A study by the London School of Economics (LSE) shows that new housebuilding has little to no impact on local house price patterns.

The report, titled 'Understanding the Local Impact of New Residential Development' was jointly commissioned by Barratt Developments and the NHBC Foundation.

The five year study addressed the question of whether a new development will always reduce prices or reduce the rate of increase in prices for the surrounding area.

The report looked at the impacts of eight recent Barratt developments on their local areas, with the selected sites involving fewer than 300 units.

Research found that house price changes can stabilise or even increase prices in the immediate areas once development is complete.


For sites where there was a high level of opposition throughout the planning and construction stage, opposition tended to decrease once the development was completed.

No evidence of longer-term negative impacts was found.

Neil Smith, Head of Research and Innovation at NHBC, said: "Few would argue that the UK needs to build substantially more homes to avoid a housing crisis, but despite this, local opposition remains one of the main obstacles to achieving this.

"While there are clearly a number of factors affecting property values in specific areas, this research challenges the assumption that new build developments will adversely affect local house prices."

Barratts' Group Land and Planning Director, Philip Barnes, said: "One of the understandable fears of new development is that it might adversely affect existing house prices in a local area.

"We were keen to understand this potential impact and with the NHBC Foundation jointly commissioned research by the London School of Economics.

"Whilst this is a small sample it is reassuring that new housing developments appear to have little discernible impact on local house price patterns, indeed in some areas can boost local market confidence."

(LM/MH)