Smartnewhomes warns of family home crisis

Smartnewhomes.com, the UK’s leading new homes website, is calling for immediate Government action to avoid a long-lasting availability crisis, as the supply of new family homes dries up.

The latest Smartnewhomes Index has shown a significant decline in the number of family homes coming onto the market, with semi-detached homes comprising just 8% of the UK new homes mix in February, compared to 56% for apartments.

The number of new homes coming onto the market has fallen 59% over the last year, with detached and semi detached properties suffering the most significant declines – down 76% and 73% respectively. However demand for these homes remains high, together comprising 53% of all new home searches, compared to just 39% for apartments.

Smartnewhomes.com is now calling on the Government to take a longer term view of the housing market and to inject funds, which will directly support the production of new family homes and address an already worsening shortfall. Without this assistance it is feared that once mortgage finance is freed up, the supply/demand imbalance could result in the return of unsustainable house price growth, pushing the price of family homes out of reach for those at the lower end of the market.

David Bexon, Managing Director of Smartnewhomes.com, comments:

“While billions of pounds are being pumped into the banking system, there is a concern within the industry that the Government is neglecting a key area of the market – the supply of family housing - which will be pivotal for future recovery.

“The lack of available mortgage credit has already had a huge impact on new home starts, with developers unable to commence new sites due to a lack of available funding, as they struggle to shift existing stock. The Government has tried to boost sales by injecting funds into schemes such as HomeBuy Direct, but this is not enough.

“While assisting a number of first time buyers into the market, the Government is doing little to support the need for suitable family homes, and it should start offering direct financial incentives for housebuilders to kick-start developments. Planners also need to be made aware of the long term stock shortage and prioritise planning applications for family homes now.

“Affordable family housing has been in short supply for some time, long before the credit crunch hit, but demand is as high as it has ever been. As things stand, developers will be in no position to meet this demand once the mortgage market reopens, and we are in danger of entering another unsustainable price boom period as a result.”

For more information, visit smartnewhomes.com.