Research develops model to estimate how how mix, density and location of housing affects affordability and value
A new report has outlined how the mix, density and location of new housing developments affects the affordability of those new homes for first-time buyers, and how financially viable they are for the developer. It finds not only that what is most profitable and most affordable is rarely the same, but also that both vary considerably from city to city and within each city.
The National Housing and Planning Advice Unit (NHPAU), the country's foremost advisory body on housing affordability and the planning delivery system for housing, reveals these findings in The Implications of Housing Type/Size Mix and Density for the Affordability and Viability of New Housing Supply.
The National Housing and Planning Advice Unit (NHPAU) was established in response to Kate Barker's Review of Housing Supply (2004), and was tasked with helping to make market housing more affordable and to address the trend in the rise in the number of people prevented from getting onto the property ladder.
The research has developed a model which can estimate the sales value of different mixes (detached, semi-detached, terraced, flats) and densities of homes on particular sites. The sales prices are compared with the prices of existing homes in the area and local incomes to assess whether the homes built would be affordable for first time buyers. The sales data is also compared with building cost estimates, to explore how profitable different mixes would be.
"The NHPAU has long maintained that building the right type of homes in the right places is crucial to improving affordability. This work provides further evidence of this and of the tensions between what is most profitable for the developer and what may be best for the local community. It should be studied carefully by those responsible for developing housing strategies and local plans", says Neil McDonald, Chief Executive, NHPAU.
The study draws conclusions from ten case study local areas across England and the key findings are:
Viability varied widely across the case study areas and between locations within each city.
There were marked differences in the affordability of market housing developed on new build sites across market areas.
The study urges caution against 'one size fits all' planning policies, stating that this would not serve to meet the preferences of a wide range of housing consumers or to promote affordability.
The Implications of Housing Type/Size Mix and Density for the Affordability and Viability of New Housing Supply is available on the NHPAU website: http://www.communities.gov.uk/nhpau/keypublications/research/ from 1 March 2010.
1. The Implications of Housing Type/Size Mix and Density for the Affordability and Viability of New Housing Supply
The Implications of Housing Type/Size Mix and Density for the Affordability and Viability of New Housing Supply has been prepared by the National Housing and Planning Advice Unit. It has sought to:
Develop a model to understand how the price of a house is influenced by the types of dwelling and the density in the surrounding area.
To estimate the viability of a range of housing projects with different types and densities in selected local authority case study areas.
To examine how the mix and density of the homes built on a site affects how affordable they are.
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