New home starts continue to fall

NHBC new house-building statistics show that the number of applications from house builders to start new homes in the UK fell by more than half during the third quarter of this year.

NHBC's latest figures show that they received 23,185 applications to start new homes in the combined private and public sectors in the three months to the end of September, 54 per cent lower than the same period a year ago (50,250). Of that total, 13,358 related to private sector activity (i.e. excluding housing associations), showing a 67 per cent decrease on the same three month period in 2007 (40,876).

Housing association figures for the three months to the end of September revealed a slight increase in applications to start social housing properties, with starts totalling 9,827 - an increase of five per cent on the same period a year ago (9,374).

Imtiaz Farookhi, NHBC Chief Executive, says: "Our latest figures show that the downturn is continuing to have a severe impact on the output of new homes, particularly in the private sector. New home starts in England during the third quarter fell 50 per cent year-on-year to 20,239, the biggest regional decrease being in the North East where starts fell by 81 per cent against the same quarter last year - 344 compared with 1,783."

The total number of new home completions also fell during the third quarter of 2008. NHBC statistics show new build (private and public sector) completions totalled 33,299 in the three months to the end of September - 20 per cent lower on the same period last year when 41,389 new homes were
completed.

First time buyers also found their ability to buy decreased in the third quarter of 2008. NHBC's first time buyers' ability to buy index decreased by three points during the quarter to 54. 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.

Additional figures for quarter three 2008 show that the average number of new homes sold each day in the UK was 429, a decrease of 18 per cent on the same period a year ago (525).