Top economist forecasts housebuilding boom

Peter Hill, chief executive of the Leeds Building Society
Peter Hill, chief executive of the Leeds Building Society
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A LEADING economist has forecast a boom in housebuilding and urged politicians and regulators against an overly aggressive intervention into the housing market.

Speaking at the Building Societies Association conference in Manchester, Douglas McWilliams, executive chairman of the Centre for Economic and Business Research, said that the number of completions could rise from 170,000 a year now to 400,000 a year by the end of the decade.

He dismissed warnings by the OECD about “excessive” house prices in the UK, claimed that housing supply will start to catch up with demand and said prices will start to cool.

“We are in the gap between demand going up and the supply response,” said Mr McWilliams, a former chief economist at the CBI, who said policymakers and regulators should not “throw baby out with the bath water”.

Peter Hill, chief executive of Leeds Building Society, said that the lack of skills in the workforce presents the main challenge to the construction sector.

He said the Government needs to come up with a long term and sustainable housing strategy.

“What I’m looking for is a properly articulated housing strategy. We need a clear view of what private sector builders can deliver, based on the availability of land, their capital and skills.

“There is more to do on planning reforms... There is a need to release more land from local authorities. There is a skills issue.”

He called for Government action now, without which the UK will struggle to build 200,000 new homes a year, let along 400,000.

Paul Broadhead, head of mortgage policy at the BSA, told The Yorkshire Post that house prices are still below peak “but there is no room for complacency”.

He said successive governments have looked at housing policy in isolation and have not had an overarching strategy.

“If we are serious about solving the challenges we have got in our housing market we need to have a housing minister at the centre of Government who looks after the whole strategy and how this is implemented across departments.”