Newbuild drives market forward

Newbuild drives market forward

Analysis from Hometrack shows that over the last three years prices for new build houses have not only outperformed re-sale prices, but pricing for new build flats too

In London new build house prices rose by 47% over a three year period, while re-sale house prices rose by just 25%.  Across all regions of England, new build houses outperformed re-sale homes.

In contrast, prices for new build flats, compared to re-sale flats over the same time period were lower - in London prices for new build flats rose by 11% over a three year period, compared to re-sale flats which rose by 19% over the same period.  The only exception was in the South of England where prices of new build flats were 6% higher than for re-sale.

Richard Donnell, Hometrack’s Director of Research said:

“The analysis highlights how the market has supported the strategy of developers who have adapted their product mix to meet demand.  By moving away from first time buyer/investor flats to family houses, developers have targeted those looking to buy homes with embedded equity, primarily in the south of England.  Together with land write-downs and the purchase of discounted land in the early part of the downturn, higher prices have supported the growth in the profitability of housing schemes.”

Looking ahead low turnover remains a positive for developers who provide liquidity into the market by plugging gaps in supply and tapping into latent demand for housing.  However, affordability constraints will ultimately put a ceiling on near term house price growth, even in the relatively affluent areas of the south of England where large parts of the two to three bed housing market are only accessible to households with earnings which fall into the top 30% of income distribution.

Donnell again:

“If developers are to continue to react to market forces they need to look to new areas for growth in terms of location and target markets.  Broadening the product mix is a key to supporting sales rates.  However market rent and affordable housing tenures deliver lower capital values than housing for sale. The key to success is swapping tenures as part of the re-negotiation of planning permission for schemes with marginal viability.  There is plenty of demand for new housing in the UK the question is what product at what price.”


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Tom Allen
Tom Allen 20 Sep 2017

Absolutely agree with you!

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RyanGeo
RyanGeo 18 Sep 2017

A sharp correction would be a less dramatic expression to use. That is already underway in certain sectors in Reading where I practice as Chartered Surveyor

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sean benton
sean benton 01 Sep 2017

Identity theft is a thread for any profession. So,people should stay alarmed. I once take help from a letting agent and came to know that letting agents are taking every precaution to prevent fraudulent...

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Mark N.
Mark N. 30 Aug 2017

We have seen a surge in instructions over August and that should continue into September too.

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Chris
Chris 30 Aug 2017

Unfortunately, all the legislation bears its force on Landlords and ignores, naively, the effect of Rogue Tenants on the ability of landlords to keep houses in repair and offer properties for rent at reasonable...

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Christian Donovan
Christian Donovan 18 Aug 2017

The write-down on house values, combined with the fall in the GBP saddled the fund?s property portfolio with a 1.4% loss in the second quarter. The shocking amount of $240 million.

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Samantha Goodman
Samantha Goodman 11 Aug 2017

Interesting point of view.

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Samantha Goodman
Samantha Goodman 11 Aug 2017

It depends on the people, some older adults decide to make a long-distance move in order to live closer to their children or settle in a place with a lower cost of living.

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brandonlee10
brandonlee10 24 Jul 2017

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IrisJ.
IrisJ. 19 Jul 2017

Great advice, but may I also add that when buying an already built home, make sure you do all of the proper inspections. Most importantly pest inspection because people tend to get surprised when they

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IrisJ.
IrisJ. 17 Jul 2017

The third point is, in my opinion, the most important one. People have become too inconsiderate and careless when it comes to rented properties. If a landlord wants to protect their property, regular visits...

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cornishalan
cornishalan 10 Jul 2017

Added to the cost of purchasing these village properties are the above average maintenance costs. Particularly where the property is a listed building or requires specialist building skills such as thatching...

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