The Implications of Housing Density and Mix on House Prices Glen Bramley, Neil Dunse, Sotirios Thanos and David Watkins School of the Built Environment Heriot Watt University Edinburgh ERES 2009

Background  Research funded by the National Housing Planning Advice Unit (NHPAU)  The aims of this research are 1.To analyse the implication of residential mix (type and density) upon house prices 2.To simulate viability of alternative residential development schemes.  Densities of new residential development in England have risen sharply in the 2000s.  Tendency to focus upon the construction of either high density apartments or large detached houses (Bramley & Brown 2008). ERES 2009

UK Planning Policy  Planning policy through the 1990s: sustainability and the compact city JRF Inquiry into Planning for Housing (1994) re-use of urban land and increased urban densities Future Homes: Opportunity, Choice, Responsibility (1995 ) set out a target of 50% of new residential development on brownfield land Planning for the Communities of the Future (1998) raised to 60%  PPG3 (2000), introduced a ‘new’ approach to land allocation/availability, based on urban capacity studies overall density target of dwellings per hectare  PPS3 (2006) promotes housing development which provides: high quality housing; a mix of both market and affordable housing (tenure, price and type); housing in suitable locations; effective and efficient use of land, while maintaining the 60% target for brownfield land 30 dwellings per hectare national indicative minimum density. ERES 2009

Housing Density ( ) ERES 2009

Net Density of New Housing by Region ERES 2009

Density and Share of Flats in New Private Development by Wards Types ERES 2009

Literature Review  Hedonic Pricing Literature residents are willing to pay less for houses in neighbourhoods that are dense, contain more commercial uses and multifamily homes (flats).  Song and Knaap (2003 and 2004), Matthews and Turnbull (2007)  Household survey dissatisfaction with area and home was more common in terraced houses and flat and higher densities,  Parkes et al’s (2001), Mohan & Twigg (2007), favour suburban locations (above inner urban, small town, dockland, city-centre locations); houses (of all types) over apartments, and detached/attached houses over terraces planning guidance on density is couched in terms of units and not rooms  nothing to bring a range of unit sizes to the market  tends to reinforce developer preferences for building flats Silverman, Lupton & Fenton (2005) Bramley and Brown (2006) ERES 2009

Hedonic House Price Model where: P sales price of house; S structural attributes and market conditions; E socio-economic characteristics; N ethnic mix D residential density of census area; M house type mix of census area; ERES 2009

Density and Mix Variables ERES 2009

Case Study  Regulated Mortgage Survey (RMS) house price dataset  2005 and 2007 (90666 transactions)  Six case study areas: 1.London North East (Redbridge, Waltham Forest and Hackney) 2.London South West (Hammersmith and Fulham, Hounslow and Richmond upon Thames) 3.Manchester (Manchester and Salford) 4.Leeds 5.Nottingham (Nottingham and Rushcliffe) 6.Southampton (Southampton, Eastleigh, Test Valley) ERES 2009

Case Study Areas ERES 2009

House Type: Results ERES 2009

Density and Mix: Results ERES 2009

Density and Mix: Value ERES 2009

Conclusions  UK planning policy has encouraged high density and polarised house type mix  Evidence to support existing literature High density often associated with a negative premium Preference for detached over other house types Preference for houses over flats(apartments)  First stage: density/mix and residual land values and affordability house price levels and patterns are also relevant to another social policy concern, namely the concern about affordability. ERES 2009