Posts with tag: house building

Only a Huge House Building Scheme Will Keep Housing Under Control, says NAEA and ARLA

Published On: January 5, 2016 at 3:04 pm

Author:

Categories: Property News

Tags: ,,,

The National Association of Estate Agents (NAEA) and the Association of Residential Letting Agents (ARLA) have responded to ministers over the housing crisis. They believe that the only way to control the property market is through “a massive house building programme”.

The call is included in the organisations’ response to a Government consultation on housing.

Only a Huge House Building Scheme Will Keep Housing Under Control, says NAEA and ARLA

Only a Huge House Building Scheme Will Keep Housing Under Control, says NAEA and ARLA

The document states that to increase the supply of reasonably priced homes, finance, land, time and skill are necessary.

“We need to stop thinking of housing policy in five-year election cycles and adopt a long-term approach to this critical issue,” it argues.

The response lists a number of measures that would help increase the amount of affordable homes.

It notes: “Bricks and other materials must be ordered a year before a home can be built and the UK needs skilled workers to ensure that properties are built to a high standard.”

It says that homes must be built on “suitable land that is located along existing transport corridors” and the “supply of reasonably priced housing coincides with infrastructure improvements”.

The groups also urge these homes to be built alongside “schools, hospitals, local shops and green spaces”, and believe better use of “unused public sector land” would benefit the market. This has been pledged in the latest Government starter homes scheme: /house-builders-respond-to-governments-latest-home-building-plans/

Once the homes are built, the NAEA and ARLA insist that “people need support in accessing finance to purchase property”, as house prices still exceed wages.

On private rental sector improvements, the document states: “ARLA believes that full mandatory Government regulation of sales and letting agents is the quickest and most effective method to eliminate unprofessional, unqualified and unethical agents from the rental market.”

“We think increasing supply of rental properties and raising standards across the industry must go hand-in-hand,” it adds.

The response – to the House of Lords Select Committee on Economic Affairs Inquiries into the Economics of the UK Housing Market – also warns against rent controls, claiming that if limitations on rent increases were introduced, landlords would start new tenancies with higher rents to prevent losses.

It says: “Higher rents would be essential to ensure mortgage payments and maintenance costs could be met.”1

1 http://www.naea.co.uk/media/1043996/naea-arla-response-to-house-of-lords-inquiry-into-economics-of-uk-housing-market.pdf

 

 

 

 

Property Professionals Believe Osborne’s Plans Won’t Work

Published On: December 18, 2015 at 12:06 pm

Author:

Categories: Property News

Tags: ,,,,

The majority of property professionals believe that Chancellor George Osborne’s plans for the housing market, as announced in the Autumn Statement, won’t work, with 57% stating that they will have a negative effect on the industry.

Property Professionals Believe Osborne's Plans Won't Work

Property Professionals Believe Osborne’s Plans Won’t Work

Experts believe that consequences could be: lack of confidence in the market; unachievable house building targets; and limiting the supply of rental property.

These findings are the result of a survey of 570 property professionals by specialist recruiter Deverell Smith.

Even most of the 21% that believe the measures will have an overall positive impact on the sector think that to create an affordable market means that other areas will take a hit.

Just under two thirds (66%) of respondents do not believe that the house building targets are achievable, while 58% think the extra 3% Stamp Duty charge for buy-to-let investors and second home buyers will restrict the supply of rental homes.

The biggest concern for the majority of experts is the long-term effect on private, smaller landlords and whether they will be forced out of the market, leading to more institutional landlords that offer higher prices to tenants.

Many professionals feel that the tax increase will have a positive effect on existing landlords, as a limited supply will increase rents. However, this will not benefit the many private renters in the country.

The firm’s Andrew Deverell-Smith comments: “With property playing such a vital role in our economic growth and the welfare of our society, it is understandable that it is a big focus in George Osborne’s latest plans.

“These opinions are from leading property industry experts who know and understand the market, and this highlights that there is a gap between expert industry estimations and Government strategy.”

He continues: “There are so many facets to the industry that a change in one area will always impact another. There is clearly no silver bullet.

“As a property recruiter, we know first hand not only of the shortage in construction workers, but the project managers, planning and surveyors required to deliver these ambitious housing programmes.”1

1 http://www.propertyindustryeye.com/osbornes-plans-for-housing-wont-work-say-almost-6-in-10-property-professionals/

House Price Forecast for 2016

Published On: December 4, 2015 at 4:35 pm

Author:

Categories: Property News

Tags: ,,,,,

UK house prices are set to rise by between 4%-6% in 2016, as growing affordability issues and the chance of an interest rate increase slow the property market, according to Halifax.

The mortgage lender found that demand for homes has risen in recent months, but the amount of properties coming onto the market has remained at a record low.

Surveyors and property portals have seen a shortage of homes for sale, which is pushing up prices. They report a vicious circle, as prospective vendors wait until there are more homes up for sale before putting theirs on the market.

