If you want to know what the weather will be like tomorrow, just look out of the window. The thinking here is that, more often than not, tomorrow’s weather is pretty much a continuation of today’s weather. There are always risks in doing so, but it would be tempting to apply the same principles to the UK housebuilders.
Left to their own devices, the housebuilders would happily increase output, offsetting any increase in raw material and labour costs with higher selling prices. And without significant outside interference, this looks to be the likely scenario for the coming year. The key pillar of support is the continued and chronic imbalance between supply and demand. The UK needs to build around 250,000 homes a year just to meet demand. But on top of this we have to add years and years of undersupply, which means that achieving a government target of providing 1m new homes by 2020 (which seems unlikely) will not solve the shortage.
This target was preceded by plans in 2008 to build 200,000 houses a year by 2016; the actual figure will be nearer 170,000. And rather belatedly, housing minister Gavin Barwell has admitted that the 1m target will be missed, and the provision of £18m to help local authorities improve the planning process that housebuilders constantly cite as one of the principle constraints on greater output looks miserly at best.