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Em Morley

Average House Price to Surpass £1m by 2032, Believes Lib Dems

Published On: February 9, 2016 at 10:21 am

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The average house price in Britain could surpass £1m in just 16 years’ time, according to the Liberal Democrats.

Research from the political party suggests that property prices will increase from a current average of £290,000 to £1.017m in 2032.

The prediction is based on trends recorded by the Office for National Statistics (ONS), which show house price inflation for the past three years.

Average House Price to Surpass £1m by 2032, Believes Lib Dems

Average House Price to Surpass £1m by 2032, Believes Lib Dems

The Liberal Democrats’ research found that the average property price would hit £650,000 within a decade – a rise of £360,000 on today’s typical value.

The party is backing a debate in the House of Commons today, which is calling on the Government to provide more new homes for young people.

Measures include allowing councils to build more homes through lifting the current arbitrary cap on council borrowing, and building ten new garden cities, including five in the South East of England.

Leader of the Liberal Democrats, Tim Farron, comments: “A child born on the day of the debate faces the prospect of paying at least a million for a home to call their own.

“Relying on the bank of mum and dad isn’t an option for everyone and adds pressure to millions of families who have worked hard and done the right thing.

“The continuing upward spiral of house prices threatens the very idea of a family home.”1

The Government has already pledged changes to the housing market, including:

  • £2 billion – Chancellor George Osborne has doubled the housing budget to £2 billion to fund the building of more homes.
  • 400,000 new homes – The Government vows to build 400,000 new homes by 2020.
  • 5 housing associations – The Right to Buy scheme is being extended to housing association tenants, starting with a pilot in five housing associations.
  • 3% Stamp Duty – From 1st April, buy-to-let investors and second homebuyers will be charged an extra 3% in Stamp Duty when they purchase a property worth more than £40,000. The Chancellor believes this will raise around £1 billion by 2020. Find out how this is already affecting the market: /landlords-rushing-to-avoid-buy-to-let-tax-changes/

For the latest property market updates, remember to check LandlordNews.co.uk.

1 http://www.telegraph.co.uk/finance/property/12147282/Average-home-in-Britain-to-cost-over-1million-by-2032.html

Report Explains How to Overcome London’s Housing Crisis

Published On: February 8, 2016 at 3:19 pm

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A new report, commissioned for the Mayor of London, has detailed plans of how to overcome the capital’s housing crisis.

The Growing London report states that by 2030, 1.5m more people – around the number that currently live in Birmingham – will be living in London, among the 8.5m residents the capital already has.

Growing London is the first in a series of reports, the Good Growth Agenda, written by the Mayor of London’s Design Advisory Group. It is examining what the capital will look like as it changes to accommodate a population of over 10m.

London has already surpassed a previous record of 8.61m residents back in 1939. However, in the 1930s, more than 500,000 homes were built on greenfield land. Now, the plan is to increase housing within London’s footprint.

Report Explains How to Overcome London's Housing Crisis

Report Explains How to Overcome London’s Housing Crisis

The report found that around 50,000 new homes must be built every year over a 20-year period in order to house almost 70,000 people in London, and the equivalent of more than eight Canary Wharfs to provide jobs.

One of Growing London’s key findings was the need to reconsider London’s overall density. This could lead to more tower blocks. It says that Londoners live at a density of 73 people per hectare, whereas 200 years ago, there were 297 – more than four times as many people in one hectare today. If London had the same density as it did in 1815, its footprint could accommodate around 35m people.

Density levels vary across the capital, with a high of 271 people per hectare. In comparison to other major cities, this is spacious; in New York City there are 585 people per hectare, and a huge 1,111 in Hong Kong.

Another method of measuring density is to count the number of units or dwellings per hectare. A tower block accommodates an average of 450 units per hectare.

The report found that while guidance suggests there should be a limit of 405 units per hectare, some developments in London have been planned for over 3,000 units per hectare. Growing London believes that more research should be conducted into high-density building.

At present, 263 buildings that are 20 storeys tall are in the pipeline for the capital.

Another of the report’s important findings was that local authorities have almost stopped building new homes, despite owning 40% of land that could be used for housing. In the mid-60s and 70s, councils built around three-quarters of all new homes. In 2014/15, councils built just 310 of the 26,843 new homes in London.

The report suggests that at least 154,000 homes could be built within existing town centres, which already have good transport links, shops and offices, with a potential of up to 218,000 new homes within ten years.

It also believes there is opportunity for building low-density housing in areas of outer London that have good transport links.

Acknowledging that the public must more involved in the planning process, Growing London says that information is often lost in translation when it comes to public consultations. It believes that a site notice and online planning database are inadequate in communicating the key characteristics of a planning application.

Do you believe the capital needs higher density housing, or are there alternatives?

