England's housing crisis: Housebuilding stifled by land and skills shortages

An increase in housebuilding is unsustainable because of land and skills shortages, according to a survey of construction firms, an ominous sign that the country's housing crisis may get worse before it gets better.

A survey of owners and directors of 389 housebuilders across England by property consultants McBains Cooper revealed 48% increased their output over the past year. But 34% said they are held back by a lack of available land and 27% blamed a construction skills shortage.

House prices in England are rising fast because of a constrained housing supply, particularly in London and the South East. The average house price in England reached £298,000 in February 2016 after rising 8.2% over the year, said the Office for National Statistics (ONS).

"The finding that around half of housebuilders increased output over the last year is encouraging, but this survey shows many are sceptical about whether this growth is sustainable," said Michael Thirkettle, chief executive of McBains Cooper. "The government will need to support builders in order for growth to continue by making sure there's enough land to build on and by helping address skills shortages that threaten to stifle growth."

Figures from the Department for Communities and Local Government (DCLG) show there were 42,890 housing completions in the 12 months to December 2015, a 21% annual increase. There were 143,560 new housing starts, a 6% rise year-on-year. Estimates on housing need vary between 200,000 and 300,000 new units a year, meaning housebuilding is already running well short of demand.

"Around 300,000 people left the construction industry between 2008 and 2010, and because training and apprenticeships take time, the government should allow skilled construction workers to be listed as an occupation with official shortages," Thirkettle said. "This would allow more recruitment from outside the EU, which is not currently possible under our immigration system, and help kick-start the housebuilding programme."