Posts with tag: housing crisis

Desire to Own a Home is Rising in the UK, but Many Support Stamp Duty Surcharge

Published On: August 25, 2016 at 9:29 am

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The desire to own a home is rising in the UK, but many homeowners and prospective homeowners support the Stamp Duty surcharge for landlords, which could have unintended consequences on first time buyers’ ability to get onto the property ladder.

The latest Homeowner Survey from the HomeOwners Alliance found that homeownership dreams are on the up amongst young people in the UK, but so too are concerns about the availability and quality of housing.

More people now desire to own their own homes, says the report, with the proportion of non-homeowners who aspire to own their home rising to almost three quarters (73%) this year, up from 65% four years ago.

The proportion of aspiring homeowners that say availability of housing is a serious problem has soared to 78% this year, up from 72% in 2015. Hopeful first time buyers are also increasingly concerned about the quality of housing, with 60% describing it as a serious issue.

However, the nation’s top housing concerns continue to be house prices, the ability to get onto the property ladder and saving for a deposit.

Desire to Own a Home is Rising in the UK, but Many Support Stamp Duty Surcharge

Desire to Own a Home is Rising in the UK, but Many Support Stamp Duty Surcharge

The Chief Executive of the HomeOwners Alliance, Paula Higgins, comments: “Despite a blizzard of Government initiatives aimed at helping homeowners, the housing crisis is deepening across the country, with ever more non-homeowners wanting their own home and ever greater concern about the lack of housing. Many Government policies have boosted demand for homes, but what this survey shows is that the real problem is the desperate shortage of houses.

“Until the Government tackles the fundamental issue that we just don’t have enough good quality homes, the housing crisis will continue to deepen and a generation will continue to have their dreams of homeownership crushed.”

Prospective homebuyers across the country will be shocked to hear of the latest Help to Buy ISA scandal, which proves that first time buyers cannot use the Government’s promised bonus to put towards a deposit. Read more here: /help-to-buy-isa-scandal/

The report adds that London is a hotspot for housing concerns. The capital has recorded higher levels of concern than the UK overall for house prices, availability and quality of housing, ability to get a mortgage/remortgage, Stamp Duty rates, gazumping and the leasehold/freehold system.

However, the study also found that many homeowners or aspiring homeowners support the new Stamp Duty surcharge for additional homes, which could in fact halt the journey of first time buyers even further.

More than twice as many people (47%) support the 3% Stamp Duty surcharge than oppose it (18%).

The policy is seen to support first time buyers and homeownership. However, those that oppose the tax hike believe it could have unintended consequences; landlords may put their rents up as they pass the costs onto tenants, or stop investing in the sector altogether.

Despite this, concerns over Stamp Duty have fallen dramatically since the Government reformed the system in 2014. Two years ago, two-thirds of UK adults (64%) said Stamp Duty was a serious problem, compared to half (52%) today.

Those in support of the surcharge explain why:

“It might help reduce number of people buying property for financial gain and allow first time buyers to have a chance.”

“Buy-to-let are pricing people out of where they were brought up, so anything to make it fairer for them I support.”

“If you can afford to buy another property, you can afford to pay tax on it.”

Those that oppose the additional Stamp Duty believe:

“There is a great need for private rental properties – this is just another way of the Government raising taxes to the detriment of others.”

Do you believe that the Stamp Duty surcharge will push rents up, further driving hopeful first time buyers away from their dreams of homeownership?

A Whopping 1.4 Billion Bricks are Needed to Solve the Housing Crisis

Published On: August 25, 2016 at 8:42 am

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A shortage of brick supply has contributed to sky-high house price growth over the last decade, as growing demand continues to exceed housing supply. A new report claims that a huge 1.4 billion bricks are needed to solve the UK’s housing crisis.

Although contractors are eager to build more homes following the Brexit vote, the UK’s construction industry would require a total of 1.4 billion bricks to help solve the housing shortage. This is the equivalent of the amount needed to build all of the homes in Leicestershire, reveals the Bricks Report from the National Association of Estate Agents (NAEA) and the Centre for Economics and Business Research (Cebr).

Growing demand

Between 2006-16, the expanding UK population triggered widespread growth in housing demand, which has now surpassed the number of homes being built. Given that in 2016, the average UK home is made up of 5,180 bricks, resolving the shortage of 264,000 units would require 1.4 billion bricks.

