Summer 2007
Rising housing supply


The main findings of the report are as follows:

• Although housing supply has been rising nationally, the levels still fall well short of the numbers that would remove housing scarcity. Scarcity is most pronounced in London and the south of England and is a major contributor to affordability issues which in turn is constraining the ability of first time buyers to buy homes.
  
  
• The Government recently announced its commitment to increasing housing output to 240,000 additional homes per annum in England by 2016. Whilst the proposals would increase housing output by 15% by 2011, at face value they would maintain output of market housing at around current levels, whilst increasing affordable output by 80%.
  
  
• We anticipate most risk of slippage in the housing growth areas, where high levels of planned supply will change the dynamics of the local market from those of housing scarcity prevailing previously. Developers will have to move down the pricing curve from the levels of higher value demand that they have targeted in the past.
  
  
• In order for supply to increase to the 240,000 unit target, (including a higher number of affordable units) a different spatial approach needs to be taken. This should include a more-even distribution of new supply, wherever possible in or on the edge of established markets.
  
  
• Widening the range of land type and location will be a fundamental part of the route to higher housing output. In reality, political factors and physical constraints will mean that some markets will continue to experience housing scarcity, whilst others will see much higher volumes of development of lower priced market housing.

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Contact Information

Harriet Black
+44 (0)20 7016 3837
hblack@savills.com

www.savills.co.uk/research