The Eastern region housing sector has seen an increase in planning applications, new developments, transaction volumes and mortgage approvals according to research from Bidwells. It shows house prices in the East have firmed up in the past six months. The Cambridge and Milton Keynes markets have recorded quarterly increases of 1-2% - almost double the national average. The government's Help to Buy scheme is expected to prove more effective in terms of stimulating the market than previous initiatives. There has been a notable upturn in activity from both first-time buyers and private investors - attracted by a lettings market which has grown by 4-5% per annum over the last seven years. Meanwhile, the Cambridge residential investment market is buoyant.
Bidwells expects the supply of new houses to rise gradually in 2013 and for the remainder of this decade. However, with housing construction persistently well below demand for the past twenty years in most markets (approximately 110,000 new homes come to market every year, but informed commentators suggest that the figure should be over 200,000), it is unlikely that new supply will have a moderating effect on pricing.
The report concludes that The National Planning Policy Framework (NPPF) has yet to fulfil the Government's ambition of stimulating economic growth via new construction, as housing land allocations in England actually fell sharply in the two years to mid-2012 and over 272,700 new homes disappeared from the development pipeline. It highlights the fact that as Local Authorities are no longer required to follow the provisions set out in Regional Spatial Strategy (RSS), most Councils appear "ill-prepared" for NPPF despite the year's grace they were given - resulting in a contraction of the national residential land.
Whilst NPPF led to a marked increase in residential planning applications and consents in the latter months of 2012 - leading to a 21.8% increase in approvals relative to 2011 - residential planning consents actually fell by -14.6% in the Eastern Region, relative to 2011.
Guy Jenkinson, head of new homes at Bidwells, said:"The Report reinforces what we have been thinking for some time: that the Eastern Region is probably the fastest growing region outside London for a whole host of reasons. For example, places like Cambridge are attracting major international brands (and therefore creating thousands of jobs), many consumers are opting for the lifestyle choices the region offers and homes are more affordable than London and many parts of the Home Counties. In addition, the Cambridge Lettings market has more in common with London than East Anglia, therefore the collective impact of all these factors on the region's housing market will inevitably lead to sustained and uninterrupted growth."