A Whopping 1.4 Billion Bricks are Needed to Solve the Housing Crisis

A Whopping 1.4 Billion Bricks are Needed to Solve the Housing Crisis

Although house prices are affected by numerous factors, the balance of supply and demand of homes fundamentally drives them. The UK’s housing shortage has caused sharp house price growth and prevented many hopeful buyers from getting onto the property ladder.

What the bricks could build 

The 1.4 billion bricks deficit could, in theory, build some of the UK’s most famous landmarks several times over, including:

  • 740 Big Bens
  • 40 Tower Bridges
  • 3,090 Manchester Town Halls
  • 4,540 Warwick Castles
  • 5,830 Conwy Castles

Brexit bricks 

The NAEA and Cebr believe that the Brexit vote could significantly worsen the bricks deficit. In 2015, 85% of all imported clay and cement – the primary brick components – came from the EU. Depending on how trade negotiations develop, Brexit could have a considerable impact on supply.

The extent of the shortage 

Brick stock steadily declined between 2008-13, and only partially recovered in 2014 and 2015. Two-thirds of small and medium-sized construction firms faced a two-month wait for new brick orders last year, while almost a quarter had to wait up to four months. Additionally, one in six (16%) were forced to wait six to eight months. The report claims that this can partially be put down to a slowdown in building following the recession.

Shrinking homes

Over the past 100 years, the average size of a UK home has shrunk significantly. In the 1920s, the average home was 153m2. Almost 100 years later, in 2016, the average property is around half the size, at 83m2 , meaning that homes have shrunk by 46% in the last century. Although this is partly a result of decreasing family size, it can also be put down to financial restrictions. As house price have risen exceptionally over the past ten years, by 45%, homebuyers have been forced to settle for smaller properties.

In the last decade, the average UK home has shrunk by 9%, or 228 bricks. In 2006, a typical property was 91m2 in size and required a total of 5,408 bricks. Now, the average home requires only 5,180 bricks – but there are still not enough to meet demand.

The Managing Director of the NAEA, Mark Hayward, says: “We all know that the massive lack of supply in housing is an issue that needs resolving urgently. As well as freeing up more land to ensure we can build the right sort of houses in the right places, it’s crucial we have the right materials and skills to do so. It seems a simple consideration, but the fact that we don’t have enough bricks to meet demand has a very real effect and holds up the process from beginning to end. We’re concerned that the impact of the EU referendum means this problem could get worse, as we rely on the import of brick components from the EU, and of course, many of our skilled labourers come from there too.”

Skills shortage

Alongside the bricks deficit, a skills shortage in the UK has also restricted housebuilding, as construction-based jobs are declining in popularity. This is a result of housebuilding slowing down during the recession, causing workers to find alternative careers and many choosing not to return when the market recovered.

The recent vote to leave the EU may also impose restrictions on foreign workers coming to the UK, which would also affect the UK’s ability to build more homes. Additionally, fewer young people are completing the training necessary to fill roles in the field, so trade bodies are now calling on the Government to make construction apprenticeships more attractive, through incentives.

Hayward concludes: “The UK housing market is in crisis, with young buyers unable to get on the ladder and families continuing to live in houses they’ve out-grown for longer than traditionally they would have had to. Houses may be getting smaller, but we are needing to build more of them than ever, so ultimately, our need for bricks is greater than before. We need investment in the sector to boost production, and housebuilding needs an image overhaul to become a more attractive career prospect for school leavers and graduates.

“Until this is addressed, we might as well resign ourselves to a lifetime of astronomical prices and falling levels of homeownership.”

Manchester Mayoral Candidate Calls for Homes for All

Published On: August 18, 2016 at 10:52 am

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As part of his plan to create homes for all, Manchester mayoral candidate Andy Burnham has called for councils to receive a fund to help them purchase private rental homes in a poor state of repair.

The Labour MP also pledged to introduce a licensing scheme for private landlords across Greater Manchester, and gain powers to regulate rent rises and property standards, if he is elected as mayor.

In a blog for Inside Housing magazine, Burnham proposed measures to tackle the housing crisis and drive out the “scourge of absent, private landlords that bedevils much of Greater Manchester”.

Manchester Mayoral Candidate Calls for Homes for All

Manchester Mayoral Candidate Calls for Homes for All

Burnham suggests that councils should be provided with loan finance to buy out private landlords if they believe they are not keeping their properties up to the decent homes standard.

His plans for a community buy-back fund would “have a number of benefits”, he says.

He explains: “First, it will quickly expand public housing stock. Second, it will bring rents down to an affordable level. Third, it will enhance the ability of councils to turn around struggling neighbourhoods. Fourth, it will bring down the housing benefit bill.”