Equity Release Council challenges lifetime mortgages

Published On: February 8, 2016 at 12:54 pm

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Altering mortgage affordability rules would assist more lifetime mortgage customers to make interest repayments before moving to a roll-up arrangement.

This is the view of The Equity Release Council, which is wary of the amendments to the Mortgage Conduct of Business.

Changes

Amendments to the Mortgage Code of Business rules following the MMR mean that lifetime mortgage contracts that permit but not require consumers to pay interest for a length of time are subject to requirement of providers in order to gauge their affordability.

The Equity Release Council argues that this is despite the fact that payments of interest are already optional. As a result, customers will not be in danger of losing their homes as a result of not keeping up with interest payments.

This means that some customers who would have taken out a lifetime mortgage with the option to repay interest for as long as they wanted may now not pass affordability requirements. In addition, these customers could be reluctant to subject themselves to any assessment process or to be offered alternative products.

Equity Release Council challenges lifetime mortgages

Equity Release Council challenges lifetime mortgages

Calls

In an appeal to the FCA, The Equity Release Council has asked if a relaxation of rules intended for residential rather than lifetime mortgages would assist more consumers looking to unlock their housing wealth, while saving a greater amount of equity in their property.

Additionally, the Council added that a relaxation could support existing providers’ ability to further their product range.

‘We welcome the proactive decision by the FCA to review whether there are any barriers to competition in the mortgage sector,’ said Nigel Waterson, Chairman of The Equity Release Council. ‘Retirement lending is a crucial part of this and there needs to be careful consideration of the factors which differentiate residential and lifetime borrowing,’ he continued.[1]

Waterson went on to say that, ‘as part of our wide-ranging input we highlighted that revisiting affordability rules may help more consumers to make use of options already offered by equity release providers in later life, as well as encouraging more new entrants to the market. There is a growing recognition that equity release has an important part to play in the planning of funding for later life and we look forward to working together with the FCA on the back of its findings.’[1]

[1] http://www.propertyreporter.co.uk/finance/lifetime-mortgage-rules-challenged.html

 

 

 

 

Just 2% of Landlord Licenses Issued in Liverpool

Published On: February 8, 2016 at 12:15 pm

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Liverpool City Council has issued just 2% of license applications since it launched its compulsory landlord licensing scheme in April 2015.

This news arrives after a Freedom of Information Request from the National Landlords Association (NLA).

Comparatively, the London Borough of Newham has issued 74% of its applications over the same period. Its licensing scheme has resulted in over 600 prosecutions,

Just 2% of Landlord Licenses Issued in Liverpool

Just 2% of Landlord Licenses Issued in Liverpool

more than 500 arrests, over 100 rent repayment orders and 26 banning orders since its launch in January 2013.

Recently, Liverpool City Council announced its co-regulation partners for administering the scheme. Find out who they are here: /liverpool-city-council-partners-with-arla-nals-and-the-rla/

It is obligatory for all private landlords in Liverpool to apply for a license. The scheme was introduced to ensure a level of quality and proper practice in the private rental sector.

In order to be issued with a license, landlords must declare any convictions and their rental properties must meet fire, electric and gas safety standards and be in a good state of repair.

Licenses cost £400 for the first property and £350 for any additional properties. Landlords that are members of the city’s accreditation scheme, CLASS, or members of the council’s co-regulation partner groups receive a 50% discount on licenses.

The Chairman of the NLA, Carolyn Uphill, comments on the shocking statistic: “These findings show that Liverpool City Council can’t cope with this scheme, which is precisely what we said would happen when they proposed it almost two years ago.

“Quite frankly, it’s embarrassing. If the council can’t process applications or inspect properties, then how can it improve property standards for tenants?

“At this rate, it will take 13 years to inspect the city’s private rented housing and 38 years to license them all, so the scheme’s co-regulation partners have got their work cut out.”

She insists: “The NLA has opposed this scheme from the very start. We do not regulate our members, so it would be inappropriate for us to play any part in a scheme that effectively polices landlords on the council’s behalf.”1 

Landlords in Liverpool are reminded that they must apply for a license.

1 http://www.landlords.org.uk/news-campaigns/news/embarrassing-two-cent-landlord-licenses-issued-liverpool-council

 

 

Large investment in BTR should be exempt from SDLT

Published On: February 8, 2016 at 11:55 am

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In yet another contest against the increase of Stamp Duty for buy-to-let and second properties from April, the industry is calling on the Government to protect larger scale investment.

The British Property Federation (BPF) wants higher scale investment in residential homes protected from the tax hike. The firm argues that unless this type of investment is protected, the industry is at risk of losing much-needed funding.

Warning

In its warning to the sector, the BPF said that the higher rate of tax could cancel out the progress made by the build to rent sector since 2011. New data indicates that there are over 30,000 build to rent units with planning permission in Britain, representing a 47% increase since October.

