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With the introduction of, what the Chancellor claims, is ‘the biggest affordable house building programme since the 1970’s, following his recent Autumn Statement, developers will begin the new year on a high’ with the prospect of even greater new build opportunities to come. And yet, while the news is good for the market, Shaun Peart, Managing Director of LSL Land & New Homes, questions what more could be done to help the market?
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With the introduction of, what the Chancellor claims, is ‘the
biggest affordable house building programme since the 1970’s,
following his recent Autumn Statement, developers will begin
the new year on a high’ with the prospect of even greater new
build opportunities to come. And yet, while the news is good for
the market, Shaun Peart, Managing Director of LSL Land & New
Homes, questions what more could be done to help the market?.
“There’s no doubt that the new build market is doing well - as
figures from our LSL Land & New Homes Index highlight. Up
to the year ending November 2015, for example, there was an
average 5.9% increase in new build property prices compared to
November 2014 and, whilst slightly down on the 6.7% increase
recorded for the period November 2013 to November 2014, it’s
clear that London played its part in this with year on year price
growth of 16.5% recorded compared to just 8.5% in the last year.
At the moment the three best performing regions of East
Anglia, East Midlands and the South East - adjoining Greater
London - all show year on year growth of around 2% over
last year’s figure and Greater London’s lead position could,
as the table shows, soon be taken over by East Anglia.
And, as our graph highlights, it’s these ‘southern regions’ that
contribute to the overall result and which, when compared
to ‘northern regions’ are performing at a different level.
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Data sources: LSL New Build House Price Index | ONS, EARN05 – Average weekly gross earnings of full time employees, by region.
LSL New Build IndexThe market indicator for New Builds December 2015
Regions Yr to Nov 15 Yr to Nov 14
East Anglia 8.2% 6.5%
East Midlands 5.8% 4.2%
Greater London 8.5% 16.5%
North East 0.5% 2.8%
North West 3.6% 2.9%
Scotland 2.3% 3.2%
South East 7.6% 5.5%
South West 4.6% 4.9%
Wales 1.2% 2.5%
West Midlands 4.2% 4.6%
Yorkshire and the Humber 1.9% 1.5%
Average excluding GL 4.0% 3.8%
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Looking at First Time Buyers, in particular, our HPE Index
shows, this month, that to buy a 70 sq. m 2 bed home,
on average, (when comparing the average earnings of a
full time employee) would be 5 years and 4 month’s but
there are wide regional variations in this figure.
A new starter home on an average salary, for example, is most
affordable in the North East and Yorkshire & the Humber. However
house price growth is still pretty slow in the regions, whereas
the North West and East Midlands are showing reasonably
strong house price growth and good levels of affordability.
So, as the new year arrives the market appears to be in a good
position and, with the green light given to free up funds to
build more, it appears to be good news for the industry but we
must remember that to succeed we need the land, the labour
and a reduction in the ‘red tape’ to make this work. This won’t
be an overnight success and looking at ways to improve these
areas, making it easier to build, and perhaps supporting SME’s
more, should be on the agenda next time – if not, while the
recent news made good headlines, it’s the progress that’s
made in house building that will lead the story next year.’
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Average New Home Prices
*Size adjusted average price
Period December 2014 to November 2015 and % variation over same period 2013/14.
