The Journal is reporting today that 1,000 building projects have been shelved in the North East of England.
The region appears to have been hit the hardest by the house building slowdown, with a 6% drop in the number of new homes and businesses being set up there, the biggest decrease in England. To make issues worse for developers, cash-strapped councils are asking all new developments to incorporate community build projects, such as new roads or a children’s play areas, increasing the cost of developments.
Andrew Whitaker, of the Home Builders Federation warns, “Areas like the North East are likely to face a significant drop in the number of homes built... Developers cannot just be building houses on spec as there is a serious problem faced by potential buyers in getting a mortgage. Councils will now have to accept that they are not going to be able to take so much money off developers in the form of Section 106 agreements. This goose that laid the golden egg for them has been cooked.”
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