Research carried out by Nottingham Trent University has shown that new-build properties may be making owning a home in the UK more unaffordable, despite it being widely believed that properties of this type actually help to stem an unsustainble growth of house prices.
Dr Alla Koblyakova, part of the university’s Real Estate Economics and Investment Research Group, conducted a market behaviour study which found that for every 1% rise in the supply of new homes, mortgage payment to income ratios in the UK deteoritate by 9%.
Dr Koblyakova said of the findings: "The Government thinks that by increasing the supply of new homes, the overall cost of owning a property will come down. But this research shows us that the mortgage market behaves differently. When new housing comes on to the market, lenders relax their conditions and lend more money. And when consumers are more able to buy a property for a higher price, the price of property doesn’t come down."