A recent report found that although there has been a slight slump in new homes growth, the South East is still thriving and is predicted to grow even further due to a reduction in the number of buyers into the prime London market because of a soar in prices. Instead, potential buyers are turning their attention to the South East.
Factors such as rising house prices (the average price for a house in London hit £531,000 in January this year, compared to £360,000 in the South East) and the 3% hike in buy-to-let Stamp Duty are just some of the reasons why the Centre for Economics and Business Research (CEBR) has forecast this prediction of buyers fanning out into other areas, such as Kent and Sussex.
The outer boroughs and commuter towns which fill the South East seem to be the logical place to look after London, due to their close proximity to the capital, excellent travel links and similar economic status. Buyers can attain much more space than they would in London and for much less money.
As a small housebuilder although we are used to losing out to the larger housbuilders in terms of gaining land, there is no doubt that we have recently enjoyed a time of growth. This is reflected in our most recent development Longview, in Boughton-under-Blean, where interest and sales occurred very quickly.
Nationally, housebuilders have been answering to the need for more housing in a wide range of geographic. Construction on 7,805 new homes was registered in the South East between February and April this year, resulting in a 23% increase from the previous year.
Even so, with the desire for housing always rising, the rate of new homes growth is still only at half the rate it needs to be to meet the UK's demand. What is holding the market back is the same old story; lengthy planning permission processes, higher transaction costs and stamp duty increases, among other things.
With prices consistently rising, will the South East always be a viable option instead of London, or will it eventually turn into the same story, with people struggling to keep up with inflated prices and looking elsewhere? We will have to wait and see what the rest of 2016 has in store.