Five questions answered on the rise in UK home sales

Is this trend set to continue?

A survey by the Royal Institution of Chartered Surveyors (Rics) has revealed that the amount of houses sold per surveyor has more than doubled since 2009. We answer five questions on the survey's findings.

How many more house sales are there now compared to 2009?

In January 2009, 9.8 houses were sold per estate agency branch. In the last three months of 2013 this rose to just over 21 sales per estate agency branch – a rise of just over 11 houses per surveyor. This is the highest number since March 2008.

What can this rise in UK house sales be attributed to?

According to Rics, the rise has come from an increasing availability of affordable mortgages and "pent-up" demand from a market that has seen many viable buyers unable to enter the market in recent years.

Is this trend set to continue?

According to the surveyors interviewed in the survey, prices and sales are going to keep rising.

What else has Rics said?

The institute added that unless more properties are built, prices could continue to rise.

Peter Bolton King, global residential director at Rics, said: "Unless we see a marked increase in the number of homes coming up for sale we could well be looking at a price rises becoming unsustainable in some areas."

What has the building industry said about this?

According to Bovis Homes, which released a statement today, the number of new homes being built is rising and they are also seeing an increase in forward sales.

David Ritchie, Chief Executive of Bovis Homes, said: "2013 was another successful year for Bovis Homes. Our forward order book is in its best position for many years."

The company’s average sale price was up 14 per cent to £195,100.

What have the experts said?

Lucian Cook, head of residential research at property adviser, Savills, told the Telegraph: "The positive sentiment in the housing market is likely to result in further increases in transactions in 2014. But with the mortgage market review looming, they could remain well below the pre-crunch norm and heavily weighted to those with equity."

Howard Archer of IHS Global Insight, also told the publication: "There is a real danger that house prices could really take off over the coming months."

Construction work at Elvetham Heath, Hampshire. Photograph: Getty Images.

Heidi Vella is a features writer for Nridigital.com

Getty
Show Hide image

The tale of Battersea power station shows how affordable housing is lost

Initially, the developers promised 636 affordable homes. Now, they have reduced the number to 386. 

It’s the most predictable trick in the big book of property development. A developer signs an agreement with a local council promising to provide a barely acceptable level of barely affordable housing, then slashes these commitments at the first, second and third signs of trouble. It’s happened all over the country, from Hastings to Cumbria. But it happens most often in London, and most recently of all at Battersea power station, the Thames landmark and long-time London ruin which I wrote about in my 2016 book, Up In Smoke: The Failed Dreams of Battersea Power Station. For decades, the power station was one of London’s most popular buildings but now it represents some of the most depressing aspects of the capital’s attempts at regeneration. Almost in shame, the building itself has started to disappear from view behind a curtain of ugly gold-and-glass apartments aimed squarely at the international rich. The Battersea power station development is costing around £9bn. There will be around 4,200 flats, an office for Apple and a new Tube station. But only 386 of the new flats will be considered affordable

What makes the Battersea power station development worse is the developer’s argument for why there are so few affordable homes, which runs something like this. The bottom is falling out of the luxury homes market because too many are being built, which means developers can no longer afford to build the sort of homes that people actually want. It’s yet another sign of the failure of the housing market to provide what is most needed. But it also highlights the delusion of politicians who still seem to believe that property developers are going to provide the answers to one of the most pressing problems in politics.

A Malaysian consortium acquired the power station in 2012 and initially promised to build 517 affordable units, which then rose to 636. This was pretty meagre, but with four developers having already failed to develop the site, it was enough to satisfy Wandsworth council. By the time I wrote Up In Smoke, this had been reduced back to 565 units – around 15 per cent of the total number of new flats. Now the developers want to build only 386 affordable homes – around 9 per cent of the final residential offering, which includes expensive flats bought by the likes of Sting and Bear Grylls. 

The developers say this is because of escalating costs and the technical challenges of restoring the power station – but it’s also the case that the entire Nine Elms area between Battersea and Vauxhall is experiencing a glut of similar property, which is driving down prices. They want to focus instead on paying for the new Northern Line extension that joins the power station to Kennington. The slashing of affordable housing can be done without need for a new planning application or public consultation by using a “deed of variation”. It also means Mayor Sadiq Khan can’t do much more than write to Wandsworth urging the council to reject the new scheme. There’s little chance of that. Conservative Wandsworth has been committed to a developer-led solution to the power station for three decades and in that time has perfected the art of rolling over, despite several excruciating, and occasionally hilarious, disappointments.

The Battersea power station situation also highlights the sophistry developers will use to excuse any decision. When I interviewed Rob Tincknell, the developer’s chief executive, in 2014, he boasted it was the developer’s commitment to paying for the Northern Line extension (NLE) that was allowing the already limited amount of affordable housing to be built in the first place. Without the NLE, he insisted, they would never be able to build this number of affordable units. “The important point to note is that the NLE project allows the development density in the district of Nine Elms to nearly double,” he said. “Therefore, without the NLE the density at Battersea would be about half and even if there was a higher level of affordable, say 30 per cent, it would be a percentage of a lower figure and therefore the city wouldn’t get any more affordable than they do now.”

Now the argument is reversed. Because the developer has to pay for the transport infrastructure, they can’t afford to build as much affordable housing. Smart hey?

It’s not entirely hopeless. Wandsworth may yet reject the plan, while the developers say they hope to restore the missing 250 units at the end of the build.

But I wouldn’t hold your breath.

This is a version of a blog post which originally appeared here.

0800 7318496