A new report released by estate agents Savills confirms that the north-west is ahead when it comes to providing a broader range of new housing stock.
The latest analysis predicts that the region is likely to increase its volume of residential property by 10%, while the south and Midlands look likely to deliver marginal increases in supply.
The research identifies a contrast between the north-west’s increase of 15% in 2017/18 in the number of new houses constructed and London’s chronic shortage of affordable housing despite planning permission being at the highest on record. London recorded a fall of 15% in output and is forecast to see annual growth decrease by around 15%.
Greater volume in housebuilding is needed
Savills reports that there has been a significant rise of 74% since 2013 in new-build homes across England and Wales, based on the government’s official net additional dwellings data; recording 217,000 new dwellings in 2016/17 compared with 125,000 recorded in 2012/13.
The prediction in net additional dwellings year on year since March 2017 to March 2018 currently stands at 218,000 – an increase of 1,000 new homes from 217,000. The government’s ambitious drive to build 300,000 new homes per year is spurring on house builders and developers, while the relaxation in planning regulations and the expansion of housing associations as serious players in the new development schemes are all aiding the building of new homes across the country.
However, Savills forecasts that what is needed to sustain the new development momentum is a broadening of the type of homes available. It identifies the importance of the building industry needing to cater to an increasing number of downsizers, retirees, the build-to-rent sector and the provision of more affordable housing.
Strong property market and stable prices
The report recognises the correlation between house price growth and a boost in delivery. A stagnating property market in London and the south-east is likely to affect the general expansion programme of providing new houses if the existing market does not become more robust.
Latest sales activity reports that the stability in the north and Midlands is in stark contrast to London and the south, where in the last year to March compared to the same previous three-year period, levels are running at 25% and 10% lower respectively.
The report highlights: “Moving outside the traditional sales market is essential to get closer to delivering the annual target of 300,000 new homes. That means more affordable, build-to-rent and retirement housing in addition to more homes where there is sufficient market demand. If an active market is a key requirement to absorb more new homes, the outlook for increased supply is poor.
“Our five-year forecasts for house prices and transactions set out limited real terms value growth even for the regions we expect to outperform, and we anticipate transactions in 2022 to be broadly in line with 2017.”
“Changing non-residential space, mostly offices, into homes has been making a significant contribution to net supply since permitted development rights were expanded in 2012, but the stock of suitable properties for conversion is a finite resource. This source of new homes is likely to drop away in the near future, a further barrier to continuing to increase housing supply.”
