Knight Frank survey finds volumes are expected to rise, but not fast enough

Only 6% of housebuilders believe building 200,000 a homes a year is deliverable, according to a survey published by property agent Knight Frank.

The last Labour government had a target of building 240,000 homes a year, while the current coalition government does not have a housebuilding target.

Sir Michael Lyons, who is currently reviewing Labour’s housing policy, indicated in March he may recommend the party significantly raise its housebuilding target beyond 200,000 homes a year when he publishes his report, expected this Autumn.

The Knight Frank survey also found 75% of housebuilders expect development volumes to increase between now and 2020 as a result of the extension of Help to Buy, while more than 40% believe the scheme will increase the size of schemes undertaken.

The majority of housebuilders believe construction of new homes is expected to rise over the next year by more than 10%, with more than a quarter expecting an uplift of more than 25% in start volumes. 

Grainne Gilmore, head of UK research at Knight Frank, said: “The question of whether it is feasible for housebuilders to plug the housing hole left by the relative lack of government investment remains a primary concern. 

“There is no doubt that developers have stepped up activity since the zenith of the financial crisis - official data shows completions in England rose 4.5% over the last year. 

“But this still leaves development some way off the levels needed to meet demand across the UK.

“Our survey suggests however, that development volumes will continue to rise, it is just a question of whether it is going to be enough to meet that 200,000 target.”