‘Demand will spark rise in Norwich house prices’
PUBLISHED: 06:00 17 April 2014
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Bosses at Persimmon Homes Anglia predict Norwich house prices to rise as the market continues to gathers pace following a shot-in-the arm from the government’s Help to Buy scheme.
Andy Fuller, managing director, said the developer “could not build homes quick enough” to meet a strengthening customer appetite for new build and secondhand homes both within the city and in nearby towns.
Such is the surge in demand that the firm was struggling to keep up due to a shortage of raw materials and skilled workers, the housing boss said.
But Mr Fuller ruled out talks that the increase pointed to an emerging housing bubble nationally, claiming the Help to Buy scheme had revived the market for new homes but was not driving up prices across the whole region.
It comes as Persimmon Homes Anglia’s regional sales rose 25pc – aligning it with a strong group performance from Persimmon which reported total current forward sales of £1.87bn for 2014, a 35pc rise.
The group said it had sold 5,000 new homes to customers in England using mortgages associated with the government-backed Help to Buy scheme, which offers equity loans on new builds to help buyers secure properties with a 5pc deposit.
Mr Fuller said: “New builds only equate to a small percentage of the housing market. It is the secondhand market that dictates price growth. But this year, in and around Norwich, you are going to see price growth because of the increasing demand. People will be trying to get lot more for their homes when they are selling.
“We are seeing similar pattern in East Anglia that we have been seeing across the group,” he added. “The number of sales through Help to Buy has been significant. People are moving, and it is not just new builds, the second hand market is also picking up as well. Norwich is particularly buoyant. We have been developing at Brundall, near Norwich. We launched the site in January and we cannot build them quick enough. The demand is incredible, and we are seeing similar demand in Wymondham as well.
“But the irony is that while selling the homes has become easier, actually building them has become more difficult. It is a complete reverse of where we were five years ago. We are finding it hard to get hold of the materials we need and the people as well. Last year there was a brick shortage because production increased and manufacturers could not respond quickly enough. Now, manufacturing has increased, so we are just about keeping up with demand.
“Meanwhile, the recession saw a lot of people leaving the industry and not many have come in to replace them.”
Persimmon, which currently has around 400 active sites in the UK, said visitor levels were up 10pc so far this year against the same period a year earlier.
Mr Fuller said the housing bubble had been “talked up”, with some areas in the region –including Great Yarmouth – seeing no price growth at all.
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