NEW BUILD PRICES RISE AS DEMAND CONTINUES BUT PLANNING PROCESS REMAINS THE STUMBLING BLOCK
- New Build Prices rise, on average, by 5.6% in June – down 1% on June 2015
- Greater London yet again sees prices storm ahead with the new build house price growth of – on average – 8.2%
- Housing Minister pledges welcomed – but there is more work to do
New build house prices rose on average by 5.6% in June 2016 according to the latest LSL Land & New Homes Index - the same rate as recorded in May 2016 - yet 1% down on figures released in June 2015. And while similar price rises were seen on a regional basis - up by an average 3.9% - it is Greater London, once again, that has seen the highest price growth at 8.2% - down, however, on last years’ figure of 11.6%.
Shaun Peart, managing director of LSL Land & New Homes comments:
"As new build prices continue to rise it is clear that, despite initial concerns raised following the referendum result, there is strong demand for new builds and that in some regions prices have risen quite considerably across all property types. In the North West, for example, which retains its position as one of the best performing northern regions; average growth of 4% was recorded in June with detached properties, in particular, recording 4.9% growth in prices – up to £302,960. In addition Scotland saw a big climb in the price of new build semi detached properties – up a massive 11% to £181,719.
In contrast, and yet still in the northern region, it was the North East that actually saw price reductions in June – particularly for detached properties as well as flats which were on average 2.6% lower than May 2016 - down to £103,627.In terms of the greatest movement, however, it was yet again Greater London who retained the lead over other regions – with an average increase of 8.7% in the price of a flats – to £418,853 followed by detached properties which rose 6.6% to £708,682. A massive difference compared to the price, for example, of a new build detached property in Wales which stands at just £246,032.
What is clear from the figures generally, however, is that prices are rising and this is no doubt a reflection of the continued demand for property and the ongoing need for more homes to be built. What is encouraging is that as Gavin Barwell took on his new role as housing minister his immediate commitment has been to build 1 million homes which signals, yet again, that new homes are one of the hot topics on the political agenda. Yet while there is a clear desire to build there remains the undeniable problem of where to build – particularly in light of Barwell’s comment about Green Belt land, and also how we can improve the planning process. Its good news to hear that
there was a 4% increase in the number of planning permissions granted in the first three months of 2016 but, from our perspective and that of the developers, there still remains the stumbling block of local authorities being unable to process the permissions as quickly as we’d like. Ultimately its great news that we have the government ‘on our side’ but there is still some work to do to meet the demand for new homes that clearly everyone agrees is needed.”