“It is no real surprise to see the lag in new homes coming onto the market to meet higher consumer demand, as the RICS’ findings suggest. With expectations of a significant improvement in market conditions so low this time last year, IMLA’s own research shows the increased pace of growth took even mortgage lenders and brokers by surprise.
“There is no overnight fix to the shortage of new homes, but with government support fuelling a revival of mortgage lending, we do need to see the housebuilding industry stepping up to the plate. House price inflation will become less of a danger in the future as the mortgage market’s initial growth spurt levels out, but this relies heavily on a significant increase in the output of new homes to balance the equation.
“Much now turns on reviving the small to medium housebuilders who were an important part of the supply chain prior to the crash. The major builders are increasing output but this will be slow to build up and it is starting from a low base. Alongside increasing both the speculative and contracted house building capacity, we need to see more land coming forward to support increased building in three to five years’ time and continued recovery in the building materials industry.
“The reality of volatility and contraction in housebuilding is that lost capacity across the supply chain takes a long time to restore, and while that is happening housing pressures continue to grow unabated.”