New Homes Commentary September 2010
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The new homes market continues to perform 'OK' for now. Especially considering the harsh mortgage environment they are operating in and the 'doom and gloom' from the media.
However, it looks like they have learnt their lessons from the past few years as the new supply of property is slowing dramatically and new government policy is hampering planning for new developments, which will shorten stock further.
According to the Smart New Homes Index, the industry has reduced it's volume production by 60%, probably due to the forecasted 'slow down' in the market. On top of this, they claim "Some estimates suggest plans for over 100,000 new homes have been put on ice since the coalition took power because of confusion over planning policy" and "The industry is desperate for a coherent and workable policy framework to allow construction to progress, but it appears the wait is set to go on for some time to come.”
Not all properties are doing OK though, town house prices are down by 10% year on year. Any price growth appears to be down to semi detached (up 8.5%) and apartments (up by 5.3%), while detached are staying pretty much the same. Month by month though, a better indicator for what is happening to prices 'now' shows no real changes over the last few months.
So if property stock is kept to the bare minimum by the developers and government policy doesn't deliver the 'de-regulation' promised by the Housing Minister, Grant Shapps at the last developers conference, this government could, inadvertantly end up causing another housing boom when the economy recovers due to a shortage of stock!
READ MORE on SEPTEMBER'S REGIONAL PERFORMANCE
READ MORE on the impact of the Coalitions' policy on new build development.
Contact the Designs on Property team if you have a new home or property question by emailing email@example.com or tel 0845 838 1763.