The stagnation of the housing market and a lack of new build starts could result in a severe shortage of housing in the south east next year, says a new report from Knight Frank.

New build starts are expected to be the lowest since the 1950s and this combined with the lack of supply in the second hand market could lead to a real shortage of properties for sale next year. John Neale from Knight Frank pointed out that if developers get it right now they could be in a good position come 2010: ‘Developers who opt to move now may be in the position of being able to sell into an undersupplied market next year. However, they need to be very cautious, opting to deliver in-demand family housing into those areas with resilient housing markets. Elsewhere a greater number of forced sales could undermine this strategy.’

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The good opportunities out there are being pounced on according to the new research – Hugo Stuttaford from Knight Frank added: ‘It may be that we are seeing the first stages of a recovery in the land market but for the best sites only.’

Family housing, however, is the focus for most active developers in the immediate future: ‘Regeneration sites or those with consent for flats attract little interest,’ the report notes. New models must be found for regeneration schemes, or more Greenfield land must be released for development or there will be a terrible shortage of housing in the coming months, the report seeks to stress.

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