BRITAIN’S house supply crisis will get worse without stronger Government intervention, a leading expert has warned.

Reports last week revealed growth in the UK construction industry slowed to a crawl last month with high borrowing costs eroding demand for building work.

Confidence among builders is now at its lowest level since the depths of the first lockdown in May 2020, with more than a quarter of the 150 construction companies surveyed predicting that business activity would fall over the next year.

Commenting, Jonathan Rolande, of the National Association of Property Buyers, said: “The confidence of housebuilders is low – and it’s hardly surprising. There is a real possibility that property prices will shrink significantly in 2023, borrowing costs have rocketed and there are still logistical problems with labour and materials. None of this bodes well for housing and there is a risk the supply crisis will deepen in 2023.

“Supply of newly built and converted property has not kept up with demand for many years now. Whilst a certain amount of blame can be attributed to the planning process – there are brownfield sites for 1m homes yet to be built – we must also look at the system itself.

“Government figures show we need at least 300,000 new properties a year. This keeps up with demand, but does little to massively increase stock in order to suppress sky high prices. But the stark reality is that even this relatively conservative figure has not been met. Whilst the government argues about whether to impose ‘top down’ targets on councils or not, the real stumbling block appears not to have been seen – and that’s addressing planning laws which hold us back from boosting supply.”

Revealing why many builders are currently reluctant to build Mr Rolande continued: “Construction companies are fearful of the market. Instead of building property that may not sell, they will sensibly choose to build only the sites that have a more or less guaranteed return. Who can blame them? As inflation gets back under some control and labour is freed up from elsewhere due to the economic contraction, costs will reduce and the situation will begin to return to normality.

“But we should not expect a sufficient number of new homes to be built if the profit margin simply isn’t there. With all of the other issues facing the country, this isn’t the worst if it returns quickly. But if there is a drop in values and worse still, a slump in transactions for a long period we will be faced with an even more acute housing emergency in the coming years.

“But then the question will be about who fills the gap left by housebuilders waiting for the market to recover.