New homes completions 'will drop below 100,000' next year

The number of new homes built in the coming year will drop below 100,000, based on figures from today's UK Construction Market Survey, published by the Royal Institution of Chartered Surveyors.

After sharp declines in the first two quarters of 2008, private housing workloads plunged again in the third quarter, with 60% more surveyors reporting a fall than a rise. 

It makes the government's target of building two million homes by 2016 look extremely unrealistic. To reach the target, 200,000 new homes a year would have to be built, only 66,220 new homes have been built so far in 2008, with a fall below 25,000 per quarter likely by the end of the year. 

RICS Senior Economist Oliver Gilmartin said: “With finance for projects becoming increasingly difficult to obtain, the Government’s ambitious target of 2 million new houses a year by 2016 is likely to fall well short. At current levels of production the number of new homes built will fall below 100,000 in the coming year.”

The survey also found that, for the first time, construction workloads across all sectors are now in decline. In the previous quarter, private industrial and infrastructure had recorded positive net balances. 

Gilmartin added: “The outlook for the construction industry is extremely bleak with the previously strong infrastructure sector now unlikely to step in as the downturn in property markets resonates. A rapid solution to the log jam in credit markets is necessary to limit the severity of the current downturn which is starting to affect the country’s infrastructure”