An interesting little row has broken out between two key monitors of the London resi market.
Agent Savills has put out a thinly veiled attack on a report by London Residential Research's report, which can be read here - covered by EG a few weeks ago.
The gloomy Red Book report said there had been a "horror show" in the capital's residential market over the last year, with nearly 10,000 homes left empty.
Not the case, says Savills, citing a mere 916 as the number of completed unsold units.
Although, as somebody much wiser in property once told me - when the agents start saying the market is on the up, there's probably about six months still to go.
The difference between the two conclusions is immense - I've copied the Savills' statement below for you to make your mind up on....
UNSOLD FLATS WILL NOT DEPRESS THE MARKET FOR LONG
Tales of our cities being full of vast tracts of empty, newly built apartments for sale are misleading, and commentators who think that an oversupply of new housing will depress the market and keep prices falling across the board are wrong, says Savills Research. Their latest analysis shows that recent reports that 10,000 newly built units lie unsold and empty in London overstate the reality by a factor of ten, according to Yolande Barnes, head of Savills Research.
Figures for the first quarter of this year show that there are 29,000 units for sale and/or under construction, so-called 'committed stock', in the greater London area. Of these, one-third have already been sold 'off plan' and another third are not yet for sale. The remaining 9,844 new units that are currently for sale are mostly being sold 'off plan' and are not yet complete. Only 916 of the units are habitable and on completed schemes and can therefore be described as standing empty and available.
A very conservative estimate is that, in the context of 2008 rates of new build sales, this represents a mere two months' supply. The balance of units for sale that remain under construction represent the supply for a further eighteen months at most. Some of them are on schemes that were always planned to be phased over a number of years and will take longer than this to complete, while a few are on schemes where construction has been temporarily halted.
"These figures highlight the difference between committed stock (that is units that have to eventually be built and completed) and 'ready to occupy' stock (that is units that are complete and for sale)", says Barnes. "Both of these figures, when put into context of the number of units that people buy in London in a year, point to a looming shortage rather than a looming glut of properties in many boroughs - although there are notable exceptions where a potential oversupply is an issue."
"That there are issues for developers in a market constrained by the availability of credit, both for developers and buyers, cannot be denied", says Barnes. "However, in a market that is beginning to see a restoration in the balance of supply and demand - an indicator of the very early stage in its recovery - and with forecasts for housing delivery in London well below anticipated demand, it is important for statistics regarding new build units to be read accurately and in context."
If there is a row, LRR isn't aware of it, and we're also not sure where the figure of 10,000 unsold homes comes from - certainly not from LRR or the Red Book. Our figures show that there were nearly 8,500 unsold homes which completed last year, but of these only 1,500 were launched (also in the figures). Readers should also note that Savills is quoting figures ("916 empty and available") for the first quarter of 2009, and LRR is quoting 2008 stats. The numbers aren't really that far apart...