Number of new home builds 'to drop 8% over Brexit uncertainty'
Brexit uncertainty is forecast to intensify England's housing crisis, with the number of new homes being built set to plummet 8% next year on post-referendum jitters.
A new report, commissioned by homelessness charity Shelter and carried out by Capital Economics, claims housebuilding will fall 8% over the 12 months following the EU referendum, due to falling demand.
Capital Economics said 143,000 new homes were built in the year leading up to the Brexit vote, with its analysts now forecasting that only 132,000 will be built in the 12 months to June 2017.
More broadly, economic uncertainty following the vote will mean 66,000 fewer homes are built by 2018. Without further action, the report warns, the target to build one million new homes by 2020 could be missed by 266,000 homes.
"If the current trajectory continues, by 2020 we still won't be building as many homes as before the 2008 crash," Shelter said.
Housebuilding will only start to recover during the second half of 2017, Capital Economics added.
The construction industry will face a number of hurdles, even once growth rebounds, the report explained.
Builders will be restricted in how quickly they can ramp up production after the lull, and labour shortages will also hound the industry.
"The current period of uncertainty could also mean that developers cut back on the number of new projects going into the planning pipeline, thus reducing the number of shovel-ready developments in the first few years of recovery," Capital Economics explained.
New home builds are expected to hit 151,000 in 2018, but that forecast has been lowered from 176,000.
Shelter is now calling on the Government to take advantage of record-low interest rates and create a fund dedicated to new homes and infrastructure, with contracts handed out to small and medium-sized builders.
The Bank of England earlier this month cut the benchmark interest rate to a fresh low of 0.25% as part of a post-Brexit stimulus package.
The charity suggests the scheme could create jobs and affordable homes.
Campbell Robb, chief executive of Shelter, said: "In an uncertain post-Brexit landscape, the new government has a real chance to take the bull by the horns and put in place measures that will not only stimulate housebuilding, but boost the economy too."
In response, a spokesman for the Department for Communities and Local Government said: "The reality is we are getting Britain building again, with almost 900,000 homes delivered since the end of 2009.
"But we know there is more to do. That's why we've doubled the housing budget, including investing £8 billion in an extra 400,000 quality affordable homes to rent and buy."