A new report published by Savills highlights that local authorities will need to be proactive in finding development sites for housing in Hertfordshire if the county is to reach its full economic potential.
The research says that if the county is to make the most of its position in the ‘innovation corridor’ between London and Cambridge, then the issue of affordability of new homes needs to be addressed.
The report outlines that 40,000 new homes need to be built over the next five years across the county using the government’s standard method of calculating housing need, though at present the localities are struggling to meet that target, with only Hertsmere and East Hertfordshire delivering homes at a faster rate than the country’s average.
The new growth is likely to be centred around the M1, A1(M) and M11 corridors, with the A414 also in focus, with 50 per cent of homes planned for this area.
Price growth caused by an increase in demand for larger properties with outside space due to the pandemic could begin to start pricing people out of the county, potentially losing part of the workforce, with house prices rising by an average of 4.6 per cent across the county this year, with some areas rising by up to 6 per cent.
Stevenage is the only place in the county where house prices are below the East of England and national average, with St Albans, Three Rivers and Hertsmere having average prices of over £600,000.
Justin Bates, director in the Savills development team responsible for Hertfordshire said “These figures show the strength of the Hertfordshire housing market, but also highlight one of the main risks to the area’s future success.
The county has a thriving economy driven by the life sciences and film and television industries and is at the centre of one of the fastest-growing regions in the UK – but a lack of new housing is threatening continued growth.
A historic delivery shortfall has resulted in one of the greatest affordability pressures in the country. Only Stevenage has an income to house price ratio below the England average. In St Albans and Three Rivers, median house prices are over 16 times median incomes, among the highest of any local authorities outside London. This could seriously hinder economic growth as it will prevent employers from attracting the workforce needed to deliver the area’s potential.
Of course, we have to consider how the government’s plans for ‘levelling up’ might impact the market across the south, but there remains a pressing need to identify sites to build affordable homes. Investment in infrastructure will be crucial to unlocking development, but the county will also require a greater contribution from all of its local authorities.”
Our analysis suggests that six authorities – North Hertfordshire, St Albans, Three Rivers, Welwyn Hatfield, Hertsmere and Dacorum – have not identified enough land for development to meet need. A number of authorities also don’t have an up to date Local Plan in place. This means there are immediate opportunities for landowners.
Hertfordshire is well placed, in terms of both its location and economic strengths, to meet its potential and become something of a regional powerhouse – but local authorities will need to be more proactive in identifying new sites for development. The new homes market across Hertfordshire is typically smaller than the national average, so there is considerable scope for it to increase – especially given the weight of demand for housing across the county.”
See the full report here.
Image source- Savills
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