SCOTLAND £ AVERAGE %+/-
£262,955 2.3% ↑
£138,003 0.9% ↑
£164,371 0.6% ↑
£188,282 6.4% ↑
NORTH EAST £ AVERAGE %+/-
£259,668 2.4% ↑
£104,157 -4.2% ↓
£156,282 -0.2% ↓
£143,034 0.3% ↑
NORTH WEST £ AVERAGE %+/-
£295,099 5.2% ↑
£127,987 2.1% ↑
£169,615 1.7% ↑
£163,008 5.2% ↑
YORKSHIRE & THE HUMBER £ AVERAGE %+/-
£274,655 4.6% ↑
£115,585 -1.8% ↓
£156,059 2.3% ↑
£149,281 0.8% ↑
WEST MIDLANDS £ AVERAGE %+/-
£315,055 3.0% ↑
£138,366 7.8% ↑
£196,307 5.0% ↑
£182,490 1.8% ↑
EAST MIDLANDS £ AVERAGE %+/-
£285,426 6.1% ↑
£109,918 5.4% ↑
£171,556 3.4% ↑
£165,598 7.6% ↑
-4.2%
WALES £ AVERAGE %+/-
£242,235 -0.4% ↓
£138,762 4.0% ↑
£164,301 2.7% ↑
£163,261 1.3% ↑
EAST ANGLIA £ AVERAGE %+/-
£392,242 13.2% ↑
£203,996 6.7% ↑
£253,129 7.3% ↑
£250,964 6.1% ↑
SOUTH WEST £ AVERAGE %+/-
£344,208 3.0% ↑
£171,969 7.2% ↑
£219,795 3.3% ↑
£214,698 4.4% ↑
GREATER LONDON £ AVERAGE %+/-
£687,519 10.0% ↑
£398,697 9.1% ↑
£487,251 9.7% ↑
£461,884 -1.1% ↓
SOUTH EAST £ AVERAGE %+/-
£471,365 6.5% ↑
£208,210 8.5% ↑
£305,485 7.7% ↑
£282,719 6.9% ↑
Detached
Flats
Semis
Terrace
13.2%
LARGEST % DECREASENORTH EAST
EAST ANGLIALARGEST % INCREASE
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This Index has been prepared by e.surv using anonymised data
based on a proportion of all new build valuations provided for lending
purposes. Figures represent 12 month rolling averages for each
period. The copyright and all other intellectual property rights in the
Index belong to e.surv. Reproduction in whole or part is not permitted
unless an acknowledgement to e.surv as the source is included. No
modification is permitted without e.surv’s prior written consent.
Whilst care is taken in the compilation of the Index no representation
or assurances are made as to its accuracy or completeness. e.surv
reserves the right to vary the methodology and to edit or discontinue
the Index in whole or in part at anytime.
e.surv (www.esurv.co.uk) is the Valuation business of LSL Property
Services plc (www.lslps.co.uk) and is the UK’s largest residential
valuation practice, acting for lenders, developers, Social Housing
organisations and other stakeholders in the residential property
market.
The business employs circa 450 chartered surveyors and covers the
entire UK.
LSL Land & New Homes is a trading style for members of the LSL
Property Services Group Estate Agency Division, one of the leading
residential property services groups in the UK. It’s strategy is to create
partnerships with developers and builders to support their objectives
and add value to their businesses.
It can provide integrated solutions for their benefit drawing on the
expertise of companies who are also under the LSL Group umbrella
including valuation services (e.surv), rental portfolio services, asset
management services and estate agency services fronted by well-
known high street estate agency brands like Your Move and Reeds
Rains. Services can be tailored to suite individual needs from bespoke
site sales and marketing, agency referral to the disposal of part
exchange, assisted schemes and new build stock, land sales and
acquisitions.
Data for the LSL New Build Database is collected off the web sites of over 300 house builders on a rolling quarterly basis so giving a rough timeline of when sites start and finish and how many units have been built.
PLEASE NOTE: The majority of new build market activity data is quite historic, being based on returns made via the NHBC or Local Authority completions data. The LSL New Build Database tracks the new build activity of over 300 leading house builders with data collected from their websites on a rolling quarterly basis so giving a rough time line when sites start and finish and how many units have been built.
Disclaimer: The data is provided by LSL Land & New Homes and is based on data provided as described above. While reasonable skill and care has been taken in the preparation of the data – the copyright and all other intellectual property rights of which belong to e.surv limited - neither e.surv Limited nor LSL Land & New Homes can accept liability for the accuracy or completeness of the data provided.
Reproduction in whole or part is not permitted unless an acknowledgment to e.surv Limited is included. No modification is permitted without e.surv Limited’s prior written consent.
No warranty of the figures is given and no responsibility or liability of any nature to you or any third party for the whole or any part of its content is accepted. It is assumed that you will carry out your own due diligence before proceeding with any proposals or making any financial commitments.
For further information or enquiries regarding the underlying data of the
LSL New Build Index, please contact Richard Sexton via email
[email protected] or by phoning 07968 932118.
For further information about the LSL Property Services Group including
LSL Land & New Homes and e.surv, visit www.lslps.co.uk
Notes