A decade after the North East saw a record low number of new homes being built, housebuilding in the region is positively booming.

Construction building frame

Source: Shutterstock/ Trong Nguyen

In 2010, just 4,510* new homes were built in the North East. This was a knock-on effect of the 2008 crash when many housing developers abruptly stopped buying land. New homes numbers have risen very slowly since then – reaching 8,870* in 2019, which almost matches the last peak seen in 2007 of 8,920* homes.

It is rational to assume that the economic impact of the pandemic and its threat to people’s jobs would have dampened the housing market. Yet quite the opposite has transpired.

Why? Well, a number of different factors have married to create the perfect storm for driving-up demand for new homes. And the rise in working-from-home is one of them.

Undoubtedly, the stamp duty holiday and the government’s Help to Buy scheme have been a significant stimulus for the market. This coupled with an abundance of people locked-down in their homes for months (pondering their next house move or extension) has seen some housebuilders pull out all the stops to accelerate their build programmes.

“Of course, there was negative disruption caused by the first lockdown in terms of restrictions on people’s movements and some delays to construction,” says James Platts, residential land specialist at Knight Frank.

“People couldn’t do viewings or visit show homes but the upside was, people had additional time to think and browse the internet. And - as it turns out - many were sick of seeing the same four walls and were thinking of moving.”

North East family-run housebuilder, Cussins, which was established in the 1920’s and is responsible for many of the region’s most prestigious addresses, is enjoying a heyday. The firm even switched some of its builds to timber frame construction to ensure they are completed by the March 31 stamp duty holiday deadline.

The speed of the build is around 30% quicker with timber, compared to a brick build. This is because a timber frame can be partly pre-cut, modulated and built to precision. Time is also saved on clearing away less building debris.

Land director at Cussins, Steve Willcock, talks us through the last 12 months: “The first two months of 2020 were very positive, with buyer confidence at a high after the election.

“The Coronavirus pandemic immediately impacted both production and sales, with many of our key suppliers closing down and mortgage valuations halted. By late spring, some semblance of normality returned with suppliers re-opening for business and the backlog of mortgage valuations swiftly resolved.

“Since that time we have seen a surge in sales interest which far exceeded our recovery expectations. There is some evidence that this is partly attributable to purchasers placing a higher value on common features of our homes which include: additional space for home working; larger gardens; and more rural locations.

In recent years we have seen increasing sales to buyers moving north to retire. Post Coronavirus the trend has increased, with the draw of Northumberland’s quality of life and affordability proving as attractive as ever.

First time buyers hit

“Life hasn’t been easy for first time buyers. After the Coronavirus outbreak, many lenders were quick to adjust Loan to Value rates which in turn required first time buyers to raise significantly larger deposits. Thankfully, we are now seeing a healthy return to more accessible levels of mortgage finance. Mortgage availability for first time buyers is so important - not just because it presents the ability for people to own their home - but because they also form a critical part of forming stability within the housing market,” says Steve.

Residential land supply

The availability of land across the North East is tale of mixed fortunes says Sandra Manson, senior director at built environment consultants, Pegasus Group:

“Whilst strategic sites identified by numerous Local Authorities and a large quantity of extant planning permissions across the region could lead to the impression that there is sufficient land to meet housing need, the reality does not align with the situation on the ground.

“Issues include consents in areas that the market and consumers do not necessarily want to build/buy in and large strategic sites which come with significant complexities and challenges to delivery. Throw in restrictive planning policies, including tight Green Belt boundaries across a lot of the region, and the availability of land that can meet the next raft of housing need is looking scarce. This is, and will continue to be, a challenge if we want to maintain housing supply which is critical to our economic and infrastructure success as a region.”

James Platts, partner at Knight Frank, adds: “Since the pandemic we’ve seen a bit of a split – interest in residential land is still relatively high from regional builders but has tapered off slightly from the national firms as uncertainty kicked-in.”

“However, the need to look at medium and longer term strategic land, as well as short term delivery is still essential if we are to maintain the pipeline, which can take years to work through the planning system.”

On the year ahead, Steve Willcock says: “We are always looking for land. We have got quite a few sites in the planning system at the moment so we can maintain our business plan. We’re in a strong position financially to invest in land.”


James Platts comments: “The end of the stamp duty holiday coincides with a scaling back of the Help-to-Buy scheme, as well as the introduction of higher taxes for overseas purchasers and the ending of government support for employers. All of which could weigh on housing activity after March this year.

“What happens with Covid-19 will, of course, have an impact but the arrival of the vaccine is making the horizon look sunnier. What’s pretty certain is that – because of the multiplier effect that moving house has on the economy - keeping the housing market moving will undoubtedly play an important role in supporting the economic recovery.”

Jill Farmer is PR Consultant to Knight Frank (North East England)