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LSL New Build Index
June 2015
LSL New NewBuild BuildIndex Index- June - May2015 2015 Following recent encouraging news that the number of It’s no doubt that developers have viewed the outcome of the homes built over the last 12 months was at its highest election as an aid to house building and that, as a result of their level since the end of 2009, LSL Land & New Homes renewed confidence, there are now even more plans in place report that, despite this increase in supply, house prices to build and greater optimism about the future and, as the generally continue to rise as Shaun Peart, Managing latest LSL New Build Index shows, it appears that yet again it’s Director for LSL Land and New Homes explains.
all regions remains as last month at 7.2% - up on last years’ figure of 4.7% and in comparison - excluding Greater London - where the figure has risen from 1.7% to 5% over the same period.
not just London who is seeing prices rises as a result. Shaun Managing for2015 Landthe andyear Newon Homes within LSL “InPeart, the year to theDirector end April year growth in It’s no doubt that dServices evelopers have viewed the outcome of the election as aagents n aid to house building Property (owners of high street estate Your new build prices is 7.3% which is slightly up on last month’s and that, as a result of their renewed confidence, there are now even more plans in place to build andnearly Reeds Rains) figure last and gMove reater oand ptimism about tdouble he future aexplains: nd, as tyear’s he latest Lfigure SL New Bas uild the Index graph shows, it appears that yet illustrates. again it’s not just London who is seeing prices rises as a result. Shaun Peart, Managing Director for Land and regional New Homes within LSL Property ervices (owners of high shave treet estate agents Your “The trends noted inSprevious months continued Move and Reeds Rains) explains: and a clear pattern now seems to be emerging with the growth in The table shows the weighted average price of a typical 70 London now slowing - at a steady 13% - the same “The Greater regional trends noted iprices n previous months have continued and a clear pattern now seems to be sqm (2 bed) new build property in each region of the country emerging w ith t he g rowth i n G reater L ondon p rices n ow s lowing -‐ a t a s teady 1 3% -‐ t he s ame r ate a s rate as last year - as the graph shows. last year -‐ as the graph shows. (the weighting reflects the proportions of terraced to flats being built). This price is then divided by the average full time earnings in each region to get to a simple house price to In summary, therefore, the average year on year growth figure for all regions remains as last month ratio. the higher the at earnings 7.2% -‐ up on last years’ This figure ois f 4then .7% and in cMay omparison -‐ excluding GYr reater London where the Regions Yrindexed to 15 and to May 14 -‐index, figure has risen affordable from 1.7% to 5% aover the same period. build property3.0% the less ‘starter’ new is. East Anglia 8.2%
East Midlands
Greater London Yet again it appears
For the third month in a row, however, growth in Greater London new build prices is slowing with the main growth area now being in the Southern regions (based on a line from the Wash to the Humber and excluding Greater London), which, at 6.6%, is more than three times the figure of April In terms of the rest f the crest ountry, sthe plitting the country into ‘The Nthe orth’ and ‘The South’ a‘The long the In terms ofothe country, splitting into 2014. Growth in theofNorthern regions has, in country contrast, tailed traditional Wash to the Humber line shows a further level of detail. The ripple effect from Greater North’ and ‘The South’ along the traditional Wash to the Humber off over thefirst past two London has spread to the South months. East with average year on year growth now at 6% -‐ double the
6.0%
2.5%
new12.8% build
14.2%East the
that property in North East and the North East2.8% -0.8% Midlands – as well as Yorkshire and the North West 3.2% 3.6% Humber – are more affordable to buyers with Greater London Scotland setting itself apart from the 4.8% rest of the country.-1.0% How this South East 8.0% 3.6% will change over the course of the next few months will South West 5.1% 3.6% be interesting to see but, for2.8% now, it is hoped that the new Wales 1.2% Government will support the industry in continuing to meet West Midlands 6.0% 1.9% the clear new builds and, as-0.4% part of this, Yorkshire anddemand the Humber there is for 3.5% make builds for all - wherever in1.7% the country Averagenew excluding GL affordable 5.0% they may be.”
Data sources: LSL New Build House Price Index figure achieved at this ime last year. And the ripple spreads further out, the Northern region, line shows a tfurther level ofas detail. The ripple effect from Greater Data sources: LSL New Build House Price Index ONS,EARN05 EARN05––Average Averageweekly weeklygross grossearnings earnings offull fulltime timeemployees, employees,by byregion. region. of which was close to zero percent annual growth last year, is now approaching 4% growth. In addition ONS, hasthe spread firstmany to thebelieve South East year on of InLondon terms of future thatwith theaverage combination while last year the most outlying regions of Yorkshire and the Humber, the North East and Scotland changes in pension low interest rates year growth now at 6% - fsystem, double achieved at this were continuing to rthe egister slight price alls, they athe re continuing all figure now seeing price growth in the time region of 3% -‐ again as greater tyear. he graph illustrates. and political certainty following will have last And as the ripple spreads further the out,election the Northern
a positive impact thetohousing market. Add this tolast talks ofis region, which wason close zero percent annual growth year, a Northern Powerhouse and the continuation of Government now approaching 4% growth. In addition while last year the most schemes to help buyers of new property it also appears to be outlying regions of Yorkshire and the Humber, the North East and good news for the new build market, in particular, although it Scotland were continuing to register slight price falls, they are all will be interesting to see what impact the closure of the Help now seeing price growth in the region of 3% - again as the graph to Buy (Scotland) scheme will have on the Scottish market. illustrates.
Affordability, of course, will be a contributing factor to future In summary, therefore, the average year on year growth figure for house our table illustrates, there are vast Part of the price growth and, asgroup differences across the country.
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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.
LNH1008 04/2015
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.
www.lsl-landandnewhomes.co.uk