Assetz Capital chief executive Stuart Law has identified Wales and the North of England as two key regions where new homes are needed to meet demand.
The peer-to-peer lending platform boss highlighted the “vital role” that housebuilders will play in preventing the housing market overheating, amid soaring price growth this year.
“If we are able to meet the government’s target of building 300,000 news homes per year, this supply will better match the heightened levels of demand that we are currently seeing and help stabilise prices,” Law said.
“Small- and medium-sized enterprise housebuilders in particular, with their expert local knowledge and ability to adopt innovative housebuilding processes at speed, are key to delivering this target and supplying much-needed housing stock in line with post-pandemic trends.
“Wales and the North of England in particular are seeing significant house price growth at present, making these two key regions where new homes coming to market could really make a difference to local communities.
“We have already received hundreds of millions of pounds worth of loan applications from housebuilders looking to leverage this opportunity and help meet the nation’s housing needs moving forward, ultimately providing the solution to achieving positive, sustainable house price growth for all over the long-term.”
His comments come as the latest Halifax house price index showed 7.6 per cent annual growth in July. This was a slowdown from June’s 8.7 per cent but Law said this was likely to be a temporary blip in an upward trajectory.
He predicted that prices will rise by eight to 10 per cent this year and next, which could lead to “an overheating of the market” and price out first time buyers.
“The slight slowdown in annual house price growth compared to the astronomical rates seen earlier in the year is no surprise following the current tapering of the stamp duty holiday and given the strength of the market last summer,” he said.
“However, we don’t expect this deceleration to last terribly long with other factors likely push growth rates back up over the remainder of the year and into the longer term.
“While house price growth is positive for homeowners and the wider economy, it is a never-ending battle trying to keep growth within the ideal range of two to three per cent so as not to widen the affordability gap for first time buyers.”