Additionally, the BPF noted that since the beginning of 2016, there have been significant investments made in the sector. These include Grainger PLC, which pledged to invest £850m by 2020.

Further high-scale investors include Legal and General, working alongside Dutch pension fund PGGM to deliver a £600m build to rent investment plan. Greystar Europe Holdings, one of the largest housing investors in the United States, has announced the acquisition of a 26.5 acre plot in Greenford, West London. What’s more, the Royal Bank of Scotland has pledged £1bn in lending for the build to rent sector.

Large investment in BTR should be exempt from SDLT

Large investment in BTR should be exempt from SDLT

Exemption

The BFP has called for the introduction of an easy portfolio test that will exempt institutional investors with 15 or more units in their portfolio from paying the extra tax.

‘Since the start of the year, there has been investment in the build to rent sector on a scale that we have never seen before,’ noted Melanie Leech, chief executive of the BPF. ‘Following the changes that were made to SDLT a few years ago, investment in the sector has really taken off and it is great to see pension funds and other institutions now investing heavily in housing.’[1]

‘There is cross-party support for new housing and a better quality rented sector and we would expect the Government to recognise the impact that the SDLT surcharge might have on investment in new homes and the creation of a better quality rental product,’ she continued.[1]

Negative impact

If an exemption is not provided, there would be a significant negative impact on the sector, according to Andrew Stanford, UK residential fund manager at LaSalle Investment Management and chair of the BPF’s Build to Rent committee.

‘We were encouraged by the proposed exemption for large scale investors from the additional 3% SDLT,’ Stanford observed. ‘If the exemption was not implemented it would have a significant negative impact on our ability to invest in the nascent build to rent sector.’[1]

‘LaSalle intends to provide good quality, built to rent homes across the country for customers on their journey to home ownership or for customers who want the flexibility and security of renting a home with a long term institutional landlord,’ he added.[1]

Adam Challis, head of residential research at JLL, feels that the build to rent sector has a real opportunity to increase the quantity and quality of private rented properties. He noted that, ‘the 3% SDLT charge would undermine this once in a generation opportunity to give renters a better deal.’[1]

[1] http://www.propertywire.com/news/europe/uk-build-rent-tax-2016020811530.html

 

Superfast broadband for all new homes in Britain

Published On: February 8, 2016 at 10:20 am

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A new agreement between the Home Builders Federation (HBF) and internet provider Opeanreach is set to deliver superfast broadband to new build homes in Britain.

Fast internet connection is becoming one of the must haves for would-be homebuyers in the UK and the new partnership is set to see this become standard in new properties.

Deal

The deal will see fibre based broadband made available to all new developments, for free or as a part of a funded initiative. It is thought that more than half of all new-build homes will be connected to the broadband free of charge for developers.

In addition, Openreach is looking to introduce an online planning tools for new homebuilders. The tool will tell them if properties in a certain development can be connected to fibre for free, or if a subsidiary contribution is required to help fund the activation of the local fibre network.

The housing industry will be able to access a rate card from Openreach, which will detail the fixed cost contributions that are required by homebuilders. Openreach said that it will make a significant contribution itself before looking for additional funds from developers.

Additionally, the Home Builders Federation pledged to promote and support the uptake of co-funding amongst their existing members.

Superfast broadband for all new homes in Britain

Superfast broadband for all new homes in Britain

Expectations

‘Broadband connectivity is just one thing that home buyers now expect when buying a new build, so the industry-led push to make superfast, or indeed ultrafast, broadband specials available by default in new homes represents a very important step in meeting the UK’s digital needs,’ noted Digital Economy Minister Ed Vaizey.[1]

Clive Selley, chief executive officer of Openreach, believes that the agreement is a positive step in bringing fibre broadband to as many homes as possible. Selley said, ‘we recognise that high-speed broadband connectivity is a major factor for home owners when deciding to buy a house. That’s why we’re offering to deliver fibre to all new build developments either for free or as a co-funded model.’[1]

‘With the support of the HBF we’ve delivered a series of measures to give developers greater clarity, choice and more funding. This underlines Openreach’s commitment to further extend its fibre network, which reaches more than 24 million premises, to benefit even more communities across the country,’ he added.[1]

Growth

Stewart Baseley, executive chairman of the HBF, observed that it will help reach home buyers expectations. He said, ‘house builders are constantly striving to deliver on and surpass the expectations of customers as we continue to see housing supply grow.’[1]

‘Broadband speeds are an increasingly important factor in the home buying process and this offer to developers will see more build purchasers benefit from the very best connectivity to go alongside the many other advantages of purchasing a brand new home,’ Baseley concluded.[1]

[1] http://www.propertywire.com/news/europe/uk-new-homes-broadband-2016020811529.html