Monday, August 22, 2011

Highly reliable data hot off the FT press

New-build property prices plummet 21% in London

New data shows stark regional differences in new-build property prices. The average price of a new-build property fell in London by 21 per cent in the 12 months to July 2011 but average prices in England, Wales and Scotland rose by 1.4 per cent, monthly data from Smartnewhomes has shown. In London a new-build property would now cost £330,637 compared to £220,788 in Scotland, England and Wales. Annual average growth has fallen back from 3.4 per cent in May and June which is indicative of the summer lull in demand for property from buyers during the summer months and housebuilders incentivising sales Smartnewhomes claimed a drop in asking prices in July suggested homeowners were also taking a "more realistic" approach in a quieter market.

Posted by jack c @ 02:17 PM (2224 views)
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8 thoughts on “Highly reliable data hot off the FT press

  • mark wadsworth says:

    That’s not fair.

    If you play the “reliable” card in the very title then SBC and I have nothing to add 🙁

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  • It’s wearing a bit thin – we need some new material !

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  • mark wadsworth says:

    OK, with my serious hat on, let’s pick up on this nugget:

    “[Developers] are building fewer high value apartment schemes and are instead focusing on more affordable locations where there are good transport links to the capital.”

    That’s because of the “London Plan”, where the GLA has graded all sites according to how far away they are from the nearest bus stop or train station on a very detailed level, and then coloured in the contour lines on a map. i.e. they stuck in a compass and everything within a hundred yards of a train station is 6B, from a hundred to three hundred yards away is 6A and so on. Stuff which is more than ten or fifteen minutes walk from train station or bus stop is grade 1 (referred to as PTAL or “Public Transport Accessibility Levels”).

    The max build density depends on where the plot is (to within a few yards, it’s very detailed and precise). The max build density in Grade 6B areas in Central London is over 1,000 “habitable rooms per acre” and in Suburban/Outer in Grade 1 it’s 150 habitable rooms per hectare.

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  • Mark,
    Does this mean that prior to the London Plan, developers were building blocks of flats far away from bus stops & train lines; but now they can’t? That seems like a sensible outcome.

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  • mark wadsworth says:

    Drewster, nope.

    The plan was implemented by Red Ken sometime in the dim and distant past and this replaced something else. It was updated in 2004, with a major increase in maximum densities in high PTAL areas, and updated again in 2011 with a further increase in max density in high PTAL areas.

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  • Well if the plan hasn’t been updated since 2004, then it can’t have been the driving cause behind the nugget you picked up earlier. My interpretation is: “There are fewer buyers for high-end luxury flats, so we’re building cheaper ones instead.” He doesn’t explain why there are fewer. I’d suggest rising student debt and redundancies in banking in London, though no doubt there are many other factors too.

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  • mark wadsworth says:

    I dunno. Maybe the effects of the 2011 revisions kicked in early? Anyways, i didn’t say that this was the cause, it’s just that Jack C said we needed new material so I bunged in the London Plan for people’s general edification.

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  • MW – thanks for the info – new to me – I’ll post some new reliable stats but will leave the “reliable line” out of the headline !

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