Building plans not enough to stop shortfall

THE HOUSING supply crisis in England means the country will have a shortfall of 1m homes in just seven years, with half the needed properties in London and the south east.

Countrywide’s quarterly analysis of the housing market, released today, shows how the demand for housing has steadily climbed since the financial crisis.

While there were only 6.5 buyers for each house on the market in November 2008, and 8.5 in November 2012, the same month last year saw 9.7 potential owners chasing each sale.

Despite the increase in demand, the construction of homes is still far lower than before the financial crisis. In London, where house prices are increasing most quickly, residential construction is still only at 81 per cent of the pre-2008 construction level.

The latest forecast from the Construction Products Association (CPA) is that the sector will grow more than the wider economy in the next two years, projecting a 3.4 per cent expansion in 2014 and 5.2 per cent higher output in 2015.

The CPA also shows how badly the sector has been damaged in recent years as private commercial output dropped by 33.1 per cent between 2008 and 2012 .