Bumper year for new homes in 2007

Julian Sedgewick, Director for New Homes at Chesterton Global comments: “The 2006 new homes market saw fantastic prices achieved across the country. In certain areas of London record prices per square foot were repeatedly broken. Regeneration areas such as Hackney, Elephant and Castle, Kings Cross and areas of East London have particularly benefited.

“2007 will see the market for new homes grow steadily as more and more people move towards the option of purchasing a new build. While other property professionals are predicting that the sector will grow between 5 and 7 percent, I predict that this year will see a rise of up to 8 or 9 percent. Several factors will contribute to this rapid growth.

“Currently the market is characterised a pressing shortage of stock. New build homes will provide a significant share of what comes to the market this year. People are increasingly retaining their homes and re-mortgaging to purchase their next home. As less stock is available new builds become more attractive. Pressure from the supply side will work in conjunction with continued strong demand.

“International buyers remain interested in new builds and, with the bonus season upon us, city bankers will be sinking their money into new homes as they hope to see their assets grow as their apartment is built. An advertised release of properties can attract so many buyers that queues form at 6am and I have heard of fights breaking out as people compete to secure their desired home.

“The influence of the 2012 Olympics should not be underrated. This is one of several large-scale regeneration projects in London receiving government funding and rehabilitating a previously scruffy area. Large developers are supporting these initiatives and as areas develop investor interest grows.

“As the rest of the market begins to cool off in late April the new build sector will retain its strength. A levelling off is the worst that can be expected in the sector.

“To summarise, the new homes market for 2007 will continue to grow and we will see higher prices achieved as regeneration areas become increasingly desirable. I predict the new homes sector will come out stronger than the normal market as it is aided by many different types of buyers from end user to investor.“