The slowdown in the housing construction market has potential to hamper the UK’s economic growth and social mobility. Particular barriers to housing growth include a lack of investor confidence, a cumbersome and ineffective development consents system, and difficulty in obtaining mortgage finance.
There are a number of potential interventions that could help to restore confidence in the housing market and encourage a new generation of lower-carbon homes. These include incentives for communities to encourage development, reforms to financial services to allow for greater and more responsible lending, the reform of strategic planning (for example via Local Enterprise Partnerships), and measures to ensure that supporting infrastructure is always delivered alongside new developments.
The recession and global banking crisis have contributed to a significant slowdown in the UK housing market.
New housing starts and completions are at their lowest levels since the early 1990s. Furthermore, in 2008 and 2009 the number of dwellings started was significantly lower than the number completed. This suggests the potential for a lag in new housing provision that will result in shortages and, potentially, upward pressure on prices in the coming years.