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Data sources: LSL New Build House Price Index | ONS, EARN05 – Average weekly gross earnings of full time employees, by region.

LSL New Build IndexThe market indicator for New Builds July 2015

With the focus now turning from demand to supply – the news of planning reforms to support house building is no doubt welcomed across the

industry and, in turn, should improve affordability levels for those looking to buy new but what is happening ‘on the ground’ with prices –

Shaun Peart, Managing Director of LSL Land & New Homes www.lsllandandnewhomes.co.uk explains:

The year on year change in new build prices to the end of June 2015 has fallen

back slightly to 6.8%, from 7.2% in May – although still up on last year’s June

figure of 4.6%.

Splitting the country into The North and The South along the traditional Wash

to the Humber line shows a further level of detail – as the graph shows - with

Greater London also separated out.

The cause of the flat lining of the crude average figure is the slowdown in the

Greater London market which is offsetting the growth in the rest of the country.

A clear ripple effect, which has been evident in previous property cycles,

is now increasingly evident. The regions closest to Greater London are

seeing strong growth rates in the 6-8% range and the South West

is not far behind with a growth rate approaching 5% - all more than

twice the growth rate at achieved last year. Greater London’s growth

rate has, however, now slowed to a similar level to June 2014.

At the other end of the country, while most northern regions are

achieving growth rates similar to those achieved by the South - around

2-3%, Scotland is leading the pack with a growth rate of 4.8%.

Overall, the Southern surrounding regions appear to be moving

into a stronger growth phase and the Northern regional counties

seem, at last, to have returned to a growth phase.

Market movements are to some degree determined by the availability of

house buyers. Overseas money is said to account for a sizeable proportion

of property purchases in Greater London. But as the table below shows,

this has restricted the affordability of property in London to many buyers.

The First Time Buyers HPE Index looks at the average cost of buying

a 70 sq m 2 bed home in each region - compared to the average

earnings of a full time employee in that region. On average a 70

sq m home costs the equivalent of 5 years and 3 month’s gross

earnings. But there is a wide regional variation in this figure.

In fact the East Midlands appear to be the most affordable place

to live at present. It is amongst the highest performers in terms of

regional house price growth (at 5.9%), and simultaneously it has the

lowest first time buyers HPE ratio, at 3.82. So it has both high levels

of affordability and increasingly strong house price growth.

The First Time Buyers HPE index also expresses the affordability of a 70 sq

m property in each region, as a percentage of the average for all regions. A

clear North South divide again emerges with the Southern regions of South

East, South West, East Anglia all having a HPE rate of over 5 which results in

Index figures over 100. However Greater London has a HPE ratio of nearly 11,

which is three times greater than the rate in the most affordable regions.

How the figures will change in the months to come will be interesting to

see but, at the moment, while the supply issue is being addressed we

must not forget that some of the basics still need to be considered – with

the need for more trained and skilled people on the top of the list. Without

these while the headlines sound good, it’s the results that matter.

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Average New Home Prices

*Size adjusted average price

Period July 2014 to June 2015 and % variation over same period 2013/14.

