It’s no doubt that the Spending Review has brought even

more positive news for the house building industry - with new

Schemes and Initiatives announced that will help even more

people realise their dreams of home ownership but what about

current new build prices? Shaun Peart, Managing Director

for LSL Land & New Homes comments: “In some parts of the

country prices are lower than they were at the height of the

previous cycle, around the mid 2000’s, whilst some prime

London Boroughs have seen close to a doubling of prices

since the last downturn. And whilst wages are now growing

in real terms, this follows a long period of economic instability

with big question marks arising about the potential effect on

mortgaged households of even a slight increase in the base rate.

In terms of Year on Year house prices for new builds, the

overall price index remains relatively static at 6.1%, which

is slightly down on last Octobers figure of 6.4%, and last

month’s figure of 6.5%. – as the graph opposite illustrates.

As can be seen from the graph overleaf East Anglia and Greater

London are converging, with the prospect of East Anglia taking

the lead as the highest price growth region, by the New Year.

In the year to October 2014 Greater London was seeing Year

on Year price growth of 15.4% and over the past year this has

steadily declined to stand at 9.4%. So the overall reality in

Greater London appears to be a market that is close to flat with

each month of low or zero growth pulling the annual figure a

little bit lower. But much of the price growth in recent years in

Greater London has occurred close to the centre where prices

are highest and this slowing of price growth could simply be

reflecting a move to lower priced areas along the transport lines.

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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 November 2015

Regions Yr to Oct 15 Yr to Oct 14

East Anglia 8.7% 4.9%

East Midlands 5.2% 4.5%

Greater London 9.4% 15.4%

North East 1.3% 1.7%

North West 3.6% 3.5%

Scotland 2.1% 2.9%

South East 7.5% 5.4%

South West 3.7% 5.3%

Wales 1.9% 2.4%

West Midlands 4.8% 4.4%

Yorkshire and the Humber 2.0% 1.8%

Average excluding GL 4.1% 3.7%

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What is certain though is that the

three regions adjoining Greater

London are now seeing the

strongest increases in price growth.

East Anglia, the East Midlands

and the South East are the three

healthiest looking regions in terms

of house price inflation and the

market wave effect now seems to

have rolled out to those regions.

Other regions are showing less

drive, but despite this the average

price growth, excluding Greater

London is 4.1% this year which is

up on last year’s figure of 3.7%.

Considering First Time Buyers, our HPE Index looks at the

average cost of buying a 70 sq m 2 bed home in each region.

It compares this with the average earnings of a full time

employee in that region. On average a 70 sq m home costs

the equivalent of 5 years and 4 month’s gross earnings.

But there is a wide regional variation in this figure.

Our figures suggest that in Greater London you would need to

be paying 11 years and 3 months Gross Earnings (before tax and

other deductions are made) to buy your starter home. So this will

translate into a large mortgage being paid off over a long period

of time. If however you lived in the East Midlands, you would

be paying Gross Earnings worth 3 years and 10 months to buy

your starter home. This of course translates into a far smaller

mortgage which can be paid off relatively easily by someone on

average earnings. The relative affordability within areas such as

Leicester and Newcastle may go some way towards explaining

why these postcode areas have so many developments in them.

We wait with interest to see the impact of the Chancellors

Spending Review – and in particular what impact this has

to those buying for the first time - but it’s no doubt going

to be an interesting and busy few months to come.

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Average New Home Prices

*Size adjusted average price

Period November 2014 to October 2015 and % variation over same period 2013/14.

SCOTLAND £ AVERAGE %+/-

£260,248 1.6% ↑

£138,614 2.4% ↑

£164,919 0.9% ↑

£186,643 5.0% ↑

NORTH EAST £ AVERAGE %+/-

£260,405 3.8% ↑

£105,045 -1.1% ↓

£154,135 -1.5% ↓

£143,652 0.7% ↑

NORTH WEST £ AVERAGE %+/-

£293,403 4.8% ↑

£127,195 1.5% ↑

£170,748 2.8% ↑

£162,818 5.2% ↑

YORKSHIRE & THE HUMBER £ AVERAGE %+/-

£272,852 4.4% ↑

£115,863 -1.8% ↓

£154,761 1.3% ↑

£150,674 2.3% ↑

WEST MIDLANDS £ AVERAGE %+/-

£314,679 3.3% ↑

£137,832 7.9% ↑

£195,531 5.5% ↑

£183,393 3.4% ↑

EAST MIDLANDS £ AVERAGE %+/-

£284,048 6.6% ↑

£108,403 4.1% ↑

£170,294 2.1% ↑

£163,152 6.2% ↑

-1.8%

WALES £ AVERAGE %+/-

£242,099 -0.2% ↓

£140,781 6.6% ↑

£163,254 2.2% ↑

£164,839 3.3% ↑

EAST ANGLIA £ AVERAGE %+/-

£388,233 13.4% ↑

£202,719 7.4% ↑

£252,282 7.6% ↑

£250,113 6.5% ↑

SOUTH WEST £ AVERAGE %+/-

£342,617 2.7% ↑

£170,242 5.9% ↑

£217,792 2.8% ↑

£212,126 3.3% ↑

GREATER LONDON £ AVERAGE %+/-

£686,149 13.0% ↑

£395,972 9.9% ↑

£477,957 9.4% ↑

£462,450 1.7% ↑

SOUTH EAST £ AVERAGE %+/-

£469,272 7.3% ↑

£206,226 8.0% ↑

£302,602 8.0% ↑

£280,307 6.4% ↑

Detached

Flats

Semis

Terrace

13.0%

LARGEST % DECREASEYORKSHIRE & THE HUMBER

GREATER LONDONLARGEST % 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

richard.sexton@esurv.co.uk 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