UK finally building more homes

number of new homes "encouraging"

House building has got off to its best start to the year since 2007 with most of the UK seeing strong growth, an industry body has reported.

The National House Building Council (NHBC) said that 40,281 new homes were registered between January and March, marking the highest total for the first three months of the year since 53,420 new registrations were recorded in early 2007.

The "encouraging" figures seen so far for 2015 also represent an 18% increase when compared with the first three months of 2014, the NHBC said. But in London, new registrations were down by 29% year-on-year in the first three months of 2015.

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In March alone, 17,210 new homes were registered across the country, marking an upswing of nearly one third (32%) compared with March 2014.

The NHBC's registration figures are taken from builders who are responsible for around 80% of homes constructed in the UK. Builders are required to register a house with the NHBC before starting work, which means its figures represent homes that are to be built in the months ahead.

NHBC chief executive Mike Quinton said: "Our figures show an encouraging start to 2015 with new housing registrations up 18% on the first quarter of last year. Housing growth levels remain strong across virtually every part of the UK.

"However, we have made clear that the UK is still building way below the volumes of homes that we need. NHBC looks forward to working with government to ensure that high quality new housing is a top priority."

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Northern Ireland, the South East of England and Eastern England saw particularly strong growth in house building in the first three months of 2015 compared with early 2014.

Eastern England saw a 70% upswing in new registrations, while Northern Ireland saw a 42% increase. In the South East, new registrations grew by 47% year-on-year in the first three months of 2015.

In Yorkshire and the Humber, the number of new-builds being registered was up by one third (33%) on a year earlier, while in the South West of England the figure was up by 38%.

David Little, NHBC director, Northern Ireland, said that commuter areas around Belfast are particular hot spots, adding: "It is clear that confidence is back, with many builders in Northern Ireland enjoying a very strong start to the year."

But some regions saw falls compared with a year ago. In London, 5,622 new homes were registered between January and March, marking a 29% fall compared with the same period a year earlier.

The NHBC's previous figures for London have been particularly strong as the economy started to recover. The latest figure could possibly be a sign of house builders taking a pause in early 2015 in order to await the outcome of the General Election.

Meanwhile, the North East of England also saw a 10% fall in new registrations compared with the first three months of 2014.

Steve Catt, NHBC director, England, said the Eastern region has "notably picked up, with new home growth continuing apace in the Midlands, and, as we have regularly seen over recent years, within the South East".

In Wales, new registrations were up by 32% year-on-year in the first three months of 2015 and in Scotland they increased by 15% compared with early 2014.

Peter Watton, NHBC director, Wales, said: "It is clear that (mortgage support scheme) Help to Buy - Wales has made a real impact."

And Malcolm MacLeod, NHBC director, Scotland, said: "After a difficult few years, the sector is beginning to show some considerable improvement."

The figures also show that detached homes are continuing to make a comeback. More than one quarter (26%) of new homes registered in the first three months of 2015 were detached, equalling the percentage seen across 2014. The proportion of homes being built that were detached fell to a recent low of 15% in 2008.

The bulk of new-build homes being registered are flats and maisonettes, accounting for 31% of properties.

Here are the numbers of new property registrations across the UK by the NHBC between January and March 2014 and the percentage change compared with the first three months of 2014:

:: Scotland, 3,189, 15%

:: North East, 1,180, minus 10%

:: Yorkshire and the Humber, 2,223, 33%

:: East Midlands, 3,573, 30%

:: Eastern England, 4,318, 70%

:: London, 5,622, minus 29%

:: South East, 6,624, 47%

:: South West, 4,486, 38%

:: West Midlands, 3,835, 31%

:: Wales, 1,193, 32%

:: Northern Ireland, 776, 42%

:: North West, 3,262, 5%

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UK finally building more homes

In Scotland, Edinburgh is seen as a city with huge growth potential. In 2014, prices in Edinburgh were up 10% in a post referendum boom that shows little sign of slowing down.

Local agents are not expecting quite such stellar growth for the next 12 months, but they think price rises will be well above the average predicted for the whole country.

Rightmove named this as the area where it expects house prices to grow the most over the next five years. It says that over this period there will be a huge number of people moving out of London in order to afford to get onto the property ladder. They want a reasonable commute combined with plenty of attractions in the local area, and Southampton offers all this. With relatively affordable housing stock, it's a prime candidate for growth.

Luton was Rightmove's candidate for the second biggest house price rises over the next five years. It emphasised that this isn't a mater of opinion, it is the result of crunching the data.

Luton is another major beneficiary of the move out of London, and while it is arguably not as attractive a place to live as Southampton, it's only 23 minutes into central London - which rivals some of inner London's commuter times. With average prices of £179,368, it's clearly a far more affordable option, and the area has already started to show signs of a boom.

This was the third area suggested by Rightmove. As with Southampton, it is well positioned for London commuters, and also has huge local attractions.

A survey last year asked young professionals to name the place they would most like to live, and Brighton and Hove were the only areas that appeared on the list outside London.

One of the reasons it's not higher up the list is that houses are already on the pricey side, with an average cost of £338,956 - up 13% in the past year alone.

There may be few people who grow up with the dream of living in Swindon, but the electrification of the rail line to London will bring travel times down across the West Country, so Swindon becomes part of the outer commuter area.

Given that the average property costs £168, 968, it's easy to see why Swindon will be a popular option for commuters on a tight budget.

Bath is also going to benefit from electrification of the line, because the commute to London will fall to a manageable 70 minutes. The beauty of the city - along with a vibrant social and cultural life - makes it a clear choice for more long-distance commuters.

Of course, with an average asking price of £374,617, it's not a tremendously cheap place to buy, but the geography of the city restricts development, so these prices are expected to rise still further.

Property Frontiers says that the booming house prices in Oxford are set to get even higher. At the moment, travel to London takes 60 minutes, but this will reduce even further in 2016 when the line is electrified. Prices in the most desirable parts of the centre aren't much cheaper than London.

However, further out there are pockets of affordability, and when the Water Eaton station opens in 2015 it will open up areas to the north of the city too.

Manchester has seen enormous property price rises over the last couple of years, and Property Frontiers expects this to continue into 2015.

Other commentators are expecting the growth to slow over the next few years, especially given the gains made since 2012. However, demand for properties remains buoyant, and with the growth of the local economy, price rises seem inevitable.

Rising prices in London have pushed buyers further and further out of the centre, so estate agents are now claiming zone three as 'the new zone 2'.

Savills believes that the biggest gains over the next five years will be the less glamorous districts - putting the South and East in the frame. Gritty areas that could benefit include Ladywell, Streatham and Catford in the south, and Leytonstone, Forest Gate and Walthamstow in the east.

Cambridge could also perform well. It has already had house prices lifted by the growth of tech companies to the north of the city, and the arrival of pharmaceutical headquarters will help push prices up further.

In 2016 a new rail service from the city to the science park will keep prices rising, and beyond the opportunities presented by the local economy, Cambridge is also part of the 'outer commute' area of London, which Savills expects to shoot up in value over the next five years.


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