New homes shortage hits record low

Commenting on the data, Steve Lees, Marketing Director of SmartNewHomes.com said:

“On assuming office, CLG Secretary Eric Pickles was quick to sweep away the Regional Spatial Strategies (RSSs) that formed the basis of the previous administration’s housing policy. In its place, however, is a policy vacuum – a nightmare scenario for the industry. The result has been a dramatic decrease in the number of new homes coming on to the market: The figures for July show a new record low in the number of new homes for sale for the second consecutive month.

“With a consultation paper not due out until late October at the earliest, and primary legislation unlikely to receive Royal Assent before November 2011, housebuilders are increasingly concerned about how they can be expected to operate given the total lack of any planning policy framework.

“The industry’s unease is also heightened as the outline details of the proposals for a ‘New Homes Bonus’ that have been made public by Housing Minister Grant Shapps – matching council tax over six years, a total of approximately £8,500 per new home – is widely seen as being simply not enough money to counter a rising tide of nimbyism. Although July proved a quiet month for the new homes market as the start of the holiday season ensured prices remained flat, the planning issue has the potential to seriously destabilise the new homes market.”

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