Posts with tag: housebuilding

Number of additional homes reaches record high, but still behind Government targets

Published On: November 18, 2019 at 9:23 am

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The Ministry of Housing, Communities & Local Government (MHCLG) has now released its report ‘Housing supply; net additional dwellings, England: 2018-2019′.

The report highlights:

  • The annual housing supply in England amounted to 241,130 net additional dwellings in 2018 to 2019. This is up 9% on the 2017 to 2018 report.
  • The 241,130 net additions in 2018 to 2019 resulted from 213,660 new build homes, 29,260 gains from change of use between non-domestic and residential, 5,220 from conversions between houses and flats and 940 other gains (caravans, houseboats, etc.), offset by 7,940 demolitions.
  • 14,107 of the net additions from change of use were through ‘permitted development rights’ (full planning permission not required). These were made up of 12,032 additional dwellings from former offices, 883 from agricultural buildings, 199 from storage buildings, 69 from light industrial buildings and 924 from other non-domestic buildings. 

Chris Sykes, Mortgage Consultant at Private Finance, has commented: “The number of additional homes created each year has reached a new high, outstripping the previous peak seen in 2007-08 before the full effects of the financial crisis hit the market. 

“Insufficient supply has been a longstanding issue for the UK’s property market, pushing up prices and slowing down movement at all levels of the housing chain. Any boost in supply will, therefore, be welcomed by homebuyers, who are already experiencing more favourable conditions thanks to a slowdown in price growth and record low mortgage rates.

“There is still some way to go if the Government is to reach its target of 300,000 new homes a year by the mid-2020s, with more than 86,000 homes still needing to be built based on this year’s figures.

“Whatever the outcome of December’s general election, the next government must ensure reaching this target remains a key priority if affordability is to continue improving for homebuyers.”

Leasehold Reforms are ‘Scandalous’ and ‘Do Nothing’ to Help Existing Homeowners

Published On: July 3, 2019 at 8:30 am

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Housing secretary James Brokenshire unveiled plans to abolish the selling of new houses as leaseholds last week, but campaigners point out that the reforms do not help those homeowners already trapped in the unfair scheme. 

The widely reported scandal has seen leaseholders buying houses with an extra payment for ground rent trapped in the scheme after later finding out that said ground rent would double every 10 years. Many leaseholders have claimed that they were never informed of this rapid increase at the time of sale. They only found out much later when it transpired that mortgage providers refuse to lend on leaseholds and that their homes were now unsellable. 

The Housing Secretary’s proposed plans include abolishing the selling of new houses as leaseholds and the reduction of ground rents to zero. Whilst the plans go a long way to ending this unscrupulous practice, they have come under fire for not helping people already signed up to leaseholds. 

Louie Burns, managing director of enfranchisement specialists The Leasehold Group of Companies, says: “Naturally, we welcome the ban on ground rents for new leasehold houses…ending this exploitative model of home ownership is certainly a step in the right direction.  

“However, there are thousands of people who already own houses on a leasehold basis and these proposals do not remove their obligation to pay ground rents. 

“These proposals do nothing to help existing leaseholders and will create a two-tier market, where the values of leasehold houses will fall further as the properties become increasingly unattractive to buyers. 

“Something must now be done to help those already trapped by the leasehold house scandal, not to mention the millions of leasehold flat owners who are still affected by onerous ground rents, unfair service charges and exploitative informal leases that offer no legal protection. The government now needs to act quickly to help the many people already caught in this trap.”

The government has also said it will address issues with leasehold agreements for owners of flats. 

Burns says: “We see numerous instances where freeholders drag their feet and charge exorbitant fees to provide information, so setting a new statutory time limit and capping the level of fees that freeholders can charge is very welcome indeed.  

“We also welcome the introduction of the Right of First Refusal to leasehold houses, but it will be vital to ensure that the purchase price for the freehold is reasonable; house owners are often quoted huge sums to purchase their freehold, so the Government must specify a fair mechanism to value the freehold.”

Homeowners can build property extensions without planning permission

Published On: June 10, 2019 at 9:10 am

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Planning permission can be a real issue for homeowners, with time consuming red tape sometimes meaning it can actually be easier, or quicker, to move to a new property.

Planning permission laws changed in 2014, with temporary rules allowing homeowners to add an extension without having to apply for planning. The measures proved popular, and have now been made permanent.

How much can you extend a house without planning permission?

