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South East faces severe shortage of housing from 2010
publication date: Jul 30, 2009
A shortage of new build housing will emerge in the South East of England next year, according to the latest Knight Frank residential development review.
New build starts in the region this year are likely to amount to the lowest since the 1950s. When combined with the lack of supply in the second-hard market – caused by the number of potential vendors opting to ‘wait out’ the recession – this could lead to a real shortage of properties for sale next year.
Jon Neale, head of development research at Knight Frank, said: “Developers who opt to move now may be in the position of being able to sell into an undersupplied market next year. However, they need to be very cautious, opting to deliver in-demand family housing into those areas with resilient housing markets. Elsewhere, a greater number of forced sales could undermine this strategy.”
Hugo Stuttaford, south east residential development, Knight Frank, added: “'Over recent weeks, we have noticed growing interest from developers and housebuilders in the well located land opportunities which have scope for well designed development. This is in complete contrast to the last quarter of 2008 where there seemed to be little appetite for any form of speculative land acquisition. Whilst these buyers remain a relatively small group (i.e. those with access to cash or private equity), these parties are beginning to compete aggressively when the right opportunity arises - particularly where the sale may be distressed and offer good value. It may be that we are seeing the first stages of a recovery in the land market but for the best sites only - the less desirable opportunities are still likely to struggle to find buyers.''
The new south east research also points out that many developers in the region are shifting their business strategies away from high-density flats to traditional family housing. However, the South East Plan, which calls for an additional 654,000 homes in the region by 2026, does suggest that many of these new dwellings can be accommodated in regeneration sites within existing urban areas.