Is there a pent-up demand for new houses?

By Tony Abel, of Abel Homes in Norfolk.

ang_05_Tony_Abel_09.jpgYou can hardly fail to have noticed that barely a day goes by without the pages of newspapers containing a story or two about plans to build more houses somewhere in Norfolk.  Given the relentlessly pessimistic economic noises made by many commentators, you could be forgiven for wondering where the demand is for all these new homes.

But the undeniable fact is that, despite the short-term financial situation, Britain – and Norfolk – simply does not have enough homes to satisfy demand.  A combination of population growth and smaller average household sizes means there is a growing shortfall. Although this fact has been somewhat obscured by the well-documented difficulties in obtaining mortgages recently, the truth is that there is much pent-up demand out there – and that bodes well for the market in the medium to long term. It is rare indeed that we complete and carpet a new house without having first sold it.  At our new site in Drayton, where we are building 22 Conran-designed sustainable homes, we took deposits on over a million pounds’ worth of houses on our first open weekend – before a single footing had been excavated. You might reasonably argue that unique homes like this are bound to attract eager buyers.  But at our site in Swaffham, where we are building 51 more ‘conventional’ family homes, we have houses ‘sold forward’ off-plan with virtually nothing finished and unsold. If as a nation we are to continue providing enough new houses to ensure that everyone can have a home, then it is incumbent on the Government not to do anything to upset these welcome signs of recovery.  So I hope that our local politicians will lobby hard to prevent a ‘double whammy’ which is about to happen – but I expect it will be too little to late. On 1st January, two things are planned: the VAT rate will revert to its former level of 17.5 per cent, and the zero per cent stamp duty threshold will revert to £125,000, from the £175,000 it has been since last September. The VAT rate change is inevitable, and although it does impact on legal bills and estate agents’ fees, is not too harsh a blow for the property market.  But raising the stamp duty threshold has had a real, positive effect here in Norfolk, where £175,000 allows first-time buyers to get on the property ladder. If we are to build enough new homes for every household to have somewhere decent to live – and that should be a given in a civilised society – then we need to help the market get to a stage where house builders are confident in bringing new sites forward.  Do our politicians have the backbone to make this happen?  We will see.

*Tony Abel is managing director of Abel Homes at www.abelhomes.co.uk.

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