This week’s graph comes from the Office of National Statistics and charts the level of house-building activity in England.

According to the latest figures, there were 29,980 housing starts in the quarter to June, a 63 per cent increase on the previous quarter.

This is the second successive quarterly rise but the year-on-year figures show that the number of new homes being built was down nine per cent on quarter two 2008.

Housing completions, meanwhile, were up 24 per cent over the quarter and were up seven per cent year-on-year.

housingstarts

The data does suggest that the house-building industry – which was hammered by the credit crunch – is over the worst, but this level of construction is a far cry from the Government target of 240,000 new homes per year.

Small wonder, then, that Professor Steve Nickell from the Government’s National Housing and Planning Advice Unit (NHPAU), has warned that lack of housing will put the pressure back on prices and aggravate the affordability crisis:

“Recessions do not have a big impact on household growth but they do cause a dip in house-building … and declining affordability is having increasingly severe impacts.

“Worsening overcrowding; lengthening social housing waiting lists; first-time buyers finding it harder to get on to the housing ladder; and adult children living with parents for longer are the direct effects.

“But there are also likely to be increasingly serious wider economic and social consequences if we do not manage to bring the supply and demand for housing back towards balance and start tackling the backlog of unmet need.

“We risk even greater volatility in house prices with the potential for even more extreme boom and bust cycles – with knock-on effects for the wider economy.”

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