Map of the month

A record high of 210,000 new households will be formed in 2007 but on average people still only move just once every 18 years. These slightly contradictory findings come from the Chartered Institute of Housing’s Annual Review of UK housing and from property data company Hometrack respectively. According to Steve Wilcox, the author of the CIH report, the figure of 210,000 is explained by increased immigration, with the number of transactions remaining low due to the higher proportion of smaller family units being constructed.

Richard Donnell, Hometrack’s director of research, believes that, as well as the increase in demand for housing from new households, the low levels of turnover in the market will keep prices strong (see map below). As a result he expects that house prices will continue to grow at 4% in 2007. “In the 1980s turnover averaged 9% which meant that people were moving once every 10 or 11 years. Now this figure has grown to once every 18 years, it presents an interesting question for housebuilders: where are they going to find their buyers?”

Donnell adds that the breakdown of where turnover is high and low across England and Wales can be exploited by canny housebuilders who build homes to reflect local demand. However he also points out that they will have to be wary of the government demand for more family homes as opposed to single-bedroom flats.