The number of new homes in England jumped by 25% in 2014-15, the biggest increase in 28 years, official figures show.
Changes to planning laws helped boost the number of homes created through a change of use, but the biggest factor was a rise in the number of new-build properties completed during the year.
A total of 170,690 homes were added to the country’s housing stock, once demolitions were taken into account, figures from the Department for Communities and Local Government (DCLG) showed, of which 155,080 were new-build properties.
Temporary rules allowing office buildings to be converted to residential use without planning permission or the need for developers to provide affordable housing boosted the number of homes created through a change of use by 65%, to 20,650.
A further 4,950 homes came from conversions, and the remaining 630 were classed as “other”.
The number of new homes is below the 240,000 a year that many experts say is needed to keep up with demand and control house prices rises, and down on the 182,770 added as the downturn started to bite in 2008/09.
As the credit crunch hit, developers started to mothball projects, and by 2012/13 the supply of new homes fell to just 124,720. The launch of the first part of Help to Buy incentivised buyers of new-build homes, and was one of several government schemes to support builders.
The housing minister, Brandon Lewis, said: “We’ve brought the housebuilding industry back from the brink, giving them the tools they need to get on with the job and build the homes hard-working people need.
“That includes making it easier for developers to turn underused buildings into new homes, with today’s figures showing a 65% increase in these kinds of developments over the past year.”
Ed Mead, director of estate agency Douglas & Gordon in west London, said that about a quarter of the new homes he was selling were a result of the permitted development rights allowing the change from offices.
Johnny Morris, research director at property firm Countrywide, said many lower value office blocks had been converted to flats, “with plenty more in the pipeline”.
He added: “Many of the conversions have caused a split in opinion. Converted buildings so far have tended to deliver smaller/cheaper flats and there have been concerns over the quality of living space. But on the flip side, a lower price means they’re more affordable than the equivalent new-build home, so have proved popular with buyers, particularly in the capital.”
The government recently announced it was extending the permitted development right, which Morris said was likely to lead to high numbers in future years.
But Brian Murphy, head of lending at broker Mortgage Advice Bureau, said: “The market is by no means out of the danger zone just yet. The number of housing completions is still far below the amount needed – net supply of dwellings remains 24% below the levels seen in 2007-08 – and we are seeing too many homebuyers chasing a single property.
“Across the UK there is an ever-growing gap between supply and demand, threatening to drive up house prices and derail affordability. The government must act on its promise to increase housing supply, not only through additional policies like the Starter Homes Scheme, but also by ensuring net supply of housing continues to grow at a strong rate.”
Separate figures, also from DCLG, showed the number of homes sold through right to buy increased by 5% in 2014/15, to reach 16,519. Of these, 12,489 were sold by local authorities, at an average discount to market value of 46%, or £65,140. The remainder were sold by registered private providers, at a 52% discount, worth an average of £54,920.
