The latest house prices data has been revealed and recent trends in Greenwich borough of sharply reducing house prices continue. Falls are actually picking up on an annual basis.
Monthly reductions of 1.5% were recorded and 9.2% on the same month last year. The average home has lost £44k in value:
Last month saw 2.6% falls on monthly prices (which are volatile) and 8.6% reductions on an annual basis.
These figures are from LSL and pick up trends in new development prices.
New build owners may be feeling nervous. Prices for new homes are already 10-20% higher that equivalent properties in established areas in the vicinity – in part due to Help to Buy. When it comes to sell that premium could be reduced or eliminated.
Tower Hamlets is another area with many new builds also seeing large falls.
The City of London saw an 11% increase yet only nine homes were sold in the entire month.
Greenwich Council also embarked on a £65 million program of buying existing homes at the top of the market instead of using those funds to build new homes – despite their own figures showing it was the least cost effective method.
Building new homes using their own Meridian Homes venture would be 56% cheaper per additional property at £223,000 instead of an average cost of £394,550 buying an existing home off the market.
They opted to buy homes off the market as funds were derived from Right to Buy revenue which has to be spent within five years or sent to central government, due to rules introduced in 2013.
They sat on income for an extended period before deciding to buy market homes just before the expiry date. This was the worst option – for those in need and taxpayers – and could have been avoided if they had begun planning for new homes in 2013 and built up capability over five years.
They cannot use Right to Buy income to entirely fund directly-built new homes (it’s capped at 30%) but can partner with other agencies such as their own creation Meridian Home Start or Housing Associations.
It didn’t happen, and now millions of taxpayers money could have been wasted buying at peak prices compared to other options out there, and we have far fewer homes for those in need to boot.