The latest figures from the National House Building Council show that housing starts in February were down 16% on the same month last year. Completions also fell, down 15% from 11,485 in February 2000 to 9805 this February.
Housebuilders also reported fewer house sales last year compared with 1999, despite the increase in demand fuelled by lower interest rates. Many, including Berkeley Group, Wilson Bowden and Bellway Homes, claimed that planning delays were the main culprit. Bad weather was also blamed.
Industry experts put demand at about 200,000 houses a year throughout the UK, but housebuilders are struggling to build 150,000.
Bellway said last week that its progress was being "tempered by a lack of availability of homes to sell" despite high interest from homebuyers. Bellway finance director Alan Robson was particularly scathing. He said his company, which last week announced pre-tax profit up 15% to £35.1m for the six months to 31 January, had only built 72 more homes than for the same period last year. He said this was caused by planning delays blocking new developments from starting on time.
Jonathan Timms, an analyst at investment bank ING Barings, said the demand for new-build housing had been stimulated by the low cost of mortgages, which are at a 35-year low. He said this market was undersupplied by housebuilders largely because of planning delays.
He said: "Affordability is good at the moment and that's a really good situation to be in for housebuilders. They could sell the houses – if they could build enough of them – but they struggle to do that and it's nearly all down to planning delays." Berkeley managing director Tony Pidgley criticised the impact of planning delay on brownfield sites. He said: "The government needs to address this if they want to encourage regeneration on brownfield sites. Two years for planning permission is too much – one year should be ample." Wilson Bowden chief executive and chairman David Wilson confirmed that the planning system was constraining the amount of houses his group was building. The number of homes built by the group fell from 3623 to 3604 for the year to 31 December 2000.
The NHBC's figures were backed up by DETR statistics on completions. The department said 12,600 houses were completed last February but only 11,300 this February, a fall of 9%.