Higher density living is on the increase as the government tries to squeeze more households into smaller homes and an analysis by Wolsey Securities showed the average new home plot size continues to shrink.
Wolsey observes that average plot size has decreased from 988 sq. ft. to 973 sq. ft. in the last 12 months, reflecting both government planning policy for higher density and the growing trend for apartment-style living.
Over the last 18 months the proportion of flats across the portfolio has increased to 61 per cent while the proportion of detached houses has decreased to just 16 per cent. Two factors are contributing to the high levels of new-build apartments being built at the expense of the detached house. Firstly, Government is demanding 200,000 new homes to be built each year and planning policy (PPG3) is demanding greater levels of density on Brownfield sites – more homes on less land, which is most achievable through apartment developments.
Secondly, we see a trend towards apartment-style living. Apartments at accessible prices have an appeal to first-time buyers who want to get a foot on the housing ladder. Also, with the increase in people choosing to live alone, be they singletons or divorcees downsizing, quality apartment-style living has become an increasingly popular option.
Mike Ratcliffe, chief executive of Wolsey Securities, commented: “As a result of the government demanding greater density, which is most achievable through apartments and least achievable through building detached houses, we are seeing an increasing proportion of apartment schemes coming through in the market.
“This drive to increased density is not necessarily market-led but dictated by the government, and as a consequence has resulted in a state of oversupply of apartment accommodation in certain markets to the detriment of more traditional housing. The profile of our portfolio reflects the forces at work, but we are watchful of ensuring the apartment schemes we invest in are not in locations where we consider there is oversupply.
“Developers need to build an extra 50,000 homes per year to meet government targets. This is dependant on land coming on to the market and nothing should be done in terms of legislation to threaten the flow of viable opportunities; particularly on brownfield land which accounts for over 80 per cent of the developments we are funding on behalf of smaller independent housebuilders.”
