The more you scratch the available data on residential development the more astounding seems the transformation in market conditions over 2008.

I was invited to be the editor of The Red Book for this year’s edition. For those not familiar with the book it is produced annually and provides analysis and information on the London new build resi market from drawing on the extensive London Residential Research database of live developments in the capital.

The Red Book is now out, so I am at greater liberty to discuss some of the findings and here are a couple that may catch your interest.
One of the headline figures to emerge was that the stock of unsold completed stock at the end of 2008 was about 8,500 or about 10 times the average level of unsold new build homes in recent years.

That is quite a staggering increase. And if you compared unsold stock at the end of 2008 with the end of 2007 the figure would be far greater. It was fortunate that stocks were very low at the close of 2007.

To get a better handle on the what this means in terms of current rates of sale, we calculated how many homes in the pipeline from start of construction to completion which were at the end of 2008 left unsold or not allocated to rental. (It is worth noting that a large proportion of London homes are sold ahead of completion.)

From the figures on sales rates we worked out that at the rate of sale in 2008 it would take four years to mop up this stock.

One other of the many findings to emerge that caught my interest was that more and more of the potential new build stock in the pipeline is coming through on big schemes and the recession has accelerated this trend.

It is, after all, relatively easier to stop a small scheme than a large one. And many large schemes are already well underway. On top of that it is the large schemes that are getting the real attention from the Homes and Communities Agency.

Now at first sight it may not seem that surprising or that much of a problem that increasing amounts of London’s new housing stock will be delivered through large schemes.

However, when it comes to selling, large sites need to be supported by strong sales rates. And they are a thing of the past.

Who wants to buy into a development that will remain sparely inhabited for years? So after the gargantuan challenge of getting these projects funded and building underway, the developer faces an even thornier job selling the homes.

A big plus for me in doing the work was the reminder, as I ploughed through the wealth of data passed my way by London Residential Research, of why you should be extremely careful of jumping too early to conclusions, especially in the world of construction and property.

I was warned early in my days writing about constrution that things are never quite what they seem in this business.

Here is what I mean. And I will say now that I have included this observation only for the more dataphilic, so if it comes over as tedious, dull or a bit nerdish you have been warned.

There has been much talk of Mayor Boris relaxing the obligations for providing social housing within developments in London – and there are plenty of examples of that happening.

But if you go in thinking that all developers are looking to renegotiate their section 106 agreements downward on social housing you may misread the data.

Because you find that there are cases of the proportion of social housing being raised within schemes.

This may seem counter intuitive if you hold too hard to the notion that the way to increase the margin on a residential project is to reduce the “overburden” of the obligation to make provision for affordable housing.

But if you increase the affordable content on an early phase of a major development, the homes can be built and occupied faster and you are then in a position to boost the proportion of private homes within later phases that are built as the market improves.

From my point of view the interesting thing was that if you examined simply aggregated data for an understanding of how much affordable housing was being “lost” and switched to homes for private sale, you would be misled.