U.K. Homebuilding Approvals Jump as Mortgage Market RevivesNeil Callanan
Homes approved for construction in the U.K. rose 49 percent in the second quarter as government assistance boosted mortgage lending and building permits became easier to get.
Approvals climbed to 37,000 from the same period a year earlier, the Home Builders Federation said in a statement today. The total for the 12 months through June reached 156,608, a 34 percent increase from the lowest year-long period, which ended in September 2011.
The gain “reflects house builders’ increasing confidence in the market and also the positive principles of the new planning system,” Stewart Baseley, executive chairman of the industry group, said in the statement. “With Help to Buy forging ahead strongly and developers looking to increase output, we need to see the increase sustained.”
U.K. house prices climbed for the seventh month in August and will probably continue to increase through the rest of the year, according to a report by Halifax, the mortgage unit of Lloyds Banking Group Plc. Home values increased 0.4 percent from the previous month to an average 170,231 pounds ($272,676), Halifax said. Prices gained 6.2 percent from a year earlier.
The Bank of England’s Funding for Lending Scheme has helped lower mortgage costs while Chancellor of the Exchequer George Osborne’s Help to Buy program allows a home purchase with a deposit of as little as 5 percent of the property’s value. U.K. lawmakers also made it easier last year for home builders to appeal when boroughs voted against approval of housing projects.
Approval rates remain substantially below the 220,000 a year needed to meet the demands of a growing U.K. population, the HBF said. “Onerous” conditions set by local authorities on planning approvals continue to delay construction, the group said.
Buyers have reserved 12,500 homes for purchase through Help to Buy in the five months since the program was introduced in March, the HBF said.