Additional funding for housing announced
Regarding the government’s announcement that it will provide additional funding for housing in its comprehensive spending review, chief executive of SmartNewHomes David Bexon says, ‘The news that the government is pledging to spend an extra £150 million on infrastructure for new housing developments has been welcomed by the house building industry.
‘The Barker Review, published earlier this year, highlighted the problem of housing supply in this country, estimating that an additional 140,000 new homes will be needed each year to meet increasing demand, stabilise house price rises and reduce problems of homelessness, affordability and social division. We warned the government at that time that unless they take action to help put the report’s recommendations into practice, it would amount to nothing more than hot air.
‘House builders are ready and willing to build more new homes, but they are facing the barriers of local authority planning regulations, limited infrastructure and restrictions on development in many areas. This investment in infrastructure is the first step towards enabling house builders to develop in areas where people will want to live. The government now needs to work on resolving the remaining issues that are restricting house builders, starting with the archaic planning system and the delays it causes.’
House prices flatten
Jonathan Haward, managing director of the County Homesearch Company, comments on the first six months of the year: ‘The year to June has seen an unexpectedly buoyant market with a healthy supply of high-worth clients looking for houses throughout the country. Despite recent reports of a dramatic slowdown in house prices, thanks in part to the Governor of the Bank of England’s words of caution, the market has generally been extremely active. However, we have always envisaged that prices in the UK will naturally flatten as people can only borrow up to their new capacity once.
‘It is worth noting that, according to statistics, house prices are still rising by more than 19 per cent a year, and with employment and wages accelerating the market is set for a calm voyage. Looking to the future we see a natural “settling down” period which, if history repeats itself, will be followed by sustained growth at a more realistic rate’.
Regarding Hertfordshire and Bedfordshire, regional director Douglas Fensome says, ‘Many vendors are now bringing houses to the market to catch the end of the bull run but buyers are becoming more cautious against the background of further potential interest rate rises. One client with a £600,000 budget said they had looked at 26 houses since April and still none of them have sold. I suspect that many buyers will not pay asking prices for the rest of this year and will wait to see what happens in 2005.’