Each quarter Standard & Poor financial consultancy DRI updates regional housing forecasts for the current year and the next for housing transactions, starts and prices – exclusively for plastics manufacturer Wavin.
DRI scores each region's housing economy, marking one star for worst performer, five stars for best. DRI uses its own econometric model which responds to 30 pointers, such as industrial orders, employment levels and net reservations. Building Homes publishes this profitable information on a regular basis as the Osma Regional Housing Forecast.

2001 Second update: Key findings and forecasts

  • In the West Midlands house price gains are forecast to slow rapidly this year as demand eases. Average property values are predicted to gain 4.3%, less than half the rate of growth recorded over last year. Property transaction growth is expected to fall by 6% over the coming year.

  • Greater London is expected to have a year of more stable trading, with average house price growth expected to come in around 8.6%, above the UK average of 4.1% but well down on last year's 17.5%. Transactions are predicted to fall 6.5% over the year.

  • Demand is set to slow in the prosperous South East while price growth stabilises. Transactions are expected to fall 6.0% while average regional property values are anticipated to grow by 6.3% this year. Private housing start levels are forecast to dip 3% in 2001, the fourth successive year of decline.

  • In Wales the message is steady progress, with house price inflation predicted to ease slightly to 4.6% rising above the UK average (4.1%) for the first time in five years. Demand conditions are expected to fall slightly over the coming months, with transactions predicted to be down 4.6%.

  • Yorkshire and Humberside is set for slow progress with house price growth decelerating to 2.4%.

    Housing market strength
    Market conditions are continuing to stabilise across the UK. The ratings for Northern Ireland and Scotland are each upgraded by one star, while the North's rating grows by two stars. Greater London has lost a star and the West Midlands drops from above to below average.

    Property transactions
    Transactions are expected to stay below last year's peak, despite further reductions in the cost of borrowing. The year has got off to an unfortunate start, with foot and mouth disease slowing activity. Overall, DRI now forecasts transactions to dip 4.3%.

    Private housing starts
    Start growth will remain depressed due to factors including: problems in freeing up land, rising economic risks dampening some investment, and continued pressure on labour, materials and other costs. DRI forecasts a 2% fall in start growth this year.

    House prices
    This year DRI is forecasting house price growth to decelerate further to 4.1%, with 2002 growth predicted to show a slight improvement to 4.7%. The divergence in property price gains across the UK will narrow as growth slows quickly in southern regions.

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    Building Homes