New figures saw house prices in Greenwich borough stabilise last month whilst annual falls remained high at 7.4%.
I’ve been covering this trend in the borough for around six months now. It’s part of a wider London pattern though is particularly pronounced in areas with many new-builds. The annual fall has moderated somewhat from near 10% to 7.4% in February.
This data is from Land Registry figures which documents all sales in the country – both mortgage and cash purchases and is one of the few indices which breaks figures down by borough.
Whilst that can lead to huge variation in some boroughs the trend in Greenwich has been consistent for some time now.
Factors at play are worldwide sluggish economic conditions with overseas buyers becoming reluctant to pay new build prices, the Brexit affect and also Help to Buy elevating new build prices way above existing market levels – and then when buyers come to sell finding it difficult to secure buyers willing to pay elevated prices.
Help to Buy appears to be becoming Help to Negative Equity for some buyers. Add in ground rents, high service charges and cladding issues at many Greenwich borough developments and new builds are increasingly an albatross for buyers.
Developers though have done extremely well out of the scheme with profit margins rising rapidly and directors claiming large bonuses with Persimmon the most infamous and the biggest housebuilders paying directors £230 million over the past five years.
Berkeley Homes has seen a 9.5% increase in homes built result in a 234% rise in profits since 2013. Barratts’ profits are up 318% and Bellway 399% since George Osborne introduced the scheme. Many of these companies provide low levels of affordable housing as doing so is deemed “unviable”.
Incidentally, while many press outlets are keen to highlight stories of price increases (I’m sure it’s unrelated to many ads from the housing industry) they’re much quieter on this news.