Homeowners can now build a single-storey rear extension on their property of up to six metres for terraced or semi-detached homes, or eight metres for detached homes, without applying for planning permission.

What does this mean for landlords?

Since relaxing the rules for planning permission in 2014, over 110,000 extensions have been built. This is a great benefit for landlords as they have greater flexibility in tailoring their rental property to attract tenants, plus could help keep those tenants in the property longer term.

Is it only residential properties affected?

Under the permitted development rights, property owners will be allowed to convert shops into offices without having to go through the planning process. The Ministry of Housing, Communities and Local Government have also softened planning rules to allow high street shops, offices and betting shops to temporarily change to certain community uses such as libraries or public halls.

Housing Minister, Kit Malthouse, said: “These measures will help families extend their properties without battling through time-consuming red tape.

“By making this permitted development right permanent, it will mean families can grow without being forced to move.

“This is part of a package of reforms to build more, better, faster and make the housing market work – and sits alongside our drive to deliver 300,000 homes a year by the mid 2020s.”

Housebuilding is Moving in the Right Direction, but Not Fast Enough

Published On: May 28, 2019 at 10:00 am

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Housebuilding across the UK is moving in the right direction, but is not fast enough to keep up with demand, according to the latest Dwelling Stock Estimates from the Ministry for Housing, Communities and Local Government (MHCLG).

In its most recent report, covering up to 31st March 2018, the Government department found that there were 24.2m homes in England – an increase of 222,000 dwellings (0.93%) on the same point of the previous year.

Of these, 15.3m were owner-occupied, 4.8m were private rental, while 4.0m were social and affordable rental homes.

Between March 2017 and March 2018, the owner-occupied dwelling stock increased by 226,000, while the number of private rental homes increased by 10,000. 

The amount of homes in the social and affordable rental sectors dropped by 1,000, with other public sector stock down by 13,000 dwellings.

On 1st October 2018, 634,453 vacant dwellings were recorded in England – up by 28,562 (4.7%) from 605,891 on 2nd October 2017. Empty homes account for 2.6% of all housing stock.

Long-term vacant dwellings numbered 216,186 on 1st October 2018 – an increase of 10,893 (5.3%) from 205,293 on 2nd October 2017. Long-term empty homes make up 0.9% of all housing stock.

Joseph Daniels, the Founder of modular developer Project Etopia, comments on the report: “This ten-year high for the creation of new homes in percentage terms is a welcome milestone, appearing as it does in the long shadow of ambitious housebuilding pledges set out by the Government at the last election.

“That manifesto commitment equated to nearly 200,000 new homes a year, though there remains a question mark over whether the Tory pledge related to the building of new homes or just the delivery of new stock, which can include the creation of new homes through other means including change of use.”

He continues: “However, even if the Government was to argue all additional dwellings count towards the manifesto commitment, the rate of progress is still too sluggish to render its commitment for a further 500,000 homes by 2022 a safe bet.

“The country is moving in the right direction, just not quickly enough, so it may take further incentives or policy changes to inject a bit of urgency into the growth in these figures.”

Mayor Pledges £200m to Protect Affordable Housebuilding through Brexit Uncertainty

Published On: April 4, 2019 at 8:00 am

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The Mayor of London, Sadiq Khan, has pledged £200m to protect affordable housebuilding in the capital throughout the continued Brexit uncertainty.

The continuing Brexit negotiations are already affecting the housing market, with falling sales and uncertainty over house prices. This is having a knock-on effect on housing associations, which currently receive low levels of funding from the Government and, therefore, rely heavily on income from selling new market-price homes to help subsidise new affordable housebuilding.

Faced with a slowdown of new home sales, the Mayor will help housing associations, by offering extra funding to switch homes from market sale or shared ownership, to homes for rent at social or intermediate rent levels, which are lower than market rents. This extra funding will enable them to commit to their future plans, sign construction contracts and begin development without further delay.

Khan believes that the impact of Brexit uncertainty makes this extra funding essential, though he has warned that it will stretch City Hall’s affordable homes funding to its limit. The Mayor will explore all options for further funding, and is calling on the Government, at the very least, to match this funding, by providing extra investment for housing associations to deliver their planned schemes.

