According to a new analysis the north east of England and London have seen the largest concentration of new build starts in the past 12 months…
An analysis conducted by Hometrack has revealed London and the north east of England have both seen significant numbers of new build starts.
The data showed new build housing starts make up some 11 per cent of all property sales across the UK. The analysis, which aimed to identify housing markets which are most dependent upon new housing sales, found London and the north east were the two regions with the greatest concentration of new builds.
The report said the supply of new homes across the country was not uniform and instead depended upon the strength of local market conditions, land availability, and planning restrictions.
Using data from the Department for Communities and Local Government (DCLG), the analysis showed new private housing starts increased by 3.1 per cent in the past year and by 33 per cent over the last three years. This was due to builders increasing output on the back of rising transactions and growing demand for property.
Support for Help to Buy has also pushed up the number of new build starts, making up some 27 per cent of all housing completions last year.
The data showed the regional markets with the highest concentration of new build starts as a proportion of housing sales were seen in the north east at 15 per cent, and in London at 14.3 per cent.
The analysis suggested the above average levels seen in the north east were due to slow recovery in the general levels of housing transactions. This meant builders were instead relying on Help to Buy to support new build starts.
London, on the other hand, has been in the throes of a building boom over the past five years, seeing private housing starts in the last year grow significantly. This has been concentrated in inner London, where regeneration schemes have formed the backbone of new housing supply.
The London Borough of Newham reportedly saw the highest concentration of new home starts, with more in the last year than was sold in the entire borough in the previous. This gives a new build concentration of 104 per cent.
Outside the capital, high concentrations were also seen in Cambridge and the Ribble Valley at 42 per cent, and in Midlothian at 39 per cent.
Areas with high concentrations of new builds are generally those where land has been released for development.
Managing Director of Data and Analytics Alex Rose said: “These figures show how the delivery of new housing is not evenly distributed across the country as developers balance the relative strength of local housing markets and demand for new housing against land availability and planning constraints.
“The challenge for house builders is that some local markets are more new build reliant than others which will impact assumptions on sales rates and assessment of demand for housing.
“This is particularly important given the proposed transition from Help to Buy to Starter Homes in 2016 where there is overlap between the two schemes.
“There are many parts of the country where new private housing starts as a proportion of sales are well below the national average. 102 local authorities have a new build concentration of less than 5 per cent.
“This is down to tougher planning requirements, land availability and the strength of the local housing market resulting in below average levels of new housing starts.”
He added: “What’s crucial is that those developing homes and buying land understand the competitive landscape and the impact it has on prices and sales rates, something that is equally important for planners assessing the viability of new housing schemes.
“Some markets have seen more of a surge in new supply than others in recent years and a granular view on supply is key to de-risking development and making accurate and informed investment decisions.”
