I don't think it will allow any new houses from what I have been told, those of us who still have houses have been reluctant to drop them (to resize/change) as they show as improperly placed. It will be interesting to see if the new island design affect us at all.
Speaking of which, I am increasingly curious how the rebuilding of "New Magencia" will play out. The question remains if it will follow established Ultima lore (from Ultima Prime as the Devs frequently refer to it) making it into a "humble shepard village" or instead an even more magestic place with the assistance of the Gargoyles and their resources/tools etc.
http://uo.stratics.com/content/atlas/magincia.shtml
* Since Ultima Online seems to be positioned between Ultima III and IV on the timeline, Magincia has not yet been destroyed and is known as the city of Pride instead of the city of Humility
Note: The above Stratics page was created back BEFORE the recent destruction event(s).
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http://ultima.wikia.com/wiki/New_Magincia
New Magincia, located in a small island, became City of Humility, as it was built on the ruins of old Magincia, a rich, prideful port that was destroyed by demons. When it was rebuilt as New Magincia, it became a humble shepherd village. The Shrine of Humility is located near the city.
http://ultima.wikia.com/wiki/New_Magincia
Somewhere, out beyond civilization, is also reputed to lie the ruins of the legendary town of Magincia, which the gods destroyed for the insufferable pride of those that dwelt there. All of the marble palaces and gardens were devastated, and the right, haughty inhabitants reduced to haunting spirits. No one has ever confirmed this legend, so it may just be a fable to frighten the weak of the heart and instill humility in those who overvalue their own worth.
- from "The History of Britannia", Ultima IV
A towne built on the ruins of old Magincia by a colony of humble people who understand well the dangers of false, self-serving pride and the beauty of humility. New Magincia has a healer and a restaurant tucked among its numerous modest farms and orchards.
- from "Book of Lore", Ultima V
Having been destroyed in ancient times for its haughty pride, New Magincia was rebuilt by a more humble people who favored the simple ways of farming and rural life. With the passage of time, an industrious village has grown atop the ruins of the old town. Those who would revel in their own pride should take special note of the lesson of New Magincia.
- from "Compendium", Ultima VI
New Magincia is known as the City of Humility, and hence it chooses to remain isolated from much of the rest of Britannia. If thou venture there, thou will find that the people are basically shy, but also warm and hospitable once they have gotten used to thee. The city is located on an eastern island well past most of the main trade routes. Time progresses more slowly in New Magincia than anywhere else in Britannia. The economy of New Magincia is based on shipbuilding, horticulture and raising sheep.
- from "Fellowship", Ultima VII