Housing Needs Assessment 2006 - Westminster City Council

5. The local housing market(iii) New build pricesEstate agents commented that there are few new build developments in the area, and so getting anew build property on their books was very rare. In particular, there are very few four bedroom newbuild properties so these prices have been estimated using experience and knowledge FordhamResearch has gained by conducting many housing needs assessments.Table 5.5 Average new build pricesin WestminsterProperty size Average price1 bedroom 425,0002 bedrooms 510,0003 bedrooms 650,0004 bedrooms 825,000Source: Survey of Estate and Lettings agents (2006)5.5 Appropriate price level for the affordability testHaving established minimum and average prices in each of the four size categories it is necessary todecide what price level is the most appropriate to use for assessing whether or not a household isable to access the housing market. It is necessary to consider two aspects:• The appropriate measure of price (e.g. minimum or average prices/costs)• How to deal with a situation where price variations have been identified within the CouncilareaOn the first point, we use the minimum prices collected in the estate agents survey, since these havebeen designed to represent the ‘entry level’ into the housing market. For consistency we will alsouse minimum private rental costs as part of the affordability test.ODPMGuide‘The most commonly used affordability test involves comparing estimated incomesof unsuitably housed households against ‘entry level’ house prices.’ [Section 4.3(page 57)]‘…approaches which compare maximum prices payable against average houseprices are certainly questionable.’ [Section 4.3 (page 57)]PAGE 57