Assetz® News » HOME | RSS Feed FEED | LIST ALL ARTICLES | ASSETZ HOMEPAGE
Investment Property News from Assetz

Assetz® Property News Service

Housebuilder\'s Announcement of Delay to New Sites Only the Start...

24th April 2008 | back to article listings BACK    print this article PRINT

Stuart Law, Chief Executive of Assetz, responds to Persimmon’s announcement today that it has postponed the commencement of scheduled new sites until the mortgage market improves:

"Today's announcement has come as no surprise and only supports what I have been saying since last September, developers are not starting work on new sites in the current climate. Persimmon is not the first and it will by no means be the last to announce a freeze on new starts, today's announcement is likely to be the first in a series of similar admissions across the housebuilding industry.

“With the number of new build properties set to decrease over the short term, we are effectively moving away, rather than towards Government's overly ambitious targets of achieving three million new homes by 2020, this will ultimately support house prices and lead to renewed growth in due course.”

Law goes on to add:

“The level of house building reductions is still to become clear, but a 40% reduction to 96,000 new housing starts for both 2008 and 2009 (from 2006 levels of 160,000 new homes) is feasible based upon present evidence. However, I expect the most likely outcome will be around 110,000 new homes being built for each of these years.”

Bank's injection of £50 billion too little too late

"The Bank's injection of £50 billion into the mortgage market may have been too little too late and will not bring immediate results. It is likely to take until September for some degree of normality to return to the market, albeit a risk-averse normality. I expect rates to come down a little by then and for there to be an increase in the number of homebuyer and buy-to-let mortgages available.


”The latent demand for homes is still clear to see, however - first-time buyers who have deferred their purchase are causing a huge growth in rents due to the general shortage of rental property in the UK.  Even city centres are now benefiting and national rents are rising at around 10% per annum. At the very least, I expect this to continue for the whole of 2008 and 2009.  It is quite possible rents could rise by 50% over the next five years if mortgage rates don't come down and mortgage funding generally doesn't become more commonly available again."

 

Assetz® is a UK and International Property Investment Specialist. Please visit our property sites shown below.

Assetz for Investors UK Assetz France Assetz Spain Assetz Cyprus Assetz Bulgaria Assetz Germany Assetz Canada Assetz Portugal Assetz Ski Assetz Cape Verde Assetz India Assetz Finance Assetz Fund Management

Accessing the news service

You can view all of the Assetz® UK, International and UK Property Investment Articles and News here.

We also provide an RSS Feed Feed of the news service, or you can view all articles. Click here to view more information on RSS readers and how they make reading online news more convenient.

eXTReMe Tracker