Lack of new homes "a major concern"

The Royal Institution of Chartered Surveyors (Rics) has voiced its concerns about the lack of new homes being built.

New housing starts for this year are unlikely to be much greater than 110,000, while Rics is forecasting that output will reach record low levels next year.

Rics believes new starts will easily fall below the 80,00 mark – much below that recorded during the last recession in the 1990s – and far below the government's target for building two million new homes by 2016.

Commenting, Rics chief economist Simon Rubinsohn said: "A major concern is the massive reduction in the number of new homes now being built."

He adds that the there is a "very real risk that a serious housing shortage will fuel another bout of volatility once the current crisis eases".

The lack of new homes could see more people decide to buy their own plots from distressed developers in order to embark on a self build project as Rics adds that the policies are not yet in place to create a "vibrant but sustainable housing market in the future".