New Developments Have Little Impact on Local Property Prices
One of the main concerns that property owners have when a new development is proposed in their area is that it will have a negative impact on the local housing market. In particular, they often think that it will reduce the value of their home, which can lead to opposition against the developers. However, a new piece of research has shown that this is not generally the case and that new developments have very little impact on property prices.
The study was carried out by the London School of Economics and Political Science for the NHBC Foundation and Barratt Developments. They wanted to assess if new developments always limit the level of price rises or reduce property values in the area surrounding them.
Impact of New Developments
They looked at the effect on the local areas that surrounded eight recent developments and found that property prices had not reduced as a direct consequence of the work. There were sometimes small negative effects during the construction period, but after completion the local property market tended to keep up with the overall sector.
The research took into account a broad spectrum of developments to get an overarching view of the market. They included a range of property types, including town houses with stainless steel balcony railings and detached properties, and were based on rural developments and those that were outside of city centres.
Many of the sites had faced opposition from local residents prior to work starting. The issues raised were often around concerns about property prices. The study, though, showed that there was no evidence that the developments had a long-lasting effect on the value of properties that surrounded the developments. Sometimes prices even increased in the local vicinity after the development was finished. There was even one development that had faced severe opposition before the construction started, but in the end around 50% of those who bought properties on the site had moved there from less than five miles away.
Need for More Properties
As the country faces a continuing shortage of properties, it is vital that new developments can commence quickly and without being held up due to opposition from local residents. This new research shows that one of the biggest concerns homeowners have is actually not an issue once the development is complete. This might only be a small assessment of the overall market, but it does highlight that developments can actually be positive for the local area rather than negative.