, with builders and developers producing on average 158,900 new homes per year. In 1992 the output of new homes fell to a low of 146,200.

Imtiaz Farookhi, NHBC Chief Executive, said; "House builders are clearly rising to the challenge laid down by Government to deliver 200,000 new homes a year in England by 2016.

"Our latest figures show that the rate of house building is at its highest for more than a decade. The number of new homes built last year was up seven per cent on the previous year and 25 per cent higher than the number of homes built five years ago.

"If we continue to build at these levels, it is imperative that consumer protection standards are maintained, particularly in light of the recent Government announcement on tougher environmental standards. The Government has set a deadline for all new homes to be zero carbon within a decade and, in light of such an ambitious target, finding the best technologies and construction methods to cut carbon emissions is a clear issue for the industry.

"Whilst NHBC fully supports the industry in meeting the target to cut carbon emissions, we must ensure that the needs of consumers remain paramount and that they are consulted during the process. I am pleased that NHBC's independent research institution, - the NHBC Foundation - has a variety of research related to the zero carbon agenda which will be published throughout the year."

Additional statistics by NHBC reveal that, based on actual selling price, during the last quarter of 2006, the proportion of new homes priced at over £150,000 went up to 73 per cent, an increase on the same period in 2005 (69 per cent).

First time buyers found their ability to buy dropped in the fourth quarter. NHBC's first time buyers' ability to buy index decreased by nine points during the quarter to 58 (the revised figure for quarter three 2006 was 67).

The index is based on a formula which takes into account the average cost of homes bought by first time buyers, average income and mortgage interest rates (from the Nationwide Building Society). The higher the index, the greater the ability to buy.

The average number of daily sales of new homes in the UK for quarter four 2006 was 614, an increase of 14 per cent on the same period in 2005 (540).