Housing Supply Struggles: Barratt’s Warning for the Industry and Government

Introduction

The UK’s housing market is facing a significant challenge as a major housebuilder, Barratt, expects to build fewer homes in the next year than it did in the past. This news highlights the difficulties that the industry and government are experiencing in increasing the supply of housing. In this article, we’ll explore the reasons behind Barratt’s predictions and what it means for the future of the housing market.

Barratt’s Completions Forecast

Barratt, one of the UK’s largest housebuilders, has announced that it expects to complete between 13,000 and 13,500 homes in the year to June 2025. This is a decline of 3 to 7% compared to the 12 months to June. According to the company, this decline is due to having fewer sales outlets, which is a result of lower land buying activity in 2022 and 2023.

Government’s Efforts to Boost Housing Supply

The UK government has recently announced plans to increase housing supply, particularly through its "Get Britain Building Again" policy. This policy aims to streamline the planning process, increase the number of homes built, and make homeownership more affordable. However, Barratt’s forecast suggests that the industry is facing significant challenges in achieving these goals.

Industry Challenges

The housing industry is experiencing a period of low buyer demand due to higher mortgage rates. This has resulted in private developers struggling to sell homes and maintain profitability. Additionally, the supply of land for development is limited, making it difficult for builders to increase production. Barratt’s forecast is a worrying sign that the industry may not be able to recover quickly from these challenges.

The Impact on the Government

Barratt’s forecast is a warning to the government that its efforts to boost housing supply may not be as effective as expected. The government’s plans rely heavily on the private sector to increase housing supply, but if builders are struggling to deliver, the government’s targets may be difficult to achieve. This could lead to further delays and frustration for those waiting to get onto the housing ladder.

Conclusion

Barratt’s forecast highlights the significant challenges facing the housing industry and government. The industry is struggling to increase supply due to low buyer demand, limited land availability, and profitability issues. The government’s efforts to boost supply may not be enough to overcome these challenges, and further action may be needed to address the housing crisis.

Frequently Asked Questions

Q: What does Barratt’s forecast mean for the housing market?

A: Barratt’s forecast suggests that the housing market will experience a decline in housing supply, which could lead to further delays and frustration for those waiting to get onto the housing ladder.

Q: What are the main challenges facing the housing industry?

A: The main challenges facing the housing industry include low buyer demand due to higher mortgage rates, limited land availability, and profitability issues for private developers.

Q: What can the government do to address the housing crisis?

A: The government can consider implementing measures such as increasing the supply of affordable housing, reducing bureaucracy in the planning process, and providing incentives for developers to build more homes.

Q: How will the government’s "Get Britain Building Again" policy impact the housing market?

A: The government’s policy aims to streamline the planning process, increase the number of homes built, and make homeownership more affordable. However, Barratt’s forecast suggests that the industry may face significant challenges in achieving these goals.

Q: What can individuals do to increase their chances of getting onto the housing ladder?

A: Individuals can consider taking steps such as saving for a deposit, improving their credit score, and exploring alternative forms of housing, such as shared ownership or renting.

Author: www.ft.com

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