Newspaper article The Journal (Newcastle, England)

Pressure Grows for Rural Homes

Newspaper article The Journal (Newcastle, England)

Pressure Grows for Rural Homes

Article excerpt

Byline: By Francesca Craggs

Tens of thousands of homes need to be built every year to meet the growing demand for property, a study has concluded.

A lack of land available to developers is creating a housing shortage, according to a review of housing supply by Kate Barker, a member of the Bank of England's Monetary Policy Committee.

She said this was a major factor contributing to soaring house prices and had led to many people being priced out of the market. In response, Gordon Brown's Pre-Budget report this week signalled new incentives to encourage housebuilding.

According to Ms Barker, a quarter of planning applications are refused and the time taken to win consent has increased.

She said: "The main constraint with housing supply is a series of issues relating to land.

"There needs to be some quite radical reform to how the planning system works, but not a relaxation."

She said that while more land was needed for development, targets for redeveloping brownfield sites should be kept, and more building should not come at the expense of quality.

In 2001, only 175,000 homes were built in the UK, the fewest since the Second World War. In the past 10 years the number was 12.5pc lower than in the previous decade. Ms Barker said this had contributed to UK house prices rising by 2.4pc in real terms during the past 30 years, compared with an average of 1.1pc in Europe and 0pc in Germany.

As a result, last year only 37pc of new households in England could afford to buy a home, compared with 46pc in the late 1980s. She said 39,000 additional homes a year were required on top of those being built just to keep pace with an increase in households, but an additional 145,000 a year would be needed annually to lower the real rate of house price inflation in the UK to the European average.

Neil Foster, of CSH Residential in Newcastle, said: "There is a desperate shortage of quality homes in the North-East. The whole business of house price inflation starts with supply and demand.

"The fewer properties there are to go round, the more we have had to pay for what is available - especially over the past three to four years. …

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