Undersupply of homes 'hindering first-time buyers'

27-May-2008

An undersupply of new homes has contributed to first-time buyers' struggle to get on the first rung of the housing ladder.

That is the conclusion of the Federation of Master Builders, whose representatives pointed out that some developers have cancelled projects in the wake of credit squeeze-induced mortgage difficulties.

"Britain has experienced a growing demand for more housing at a time when there has been an undersupply of new homes for many years," remarked Brian Berry, director of external affairs at the organisation.

"Now the credit crunch has made lending much more difficult, with the result that the recent upturn in house building has stopped as house buyers find it much more difficult to obtain a mortgage."

A spokesperson for Barratt Developments recently speculated that builders will not hit the government's goal of 240,000 new homes per year by 2016 as developers have put volume house-building on hold while they wait for the economy to improve.

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