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Understanding the local impact of new residential development: a pilot study (RR9)


This project makes a contribution to understanding the impact of new housing development on the immediately surrounding area and population. In particular it addresses the question of whether new development must always reduce prices or reduce the rate of increase in prices.

Summary of content

This report presents the findings of research into the impacts of eight recent residential developments on their local areas.

The project is of necessity a pilot. Every new residential development is unique and there is no possibility of undertaking a statistical analysis that can identify all the different factors that affect prices. Rather it looks to see first whether there is evidence that prices always fall in the surrounding area as a result of new development, secondly whether there are patterns in price changes which appear to be associated with particular types of development and thirdly whether other factors affecting price can be identified.

The sites selected all involve fewer than 300 units and were completed within the last 5 years. It is important, therefore, to note that the impacts observed may well be different around sites which are significantly larger than the ones studied in this project.

In this context we distinguished the immediate area (within 0.3 miles of the site) which on average might include around 200 dwellings and a much broader area (defined by the three/four-digit postcode district surrounding the site).

Some points to stress are that the numbers of transactions over the period of analysis are usually small and many factors other than new residential development affect local house prices. The strength of the evidence therefore has to lie in its relative consistency across different sites.