It’s not all bad news, say South West accountancy specialists for property.
Plummeting house prices, declining land values, and massively reduced home-sale transactions are not totally “bad news” for the South West region, according to property and construction specialists at one of the region’s largest accountancy firms.In the residential sector, the current market conditions offer an opportunity to address the region’s dire housing crisis, and its need for more affordable and social housing to provide homes for key workers in both public and private sectors.
This is the view of David Savill, head of the Property & Construction team at Bishop Fleming, the accountancy firm with the widest spread of offices throughout the South West.
“The market downturn could encourage private house-builders to transfer their land-holdings and skills to accelerate the delivery of social housing, so badly needed in this region”, said Mr Savill.
The South West was allocated the biggest funding increase of any region in the UK for the provision of social housing in last Autumn’s funding review. A total of £789 million is due to be spent on social housing by 2011.
“The South West has the country’s biggest housing crisis, with the largest affordability-gap between average house-prices and average earnings – and the biggest gap between the demand for new homes (30,000 per year) and delivery (currently less than 10,000 per year). I can only see this crisis worsening over the next few years”, said Mr Savill.
“So the figures demonstrate that this region has strong demand for new homes and has access to funding that is not affected by the credit crunch. House builders need to be imaginative in their dealings with the social housing sector”, he suggested.
But the South West’s resilience to the current national property downturn is not limited to the residential sector.
“There is clear evidence that parts of the region are bucking the general trend for commercial property. There is still activity along the M5 /A38 corridor”, said Bishop Fleming’s David Savill.
“The TV mantra – ‘location, location, location’ – is entirely true for the commercial property market. The South West has a strong appeal for investors and occupiers – from offices to distribution warehouses”, he added.