SCOTLAND £ AVERAGE %+/-

£264,526 7.0% ↑

£138,629 2.3% ↑

£163,979 -0.5% ↓

£182,711 2.6% ↑

NORTH EAST £ AVERAGE %+/-

£259,619 7.2% ↑

£106,435 -0.8% ↓

£156,171 1.0% ↑

£144,072 -1.0% ↓

NORTH WEST £ AVERAGE %+/-

£285,708 3.5% ↑

£126,807 2.6% ↑

£168,114 2.4% ↑

£161,007 2.9% ↑

YORKSHIRE & THE HUMBER £ AVERAGE %+/-

£269,852 5.3% ↑

£118,768 4.2% ↑

£152,391 -0.9% ↓

£149,728 1.1% ↑

WEST MIDLANDS £ AVERAGE %+/-

£310,522 3.8% ↑

£134,806 7.8% ↑

£192,676 4.8% ↑

£186,427 7.8% ↑

EAST MIDLANDS £ AVERAGE %+/-

£278,940 8.0% ↑

£109,094 7.4% ↑

£168,828 2.7% ↑

£160,151 4.6% ↑

-1%

WALES £ AVERAGE %+/-

£241,233 0.8% ↑

£137,403 4.3% ↑

£165,297 3.9% ↑

£162,721 3.4% ↑

EAST ANGLIA £ AVERAGE %+/-

£366,972 8.9% ↑

£198,525 7.5% ↑

£245,575 5.8% ↑

£250,081 9.4% ↑

SOUTH WEST £ AVERAGE %+/-

£338,427 3.1% ↑

£167,481 5.8% ↑

£217,118 5.5% ↑

£212,205 5.0% ↑

GREATER LONDON £ AVERAGE %+/-

£658,033 13.6% ↑

£385,720 11.7% ↑

£463,364 9.5% ↑

£470,751 10.0% ↑

SOUTH EAST £ AVERAGE %+/-

£459,796 8.2% ↑

£201,972 8.3% ↑

£297,265 7.9% ↑

£278,103 6.9% ↑

Detached

Flats

Semis

Terrace

13.6%

LARGEST % DECREASENORTH EAST

GREATER LONDONLARGEST % INCREASE

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This Index has been prepared by e.surv using anonymised data

based on a proportion of all new build valuations provided for lending

purposes. Figures represent 12 month rolling averages for each

period. The copyright and all other intellectual property rights in the

Index belong to e.surv. Reproduction in whole or part is not permitted

unless an acknowledgement to e.surv as the source is included. No

modification is permitted without e.surv’s prior written consent.

Whilst care is taken in the compilation of the Index no representation

or assurances are made as to its accuracy or completeness. e.surv

reserves the right to vary the methodology and to edit or discontinue

the Index in whole or in part at anytime.

e.surv (www.esurv.co.uk) is the Valuation business of LSL Property

Services plc (www.lslps.co.uk) and is the UK’s largest residential

valuation practice, acting for lenders, developers, Social Housing

organisations and other stakeholders in the residential property

market.

The business employs circa 450 chartered surveyors and covers the

entire UK.

LSL Land & New Homes is a trading style for members of the LSL

Property Services Group Estate Agency Division, one of the leading

residential property services groups in the UK. It’s strategy is to create

partnerships with developers and builders to support their objectives

and add value to their businesses.

It can provide integrated solutions for their benefit drawing on the

expertise of companies who are also under the LSL Group umbrella

including valuation services (e.surv), rental portfolio services, asset

management services and estate agency services fronted by well-

known high street estate agency brands like Your Move and Reeds

Rains. Services can be tailored to suite individual needs from bespoke

site sales and marketing, agency referral to the disposal of part

exchange, assisted schemes and new build stock, land sales and

acquisitions.

Data for the LSL New Build Database is collected is collected off the web sites of over 300 house builders on a rolling quarterly basis so giving a rough timeline of when sites start and finish and how many units have been built.

PLEASE NOTE: The majority of new build market activity data is quite historic, being based on returns made via the NHBC or Local Authority completions data. The LSL New Build Database tracks the new build activity of over 300 leading house builders with data collected from their websites on a rolling quarterly basis so giving a rough time line when sites start and finish and how many units have been built.

Disclaimer: The data is provided by LSL Land & New Homes and is based on data provided as described above. While reasonable skill and care has been taken in the preparation of the data – the copyright and all other intellectual property rights of which belong to e.surv limited - neither e.surv Limited nor LSL Land & New Homes can accept liability for the accuracy or completeness of the data provided.

Reproduction in whole or part is not permitted unless an acknowledgment to e.surv Limited is included. No modification is permitted without e.surv Limited’s prior written consent.

No warranty of the figures is given and no responsibility or liability of any nature to you or any third party for the whole or any part of its content is accepted. It is assumed that you will carry out your own due diligence before proceeding with any proposals or making any financial commitments.

For further information or enquiries regarding the underlying data of the

LSL New Build Index, please contact Richard Sexton via email

richard.sexton@esurv.co.uk or by phoning 07968 932118.

For further information about the LSL Property Services Group including

LSL Land & New Homes and e.surv, visit www.lslps.co.uk

Notes