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How Many New Homes Are Being Built in 2024?

As the UK grapples with a housing shortage and the pressing need for affordable homes, the question of how many new homes are being built in 2024 is more relevant than ever. we explore the current state of housing construction, the government’s targets, the challenges faced by the construction industry, and what this means for prospective homeowners and renters.

New Home Registration and Completion Statistics for Q1 2024

  • New home registrations: Down 20% in Q1 2024 compared to Q1 2023
  • New home completions: Down 13% in Q1 2024 compared to Q1 2023
  • Monthly increase in registrations: Notable growth within Q1 2024

The National House Building Council (NHBC), the UK’s largest provider of new home warranties and insurance, reported today that 21,967 new homes were registered for construction in Q1 2024, a 20% decrease from Q1 2023 (27,619).

During the same period, 26,240 new homes were completed, marking a 13% decrease from Q1 2023 (30,071).

Despite the decline, attributed to ongoing economic challenges, skill shortages, and the eighth wettest winter on record, there are positive signs. New home registrations showed month-on-month growth in the first quarter of 2024. In March, 8,320 new homes were registered, up from 6,557 in January and 7,090 in February. Additionally, Q1 2024 registrations were higher than those in Q3 and Q4 2023.

Housing Market Update

The housing market has been impacted by the Bank of England’s interest rate hikes over the past three years. Last August, the benchmark Bank Rate reached a post-financial crisis high of 5.25%, leading to increased mortgage rates and reduced demand.

However, the possibility of imminent interest rate cuts suggests that the housing market outlook could improve as the year progresses.

Despite a decline in new home registrations for the entire quarter, there was a month-on-month increase in registrations throughout the quarter. Additionally, total registrations in the quarter were higher than in the previous two quarters.

Recent figures from the Bank of England showed that mortgage approvals reached their highest level since September 2022 last month.

“Build volumes are anticipated to rise in the second half of the year as economic conditions begin to improve and consumer confidence starts to recover,” said Wood.

The decrease in housebuilding occurs amidst a national housing crisis. The average UK home is now valued at 8.3 times the average annual salary, up from 4.5 times in 2002.

A significant factor contributing to this issue is the failure to construct new homes. Between 1970 and 2023, the construction of new houses fell by 46%, according to Britain in a Changing Europe.

Government Targets in 2024

The UK government has set ambitious targets to address the housing shortage, aiming to build 300,000 new homes annually. This goal is part of a broader strategy to increase the housing supply, improve affordability, and stimulate economic growth. Several initiatives have been launched to support these targets, including:

  1. Affordable Homes Programme (AHP): Running from 2021 to 2026, the AHP aims to deliver up to 180,000 new affordable homes. This includes funding for social housing, affordable rent, and shared ownership schemes.
  2. First Homes Scheme: Introduced in 2021, this scheme aims to provide homes at a discount of at least 30% to first-time buyers and key workers, ensuring long-term affordability.
  3. Planning Reforms: The government has proposed significant changes to the planning system to streamline the approval process, encourage development on brownfield sites, and ensure that local plans are up-to-date and reflect housing needs.

Current Construction Trends

As of mid-2024, the UK is on track to build approximately 250,000 new homes this year. This represents a significant effort but still falls short of the government’s 300,000-home target. The construction industry has faced several challenges that have impacted the pace and scale of new home building:

  1. Supply Chain Disruptions: The COVID-19 pandemic and Brexit have caused ongoing disruptions to supply chains, leading to shortages of materials and increased costs.
  2. Labour Shortages: The construction sector has struggled with a shortage of skilled workers, exacerbated by an aging workforce and reduced availability of migrant labour post-Brexit.
  3. Rising Costs: Inflation and increased costs for materials and labour have put pressure on developers, affecting their ability to complete projects on time and within budget.
  4. Planning Delays: Despite efforts to reform the planning system, developers still face bureaucratic hurdles and delays in obtaining necessary approvals.

Regional Variations

The number of new homes being built varies significantly across different regions of the UK. London and the South East continue to see the highest levels of construction due to high demand and economic opportunities. However, there has also been a noticeable increase in development in other regions, such as the Midlands and the North of England, driven by government incentives and a focus on regional regeneration.

The Impact on Housing Affordability

The construction of new homes is crucial for improving housing affordability. However, the current rate of building is not enough to fully address the existing housing shortage. High demand, especially in major cities, continues to drive up prices, making it difficult for many people to afford to buy or rent a home.

Affordable housing initiatives and schemes like Help to Buy, Shared Ownership, and the First Homes scheme are essential in helping first-time buyers and low-income families access housing. However, a more significant increase in housing supply is needed to meet the demand and stabilise prices.

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