House building levels in England and Wales are set to fall in 2014/15 despite a resurgent construction sector, multiple government efforts to encourage more homes to be built and a deepening housing crisis, it has been claimed.
An official document leaked to BBC programme Newsnight contained an estimate by the Department for Communities and Local Government (DCLG) that there would be 128,000 housing starts during the year before the 2015 general election, a 4% annual drop.
This is despite a rapid acceleration in housing starts at the end of 2013/14. In the three months to March, before the start of the next fiscal year, there were 36,450 housing starts – up 33% on the same quarter a year before.
Residential housing work is cited by a number of construction sector surveys as being the main driver of firms' output at the moment because of the housing market revival.
The housing crisis will be one of the key election issues in 2015. House prices are spiralling because of a serious shortage of supply and soaring demand off the back of an economic recovery and the Bank of England's record-low base rate of 0.5% holding down mortgage costs.
This is pricing out some aspirant homeowners, particularly in London and the south east. The housing supply is also coming under strain from a rising population.
An official estimate of the UK housing need puts the annual new homes need at 290,500 a year until 2030, well above the level of house building.
But the government defended its record on housing, insisting it has "pulled out all the stops" to increase supply.
"We inherited a housing market suffering the aftershocks of an unsustainable housing boom, and a planning system that pitted neighbours against developers and built nothing but resentment," said housing minister Kris Hopkins.
"Since 2010 we've pulled out all the stops to get Britain building, reforming planning, investing billions in an affordable homes programme, and introducing the Help to Buy, which is helping thousands of aspiring homeowners onto the property ladder.
"All of these measures have delivered over 445,000 new homes in the last four years, putting house building at its highest level since 2007, and planning permission granted for over 216,000 new homes in the last year alone.
"Housing completions are forecast to continue to rise, as is private sector house building. We will be taking some common sense steps to ensure there is no hiatus between our current 170,000 affordable housing programme, and its successor programme, which will build a further 165,000 affordable homes."
The DCLG did not answer IBTimes UK's question as to why it predicts housing starts to fall.