A chronic lack of new homes being built is artificially raising house prices, and could cause major problems for the housing market, according to FPDSavills.
The inequality between the supply and demand for new housing has meant that housing output in the UK is now lower than every other major western economy, and is partly responsible for the record growth in house prices.
Richard Donnell, housing market analyst at FPDSavills, said: “This situation has come about as a result of a whole number of complex and inter-linked factors, but at the core is a chronic lack of skilled labour, lengthening planning delays, a finite amount of public funding and policies aimed at increasing housing output on previously used land.”
According to FPDSavills this has been caused by the polarised nature of the house building industry whereby private building firms are mainly looking to build profitable housing such as flats, and Housing Associations are constrained by a lack of funding. This is creating a gulf in affordable properties for first time buyers and key workers.
Donnell said: “The recent shift in [housing] policy means that we are currently in real danger of building too many flats on the edge of towns, in poorly serviced locations.”