May 2013: New housing starts for Jan-Mar 2013 were 4% up on the previous qtr, with the majority of that growth coming from the private sector – new starts for public housing were up only 1%.
Interestingly though, when compared to Q1 2012, new housing starts were a much healthier 15% higher.
This confirms what we’ve seen in the market from January this year to date – growth while not dramatic, is building (pardon the pun) steadily.
Another major point to consider is that this growth was (virtually) all before George Osborne announced the Help to Buy scheme, which judging by recent comments from major house builders Barratt, Persimmon and Taylor Wimpey, is increasing interest and reservations significantly.
Mervyn King, who is heading toward retirement from his role as Governor of the Bank of England, made clear his thoughts about state backed mortgages yesterday – maybe ok to stimulate growth short-term but definitely something the government should wind-up after the current scheme runs out.
Which is not a view shared by the Federal Reserve and US Government, their Quantative Easing scheme (QE) has been built around purchasing mortgage-backed bonds. While this approach has its critics, what it has proven to do over the years since the crisis, is to help the American housing market recover much quicker than the UK.
Right to Buy stats were also released last week, which showed a marked uplift in the numbers of people applying to buy their local authority owned property.
Right to Buy gives opportunity through government support which lowers the mortgage interest rate – providing a chance to own their rented property for thousands who otherwise might not have been able to.
There’s something very British about the possibility of home ownership, and whatever your political views helping people who cant help themselves is part of what being an advanced democracy is all about.