However, the Head of Policy, Public Affairs and Research at the National Landlords Association (NLA), Chris Norris, has hit back at the suggestions of rent controls and licensing scheme.

“What is disappointing is the almost immediate reversion to policies of intervention and control, which are both outmoded and proven to fail,” he says. “The people of Greater Manchester deserve better than promises to seek powers to cap rents and drive investment from the area by licensing the good and well-meaning whilst the criminally negligent continue to ignore the law.”

But Norris adds that Burnham was “right to recognise the paramount importance of having a home” and to create homes of different tenure.

He seemed to applaud the policy to buy out rogue landlords, but is cautious: “We might question whether the local community will thank Mr. Burnham for effectively rewarding the poor and sometimes criminal performance of bad landlords with a golden handshake.”

Norris suggests that Burnham may be better to work with good landlords in Manchester and ensure they are “treated like the valuable part of the community they are, so they could help lead the local buy-back he so desires”.

Burnham also wants to increase council and social housing across Greater Manchester’s ten boroughs by extending the £300m housing fund to pay for these homes. Currently, the fund is limited to commercially-led housing development.

He believes that the majority of the fund should help provide loans and guarantees to councils and housing associations to build more affordable homes to rent.

“A small proportion of the new homes will be designated rent-to-own; available on a long-term lease to people under 35, and giving hope of homeownership to generation rent,” he states.

The Manchester mayoral election will be held in May 2017. Burnham’s opponents are yet to be announced.

Dispatches Reveals the Extent of Britain’s Housing Crisis

Published On: August 16, 2016 at 9:27 am

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Last night, Channel 4 broadcast a new Dispatches show into the shortage of homes in the country, revealing the extent of Britain’s housing crisis.

The Great Housing Scandal, presented by Harry Wallop, began with the Government’s 2011 pledge to get Britain building. The Government vowed that by 2015, 100,000 new homes would be built on huge amounts of public land, which the Government would release to developers.

Last year, the Government announced that it had hit this target. But where are the homes? Asked Wallop.

Wallop visited Susan, who lives alone with her 11-year-old son in Plymouth. Susan is forced to rent from a private landlord, as she cannot afford the average house price in the area, of £170,000.

Dispatches Reveals the Extent of Britain's Housing Crisis

Dispatches Reveals the Extent of Britain’s Housing Crisis

However, Susan’s landlord needs to sell the property for personal reasons, and has given her three months to leave.

With homeownership at a 30-year low, demand for rental properties is only increasing, which is causing rents to rise twice as fast as the average salary.

Susan has become one of 28,000 people in Plymouth who are on the waiting list for a council home. In the country, around 3m people are waiting for a council house.

Susan is living with the feeling that she’s failing her son and is losing her “safe haven”.

So who has profited from the Government’s targets, and who’s still living in the grips of Britain’s housing crisis?

Of the Government’s 100,000 new homes target, it did not specify how many would be affordable – this is 20% or more below the average market price for the area, which is the most urgently needed type of housing.

Wallop then went to investigate Turnchapel Wharf, an area that the Government said should have 20 new homes by now. When Wallop arrived, he found that only offices had been built on the site. However, the Government has included the 20 proposed homes in its official figures.

Since 2011, the Ministry of Defence (MoD) reports that it has sold enough land for 39,000 of the Government’s target. But Wallop and land valuation expert Pete Redman found that on some land sales, the Government didn’t achieve the best price.

In addition, just 11 out of 47 sites sold between 2011-15 were sold with planning permission. Redman explained that buying sites without planning permission not only loses taxpayer money, but also slows down housebuilding.

On 45% of the sites, planning permission was not obtained, while many did not even apply.

So what about the other end of the scale?

In Knightsbridge, west London – one of the most expensive places to live in the country – Wallop found that the super rich are living in the lap of luxury. Speaking to a local estate agent, Wallop discovered that many are building their own indulgent retreats in basements or empty properties next door, such as pools and bars.

Additionally, the programme revealed that many large, expensive sites are being sold to developers who are turning properties into luxury hotels. The number of homes proposed for these sites is also being included in official figures, despite no homes having been built there.

What’s more, the Government has cut the proportion of homes on sites that must be affordable. Wallop found that more than half of the new developments will have less than half of the recommended number of affordable homes.

As if the figures weren’t murky enough, over 7,000 of the new build homes included in the Government’s target were already planned before the pledge was announced. Yet the MoD has still included these properties in its figures.