The Halifax report is the first 2016 forecast to be published by a major lender. Its Housing Economist, Martin Ellis, says there is little reason to expect the trend to change in the coming year.

House Price Forecast for 2016

House Price Forecast for 2016

“As a result, the substantial imbalance between supply and demand is likely to persist, maintaining upward pressure on house prices in 2016,” he adds. “On average, UK house prices look expensive compared to incomes, but valuations are supported by the low levels of property for sale, low levels of house building and exceptionally low interest rates.”

However, Ellis does expect growth to drop from its current level.

Halifax’s latest monthly house price index put the average property value in the UK at £205,240, a 9.7% rise on the same period last year.

For next year, Ellis says national growth is expected to slow to between 4%-6%, adding more than £12,000 to property prices at the top end of the market.

In London, he predicts the slowdown will be sharper. House price growth in the capital has already eased since autumn last year, when Halifax’s index put the average annual increase at 21%. This autumn it fell to 13% and Ellis expects growth to drop to single figures in 2016.

He says the national decline will be fuelled by continuing affordability problems, which have caused prices to rise the equivalent of 5.31 times average earnings in the UK and those in London hitting a record high of 7.96 times wages. And despite mortgage rates sitting at new lows, buyers must save much larger deposits to secure a loan.

He states: “With house prices continuing to increase more quickly than average earnings, it is increasingly difficult to get on the housing ladder.

“This ongoing development, combined with the growing prospect of an interest rate rise, should start to put the brakes on house price growth during the course of 2016.”

Halifax’s monthly data is based on mortgages it agrees each month, adjusted to reflect the sale of an average home. Rises have surpassed the 3%-5% predicted by the bank a year ago, the result of interest rate rises being postponed, the continued decrease in the cost of mortgages and a lack of supply.

Further into the future, Halifax expects growth to sit fairly in line with earnings, which have started to pick up recently. However, much will depend on whether the Government fulfils its promises to build more homes.

Ellis says: “Levels of house building remain well below those required to keep up with the pace of household formation, but we do expect improvements over the medium term. An upward trend in house building would help to bring demand and supply into better balance, helping to constrain upward pressure on house prices.”1 

Halifax’s forecast for next year is in line with the prediction released by the Office for Budget Responsibility (OBR). It expects growth of 4.8% in 2016, followed by a similar rise in 2017.

However, the OBR says changes to landlord taxes added uncertainty to its predictions. In April, buy-to-let investors and second home buyers will be charged an extra 3% in Stamp Duty. Read more here: /16883-2/

The changes could cause a rush in activity before the hike is introduced, pushing prices up in the short term.

1 http://www.theguardian.com/society/2015/dec/04/uk-house-prices-set-to-rise-further-as-demand-outstrips-supply

 

George Osborne Pledges Housing Fund

Published On: November 25, 2015 at 1:11 pm

Author:

Categories: Finance News

Tags: ,,,,,

During the Autumn Statement and Spending Review today, Chancellor George Osborne is pledging a huge new fund for housing.

George Osborne Pledges Housing Fund

George Osborne Pledges Housing Fund

The Autumn Statement details Government spending plans for up to 2020, including billions of pounds in cuts.

Alongside £20 billion in cuts to Whitehall budgets and £12 billion in welfare cuts, Osborne is promising around £7 billion for house building, in a bid to build over 400,000 affordable homes in England.

The combined Autumn Statement and Spending Review has been under way since 12:30pm today. It sets out departmental spending limits for the next five years and gives details of the Government’s taxation and deficit reduction plans.

Osborne is addresses the “crisis of homeownership in our country”, pledging a “bold plan to back families who aspire to buy their own home”1.

The Treasury announced that Osborne would reveal “the biggest affordable house building programme since the 1970s”1.

This will include:

  • £2.3 billion for developers to build starter homes for first time buyers, who will receive a 20% discount on properties worth up to £450,000 in London and £250,000 elsewhere.
  • £4 billion to build 135,000 Help to Buy: Shared Ownership homes for households earning under £80,000, or £90,000 in the capital.
  • £200m for 10,000 new homes for tenants to live in for five years at reduced rents while they save for a deposit. They will then be given the first right to buy the home.
  • £400m for 8,000 specialist homes for the elderly or those with disabilities.

The Executive Chairman of the Home Builders Federation (HBF), Stewart Baseley, reports that recent attempts to fuel housing supply are beginning to take effect and the latest house building statistics for England are “very encouraging”1.

However, Labour claims that the Conservatives’ house building record since 2010 has been a “failure on every front”1, with homeownership at the lowest level in a generation and a halving in the amount of affordable homes to buy.

The Shadow Housing Minister, John Healey, says: “If hot air built homes, then Conservative ministers would have our housing crisis sorted.

