Truth behind UK new homes 'boom'

HOUSEBUILDING is booming, it seems. Figures out this week are expected to show that the number built in October was sharply up on 12 months earlier. And that just continues a trend. In September, 13,700 homes were completed, compared with 13,300 in September last year.

This sounds impressive and by recent standards, it is. But the longer-term picture is different.

Despite the notion that a brick and concrete tide is swamping the country, new housebuilding is at a 50-year low. In 1995-96, 188,900 homes were completed. By 2000-2001, this had sunk to 167,500.

And over the longer run, the slide is even more dramatic. In the early Fifties, Harold Macmillan, then Housing Minister, was building 300,000 council houses a year on top of 50,000 or so houses for private ownership. Compare Macmillan's achievement with the record of the recent past. In 2000-2001, local authorities and housing associations together managed to build just 24,400 dwellings.

In England, where population pressures are at their most acute, the fall is dramatic. Roof, the housing analysis body, said: 'Last year, 135,000 homes were completed in England - the lowest total since 1947.'

To an extent, comparisons with the post-war years are unfair. Then, housebuilding was as much a matter of slum clearance as of meeting consumer demand, and public housing played a key part in this.

Macmillan's predecessor, Nye Bevan, insisted on middle-class housing standards for working-class tenants. In the Sixties, Labour's Richard Crossman put his faith in system-built tower blocks.

As recently as the early Seventies, 80,000 slum dwellings were cleared annually. Now, the figure is about 1,000.

But this month could bring a crucial breakthrough for housebuilders. On December 12, the Government's green paper on planning reform is expected to propose speeding up the planning system - a move that environmentalists fear will strip local people of the few powers they have to reject massive housing schemes.

Roof's Julian Birch said: 'Today, private housebuilders would cite planning delays as a key factor in the decline in building.'

But he added that 'draconian cuts' in public funds for social housing - council accommodation and publicprivate housing association dwellings - were also to blame.

Roof calculates that total spending of £7.76 billion between 1992 and 1997 fell to £3.2 billion between 1997 and 2002.

In part, this reflects the end of the recession of the early Nineties, in which about a million people lost their homes through repossession of owner-occupied property. Many then went to live in social housing.

But Birch warns that the building industry's continuing focus on 'detached four-bedroom homes', combined with niggardly funding of public housing, is not cost-free.

The huge £14 billion bill for housing benefit, which is claimed by 4.7 million people and accounts for 3.5% of all public spending, is effectively the price of too few council and housing association homes to meet demand.

In its first term, Labour triggered a furore by suggesting that more than a million new houses were needed, many on greenfield sites.

Now the Department of Transport, Local Government and the Regions gives no such hostages to fortune. Instead, it works with local authorities to make sure that so-called 'brownfield' sites are given priority for planning permission.

Whatever the thrust of the green paper, one thing is certain - with an extra 3.8 million households coming into existence between 1996 and 2025, the building industry's modest output will have to rise substantially.

Good news for the builders - but not for those in their target areas. Hugh Ellis of Friends of the Earth said: 'We need a policy of encouraging people away from the South-East. Things cannot go on as they are.

'Counties such as Hampshire are simply running out of space.'