Shockingly, Dispatches found that just 1,800 homes have been completed since 2011. On its journey, it found just six on one site, which are priced at £3.5m each.

When Theresa May was appointed as Prime Minister, she made an even more ambitious plan to build 1m homes by 2020. But following these new figures, does it seem possible?

“The Government needs to get a grip of this programme”, insisted Meg Hillier MP, the Chair of the Public Accounts Committee.

Will the Government be able to deliver on its promise and solve Britain’s housing crisis?

London Olympics’ Legacy Lives on Through Housing

Published On: August 10, 2016 at 8:34 am

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The London Olympics’ legacy continues to live on through the housing market, according to the latest research by hybrid estate agent eMoov.co.uk.

The firm found that since the London Olympics in 2012, property values in Stratford’s Olympic Village have shown greater strength than prices across the capital as a whole.

London Olympics' Legacy Lives on Through Housing

London Olympics’ Legacy Lives on Through Housing

Having been originally built to accommodate those competing in the Games, the Olympic Village has since been designated its own postcode (E20) and utilised as a residential complex, helping to tackle the capital’s housing shortage.

Although many cities have seen their Olympic legacies fade, it was widely believed that London would continue to benefit from the extensive regeneration it experienced ahead of the 2012 event. But what benefit, if any, has this regeneration brought to the London housing market?

The average property price in Stratford’s Olympic Village is now £459,199. Although this is significantly lower than the London average of £550,000, prices have soared by a huge 43% in the E20 postcode since the complex’s construction.

Over the same period, the London market as a whole has seen an average increase of 38%, despite widespread inflation as a result of high demand and a chronic lack of housing stock.

In England, the average house price rise was even lower, at 24%, taking the typical property value to £257,567.

Those that purchased property in the Olympic Village certainly seem to have won gold when it comes to housing; not only has house price growth outpaced the rest of the capital, property values are much more affordable than in London as a whole.

The founder and CEO of eMoov, Russell Quirk, says: “It goes to show that regardless of whether you thought the London Olympics was money well spent or not, the regeneration of what was essentially an east London wasteland has helped to breathe new life into the area where property is concerned.

“Yes, the area may have benefitted more so because of the Games, but we’re now four years on and the Olympic Park has seen a larger property value increase than the capital as a whole. That’s no coincidence. What has been done with Stratford should be an example that we should look to replicate right across London.”

With such potential for substantial capital growth and affordable house prices, could Stratford be your next investment spot?

Rent Controls Would Spell Disaster for Tenants, Warns RLA

Published On: August 8, 2016 at 9:41 am

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Rent Controls Would Spell Disaster for Tenants, Warns RLA

Rent Controls Would Spell Disaster for Tenants, Warns RLA

Jeremy Corbyn’s plans to introduce rent controls and secure tenancies in the private rental sector would spell disaster for tenants, warns the Residential Landlords Association (RLA).

The Labour leader has vowed to implement rent controls and secure tenancies if he is elected Prime Minister at the next general election. However, the RLA has spoken out against Corbyn’s plans, saying that they would deter many landlords from investing in the buy-to-let sector, which would reduce the supply of homes to let.

Last week, Corbyn announced ten pledges in his bid to become the prime minister, but the RLA believes his plans would worsen the UK’s housing crisis.

The Chairman of the RLA, Alan Ward, explains: “Jeremy Corbyn’s call for rent controls would be a disaster for tenants. He is ignoring all history and experience, which shows that where such controls are applied, they choke off the supply of homes to rent, making it more difficult for tenants to access decent and affordable housing. This has previously been acknowledged by Labour’s former minister responsible for housing in Wales.

“Rather than playing the populist tune, Mr. Corbyn would do well to consider the facts. Figures in the English Housing Survey show that private sector tenants are spending an average of four years in their current property, up from 3.7 five years ago. Such tenants are also more satisfied with their accommodation than those in the social rented sector, according to the same survey.”

The RLA has long opposed the introduction of rent controls, insisting that the Government should address the issue of housing supply by encouraging greater levels of housebuilding in order to stabilise rents in the long-term, rather than penalising landlords.

The RLA’s objection to Corbyn’s plans arrives as the Society of Licensed Conveyancers calls for the Government to scrap Stamp Duty.

The group believes that abolishing Stamp Duty, particularly the 3% surcharge for landlords, would create a more “buoyant and vibrant” property market.

Do you agree with these recent calls?