Tag Archives: development
New housing developments do not impact on surrounding house prices
A new study has shown that new house building in the UK has little discernible and consistent impact on local house price patterns. The report by LSE London at the London School of Economics and Political Science and jointly commissioned by Barratt Developments, the largest house builder in the UK, and the NHBC Foundation, examined whether a new development will always reduce prices or reduce the rate of increase in prices in the immediately surrounding area. Examining the impacts of eight recent residential Barratt developments on their local areas, the research concluded that prices did not decline as a result of development, although sometimes there may be some limited impact during construction. Once the developments were completed, the local areas generally moved with the market. One of the most common concerns of home owners across the UK is that a new build residential development nearby will reduce property values in the local area. For many people their new home is their largest single investment. The selected sites all involved fewer than 300 units and were substantially completed within the last five years. Spread across the South and Midlands these sites are typical of housing development outside city centres or wholly rural areas. The aim was to exemplify ‘ordinary’ developments mainly on sites where there had been objections, some significant, at planning permission stage prior to development. Five sites were built on land with previously higher amenity value, and three were built on land that previously had lower amenity value including derelict industrial land. Specifically, the research found that house price changes in the surrounding streets and the broader three or four digit postcode districts suggest that new developments may stabilise or even increase prices in the immediate areas once development is complete where the market is generally stable and rising. They also suggest that there is almost no evidence of Longer term negative impacts. For sites where a high level of opposition was experienced throughout the planning and construction processes, this opposition tended to decrease once the development is completed. In one case where there were high levels of opposition, at least half of all eventual purchasers of the new homes previously lived within five miles of the development. ‘Few would argue that the UK needs to build substantially more homes to avoid a housing crisis, but despite this, local opposition remains one of the main obstacles to achieving this,’ said Neil Smith, head of research and innovation at NHBC. ‘It is understandable that home owners will be anxious to protect their investment in their homes, and concerns about the negative effects of new developments have compounded the issue,’ he explained. ‘While there are clearly a number of factors affecting property values in specific areas, this research challenges the assumption that new build developments will adversely affect local house prices,’ he added. Philip Barnes, group land and planning director at Barratt Developments Plc, acknowledged that one of the understandable fears of new development is that… Continue reading
Four new housing zones for London to add 12,000 new homes
The Mayor of London has announced a further four Housing Zones across London, accelerating efforts to deliver the new housing that the rapidly expanding city needs. The new zones in the boroughs of Havering, Enfield, Redbridge and Tower Hamlets will together deliver over 12,000 new homes, nearly 3,500 of which will be affordable housing. This will bring the number of Housing Zones announced to 15 with a total of 45,109 homes created, 14,055 of them affordable. A total of £162 million in funding will be contributed by the Mayor to the new Housing Zones as are a collaborative effort between the Greater London Authority, the government and local boroughs to streamline approval processes and fast track development in areas where it may not otherwise happen. Included in the new Housing Zones will be two brand new rail stations, a large new park, new primary schools, and new retail and entertainment precincts. They will revitalise currently disused brownfield sites and turn them into neighbourhoods where Londoners will work, live and visit. ‘Housing Zones will provide the swift delivery of new homes for Londoners that is so desperately needed and create entirely new, highly connected urban districts for generations to come,’ said the Mayor of London Boris Johnson. ‘By freeing up empty brownfield sites from lengthy approval processes and providing a funding boost, we can ensure new housing capacity is created in areas where it might never otherwise have happened,’ he explained, adding that the four new zones brings the project within touching distance of the 50,000 new homes target. Rainham and Beam Park Housing Zone in the borough of Havering is one of the biggest development sites at 12 square kilometres, and will include the new Beam Park rail station with 20 minute access into the heart of London. The Housing Zone will include the Beam Park site recently released by the Mayor for development, the largest slab of land that had been in the Mayor's portfolio. The council plans on creating a new garden suburb from former industrial land with 3,457 new homes, 941 of them affordable. ‘This is incredibly exciting news for the residents in Rainham, and the Borough as a whole. The changes this funding will allow us to implement will have a lasting positive impact on their lives,’ said Havering council leader Roger Ramsey. Meridian Water Housing Zone in the borough of Enfield will build 3,650 new homes in a development designed to complement the riverside canal district it is situated on, of which 1,460 be affordable. The Housing Zone will contribute to the development of Meridian Water station, currently Angel Road station, which will have four trains an hour running into central London by March 2018 under the Stratford to Angel Road rail scheme. In early June a procurement process was launched to secure a master developer for the project. The Ilford Town Centre Housing Zone in the borough of Redbridge will capitalise on the arrival of Crossrail to the area by… Continue reading
Barriers to expansion need to be removed to boost UK house building
Private house builders in the UK could potentially start building 150,000 new homes in England by 2020 if barriers to expansion like finance are removed, new research shows. Private house builders currently build the majority of new homes in the country and the largest have the capacity to increase output through measured and planned expansion, according to the analysis from real estate firm Savills. The operating margins of major house builders are only just returning to their target, the report says and suggests that better finance availability would allow the medium sized, often regional, house builders to expand. But smaller house builders are not expected to recover back to their former levels but will be able to expand output via niche opportunities and through custom and self build. The data from the report shows that private house building levels have been increasing over the last six years since the economic downturn. Not only are house builders increasing their output to meet demand, they built approximately 45% of all new affordable homes last year. The majority of new homes, 54%, are being built by the 11 largest house builders, that is those building over 2,000 homes a year, and levels of starts have recovered to 20% below their 2007 peak. One third of new homes are being built by medium sized house builders, those who complete 100 to 2,000 homes a year, who are back to the levels of building in 2007. The group that has struggled the most since the downturn are smaller house builders. Although some have expanded to produce more than 100 homes per year to become medium sized, others have stopped registering new homes altogether contributing to a 10% decline in registered house builders in 2014 compared to 2013. The report explains that the government’s Help to Buy Equity Loan and NewBuy schemes supported 30,146 sales of new homes in England in the year to March 2015 and among many of the largest house builders an average of 32% of sales are supported by Help to Buy. ‘We estimate Help to Buy will support 30,000 new home sales per year and our estimate of potential delivery of homes by the private sector up to 2020 relies on its continuation. If Help to Buy comes to an end after its current funding expires in 2020, we are likely to see start volumes tapering off up to two years before the end of the scheme in anticipation,’ the report says. It points out that access to funding is easing for SME house builders and competition among lenders means that the range of choice continues to grow. According to SPF Private Clients, a financial services broker, there are currently 45 different borrowing options available to SME builders. This is in sharp contrast to the very restricted market following the downturn. Big banks which previously preferred to focus on major house builders are now prepared to advance in the region of 60% of the cost of… Continue reading