Khan says: “At City Hall, we are building record numbers of new social rented and other genuinely affordable homes. We must not let the Government’s chaotic mishandling of Brexit undermine our plans. That’s why it is right we push our funding to its very limits, to keep housing associations building more affordable housing through the ongoing uncertainty – and it’s even more important given the Government totally failed to address my concerns when I recently raised them. Whatever happens with Brexit, ministers must at the very least match my support, and ensure we can keep building the homes Londoners need over the coming years.”

The support received by individual housing associations will depend on the schemes and their pipeline, as well as those underway. Given the strains already on the Mayor’s affordable housebuilding budget, and the importance of targeting it effectively, this funding is only available for homes starting in this calendar year.

The Mayor’s investment comes after he wrote to the Secretary of State last month, along with Paul Hackett, the Chair of the G15 largest housing associations in London, and Councillor Darren Rodwell, the Executive Member for Housing and Planning at London Councils, outlining the immediate emergency support that would be required from the Government if the UK leaves the EU without a deal.

Helen Evans, the Chief Executive Officer of Network Homes and Vice-Chair of G15, comments: “The current market uncertainty limits our ability to generate cross-subsidy to reinvest in affordable homes, so this strong, positive action to address that is welcome. If enough additional funding is made available, we will be able to continue to commit to new developments and increase the levels of affordable homes we are building. We look forward to engaging with the GLA [Greater London Authority] to secure this.”

Chancellor’s Latest Housing Plans “Don’t Go Far Enough”

Published On: March 18, 2019 at 10:30 am

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Last week (Wednesday 13th March), Chancellor Philip Hammond delivered the Spring Statement 2019, in which he announced his latest housing plans for the UK market. 

Despite Hammond’s claims that the Government is “determined to fix the broken housing market”, property expert Phil Spencer insists that the latest housing plans “do not go far enough”.

The Government reiterated that it is committed to building more homes in the right places, in order to unlock productivity growth and make housing more affordable. 

In the Autumn Budget 2017, it set out a comprehensive package of new policies to raise housing supply by the end of this Parliament to its highest level since 1970 – on track to reach an average of 300,000 per year. 

The latest housing plans contained within the Spring Statement set out further steps to deliver this ambition:

  • Through the Affordable Homes Guarantee Scheme, the Government will commit up to £3 billion of borrowing by housing associations in England to support delivery of around 30,000 affordable homes.
  • £717m from the £5.5 billion Housing Infrastructure Fund will unlock up to 37,000 homes at sites including Old Oak Common in London, the Oxford-Cambridge Arc and Cheshire.
  • Further progress was made on delivering growth in the Oxford-Cambridge Arc, including £445m from the Housing Infrastructure Fund to unlock over 22,000 homes, and a joint declaration with local partners, affirming the Government’s shared vision for the Arc.
  • £260m for the Borderlands Growth Deal, which, on top of the £102m announced recently for Carlisle from the Housing Infrastructure Fund, means up to £362m UK Government funding into the Borderlands area.
Chancellor’s Latest Housing Plans “Don’t Go Far Enough”

Spencer, who is the Co-Founder of Move iQ, reacts to the latest housing plans: “Any boon to Britain’s chronic housing shortage is, of course, not to be sniffed at — but the Chancellor’s plans simply do not go far enough.

“Britain needs a long-term, apolitical and impartial plan to build the homes we so desperately need, and not short-term sound bites to keep prospective voters happy.”

He believes: “Sorting out Britain’s housing crisis will not be a quick-fix; and certainly won’t be accomplished over any one Government’s time in power. 

“It’s time that housing experts were brought into the process of developing a strategic housebuilding plan — one that can’t be with tinkered with for the purpose of gaining votes every time a general election is on the horizon.”

The Managing Director of online letting agent MakeUrMove, Alexandra Morris, believes that there’s a wider issue to address: “We welcome the recognition that something needs to be done about the housing market, but it isn’t enough. Society is broken on many levels and housing is but one part of that.

“A strategic approach to infrastructure on a national level is absolutely required to help understand the requirements across the UK. The outcome would hopefully lead to tailored solutions regionally, which identifies the needs on a local level and goes further on the provision of resources to support local authorities in delivering what is needed to support their communities.”

She argues: “We need a higher target for the build of affordable and social housing. We also need to understand if existing schemes are actually delivering this. The build to rent sector is far too centralised, and the effect has been to push up inner city pricing across both sales and lettings. It hasn’t helped vulnerable people in need of quality housing get what they need.”

Morris adds: “Smaller landlords running good quality portfolios are in need of support. Encouragement to grow this sector should also be considered.”