High London prices see builder Crest Nicholson move to suburbs

[LONDON] British housebuilder Crest Nicholson plans to build more homes in London's suburbs because buyers are struggling to meet sky-high prices in the centre of the capital, it said on Tuesday.

The company, which reported a 32 per cent rise in pretax profit for the year to October, said it expected to be building around 400 houses in London a year by 2018-19, up from around 200 now, but that a larger proportion would be on the outskirts.

"Whilst this year we're selling in zone one (central London), towards the end of this year we'll be selling homes in Peckham, in Sydenham, in West Wycombe," chief executive Stephen Stone told Reuters, referring to areas progressively further from the centre.

Many Londoners, unable to afford to buy in central districts where foreign investors have helped push up prices, are looking further afield, where houses cost less, although prices are rising faster.

In a bid to help buyers across the country, the government has set up a scheme to lend up to 20 per cent of the value of a new home, provided the rest of the purchase is covered by a mortgage and a five percent deposit.

From early this year, the government will lend anyone buying a new home in London up to 40 per cent of the purchase price.

Crest Nicholson built 2,725 homes in south Wales, London and southern and eastern England in the year to October. It made a pretax profit of 154 million pounds (S$313 million), and said it was on track to build 4,000 homes a year by 2019.

REUTERS