Areas with higher rates of new development consistently record higher house price growth, according to new research from smartnewhomes, which claims that house building activity can boost the prosperity of a local community.

Using data from the department for Communities and Local Government, the company compared house building levels with average house price growth over the last 1, 3 and 5 years, across all nine English regions.

The firm reports that ‘in all cases there was a strong positive correlation between the number of new homes built in a region and the rate of house price growth. On average over the last year, each region saw house price growth of 0.63% for every 1,000 new homes completed in that area. Over the last three years, the figure was 0.16% and the rate was 0.23% over the last five years.

‘The research shows that house building activity makes a significant contribution to the prosperity of an area, and that NIMBY fears over the financial impact of new homes are unfounded. Developers look to build wherever there is likely to be demand, and their investment typically attracts other businesses and residents to enter the area in turn, boosting the local economy.’

Steve Lees, director at smartnewhomes, comments: “House builders would not apply for permission to build new homes in an area if there was not a demand from homebuyers. I would urge local authorities and communities to recognise the importance of the house building sector in creating thriving communities, and to work to facilitate development for the benefit of all their local residents.”