“A matter of weeks ago, the Housing Minister promised a million more homes, now George Osborne is saying they’ll build 400,000 more. Rather than rate them on what they say they will do, people will judge them on what they’ve actually done.”1

1 http://www.bbc.co.uk/news/uk-politics-34915218

 

 

House Prices to Rise by 10% Next Year

Published On: November 20, 2015 at 10:38 am

Author:

Categories: Property News

Tags: ,,,,,

House Prices to Rise by 10% Next Year

House Prices to Rise by 10% Next Year

Annual house price growth is currently standing at 9.4% and is set to increase by a further 10% next year, according to Hometrack’s latest report.

The Hometrack City Index monitors house prices in 20 UK cities. It found that Glasgow, Manchester and Liverpool are currently experiencing their highest rates of annual house price inflation since 2007, at 8.3%, 7% and 5.1% respectively.

In Glasgow and Manchester, property values have been recovering in the last three years, while in Liverpool, prices continued falling until early 2012 and are still 13% below peak level.

However, these figures contrast greatly to London, where house prices have soared by 70% since 2009.

Hometrack revealed that the highest rate of annual growth was recorded in Oxford at 12.8%, followed by Cambridge at 10.7%.

The only city to see house prices fall is Aberdeen, where they dropped by 0.8% over the past year.

Another property market report, from Your Move and Reeds Rains, found that rents decreased in October to an average of £806 per month in England and Wales.

This is down from September’s record high of £816 a month.

However, annual rent price growth is still positive, at 4.7%.

A third report, focused on house building, revealed that 135,050 homes have been built over the last 12 months, a 17% rise on the previous year.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Housing Minister Reveals New House Building Target

Published On: September 21, 2015 at 4:57 pm

Author:

Categories: Landlord News

Tags: ,,,,

The Government has revealed that it has set a target of building one million homes in England by 2020, as the housing crisis worsens.

The National Housing Federation (NHF) estimated that 974,000 homes were needed between 2011-14. However, data from 326 councils shows that just 457,490 were built.

The Housing Minister, Brandon Lewis, says that the Government aims to create one million new homes during this Parliament, but the Labour Party insists the Conservatives have failed on housing.

The NHF says around 245,000 new homes are needed every year in England.

Director of Policy and External Affairs at the NHF, Gill Payne, explains the need: “In some areas there is a drastic shortage causing prices to soar, putting homes out of the reach of many people.

“Families and young people across the country are crying out for genuinely affordable homes so they can put roots down and achieve their dreams of owning a home.

“Skyrocketing rents and ballooning house prices are eating up more and more of people’s wages and forcing people out of their local communities or into smaller, lower quality housing.

“We haven’t built enough homes in this country for decades, and if the gap between the number of households forming and the number of new homes being built continues to grow, we are in danger of not being able to house our children.”

Several factors have been blamed, from planning procedures being too slow to developers holding large sections of empty landlord, but not building on it.

In 2012, the Government introduced changes to the National Planning Policy Framework, hoping to make the planning process easier and quicker.

In 2014, 240,000 planning applications were given detailed permission, compared to 158,000 in 2011.

However, critics have said the change made it easier for “inappropriate and unwanted”1 developments to progress.

They also believe the rise could be due to low numbers of applications caused by the financial crisis in 2008.

Housing charity Shelter says a shortage of land was the reason for low levels of planning approvals, while others have turned on developers that build slowly.

Property Economist at Capital Economics, Matthew Pointon, explains that by keeping the number of new homes available low, the price of these properties can be set high.

Earlier in the year he said: “By building them more slowly it means they [the developers] can maximise the value of their assets.”2

Other reasons include a shortage of skilled labour, a huge drop in the amount of councils building new homes and regulations limiting housing associations.

Homes of the future

Dr Philip Oldfield and the Sustainable Tall Buildings Design Lab at the University of Nottingham have been working on the types of homes needed to meet housing shortages in the next 40 years.

They have come up with ideas for the new houses we could see in 2050.

They have developed alternative schemes, from vertical villages to flat pack housing.

The university’s Dr Mark Gillott says: “We need the ability to provide housing en masse, there is a huge housing crisis at the moment.”3

Lewis wants to make it “easier” for people to develop, “especially on brownfield sites”.

He adds that further changes to planning rules would form a “principle of development” on brownfield sites, helping councils decide whether or not to grant permission.

The Campaign to Protect Rural England calculates there is enough brownfield land to build 1.8m new homes.

Lewis continues: “Ultimately, it is up to local authorities to look at what their housing needs are and where they feel it is appropriate to build. I trust local people to get that right.”3

He says schemes like Help to Buy, through which the Government helps first time buyers, should give developers the confidence that their homes will be sold.

Payne reports that the NHF would like housing associations to build more.

She says: “Last year, housing associations built 50,000 homes, 40% of all new homes across the country, and they have ambitions to work in partnerships with Government to vastly increase this.”3

John Healey, Labour’s Shadow Housing Minister, adds: “Ministers making big promises about homes in the future won’t wash anymore.

“People have seen five years of failure with Conservatives in charge of housing.”3

1 http://www.bbc.co.uk/news/uk-politics-30489929

2 http://www.bbc.co.uk/news/magazine-30776306

3 http://www.bbc.co.uk/news/uk-england-34209027