Barratt Developments commissioned a study from the London School of Economics to explore the impact of new house-building on the prices of existing homes in the area.
The study looked at eight recent Barratt residential developments and found that prices of existing houses sometimes fell while construction was going on but once the developments were completed, the local areas generally moved with the market. Researchers could find no evidence of longer-term negative impacts.
The research found that house price changes in the surrounding streets suggest that new developments may stabilise or even increase prices in the immediate areas once development is complete where the market is generally stable and rising.
The research was co-sponsored by the NHBC Foundation. National House-Building Council head of research Neil Smith said of the findings: “Few would argue that the UK needs to build substantially more homes to avoid a housing crisis, but despite this, local opposition remains one of the main obstacles to achieving this. It is understandable that homeowners will be anxious to protect their investment in their homes, and concerns about the negative effects of new developments have compounded the issue. While there are clearly a number of factors affecting property values in specific areas, this research challenges the assumption that new build developments will adversely affect local house prices.”
Philip Barnes, group land and planning director at Barratt Developments, said: “One of the understandable fears of new development is that it might adversely affect existing house prices in a local area. We were keen to understand this potential impact and with the NHBC Foundation jointly commissioned research by the London School of Economics. Whilst this is a small sample it is reassuring that new housing developments appear to have little discernible impact on local house price patterns, indeed in some areas can boost local market confidence."