New figures show that the housing industry is performing well, which is an indication that the economy overall is improving. One of the main factors behind this strengthening of the market is the growing level of mortgage application acceptances, which is enabling more buyers to get onto the property ladder. The figures released by the National House Building Council (NHBC) highlight that the number of properties being registered has hit a seven year high. In the first quarter of this year 40,281 new properties were registered. This is the highest figure that has been reached in a single three month period since the fourth quarter of 2007. Government support and initiatives are behind some of this growth. Mortgages are now more widely available then they were a couple of years ago and the Help to Buy scheme is boosting the number of potential buyers.
Focus on detached homes
As well as the overall increase in new homes, there has been a significant rise in the amount of detached properties that are being registered. This is another sign that the economy is doing well, as these homes typically demand a higher sale price. The construction figures for this type of property dropped dramatically during the recession and made up just 15% of new builds in 2008. At this time, developers wanted to make the best use of the space that they had available and generate increased profits, which led them to concentrate on apartment blocks. However, the latest data highlights that detached properties are beginning to gain favour with home buyers again. In the first quarter of 2015, 10,600 detached properties were registered with the NHBC. They now account for 26% of the market, which is the highest level the sector has reached since it hit 29% in 2003.
A good outlook
The homes that have recently been registered are those that developers are looking to build in the coming months. This shows that there is a good pipeline in place for the remainder of this year. These properties will soon be on sale for home buyers to move into once they’re complete. In 2014 over 145,000 properties were registered, which compares to only 88,000 across 2008. This indicates just how far the industry has come since the dark days of the recession. If the current activity levels are maintained, we could reach 160,000 registrations this year. However, even though this looks a good figure compared to more recent years, there still needs to be a further boost to the market if we are to realistically meet the target of 250,000 new properties each year. This is the figure that we ideally need to hit in order to start resolving the housing shortage. An increase in the housing sector overall is good news for other parts of the construction industry. There will be additional requirements for supplies and labour, as developers look to build these new homes as quickly and effectively as they can.