David Fell, lead analyst at Hamptons, believes there is a long way to go before ambitious long-term housing targets can be met despite official Government figures showing growth in new housing development.
He said: “While construction has started on more new homes than at the same time last year, the latest figures suggest that fewer than one million homes will be built this parliament.
“Housebuilders remain extremely cautious in the current environment. While planning reforms have generally been welcomed, the sales market remains challenging.
“Even with strong underlying demand for housing, high borrowing costs are forcing many potential buyers to remain on the sidelines.
“These rising mortgage bills are translating into slowing sales rates, with developers cutting back on new land purchases to conserve cash.
“In response, developers are leaning heavily on incentives, such as mortgage rate subsidies and deposit contributions, to maintain buyer interest. However, these can only offer a temporary buffer against broader market pressures.
“Until mortgage rates drop back and buyer affordability improves, overall build volumes will likely stay subdued.
“Without additional policy interventions to stimulate demand, achieving ambitious long-term housing targets will remain an uphill struggle.”
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