Market News
UK Housing Shortage to Deepen as Councils Cut Approvals: Times - BLOOMBERG
BY , Bloomberg News
(Bloomberg) -- Britain faces a house-building crisis due to the falling number of new homes being built with dozens of local authorities cutting back on planning targets, The Times of London reported on Friday.
The government was forced to back down on its target of building 300,000 new homes a year after opposition from Conservative lawmakers. The climb down increased the number of local authorities abandoning development plans. An additional 25 councils dropped plans to approve new housing after the government abandoned the target, while 30 had done so before Housing Secretary Michael Gove confirmed the decision.
The number of housing projects given planning permission in England is at its lowest since 2006, according to latest figures, and developers have warned that 77,000 fewer homes could be built each year — with the areas with the areas with greatest housing demand the most affected.
The treasury is concerned that the collapse in planning approvals will impact economic growth, according to the Times. The construction industry makes up 7% of Britain’s gross domestic product and is worth more than £120 billion a year.
The government’s decision to scrap the target compounds problems caused by rising mortgage costs and the end of the government’s Help-to-Buy scheme, the paper said.
