Posts with tag: Affordable housing

350,000 Households to be Priced Out of Market by 2020

Published On: November 18, 2015 at 3:09 pm

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A shortage of affordable homes will exclude at least 350,000 households from the property market by 2020, insists a new report from Savills.

The data arrives as property portal Rightmove reports the smallest November decline in asking prices for four years, highlighting how the rising cost of private sector housing is pricing out households on low and middle incomes.

The report from Savills suggests that in the next five years, 70,000 new households per year will be unable to afford to rent or buy homes at market rates, unless they are assisted in some way. This means that by 2020, 350,000 will require housing priced at below market rates.

The firm has analysed current incomes and prices for buying and renting, assuming a household can pay up to 30% of its gross income on housing.

350,000 Households to be Priced Out of Market by 2020

350,000 Households to be Priced Out of Market by 2020

It does not include “any backlog of unmet need and the effect of falling stock levels due to Right to Buy and proposed sale of high value council homes”. This indicates that the actual impact of increasing prices could be even worse than expected.

The problem is most severe in London and the South East, where house prices have soared and sit above the peaks hit before the financial crisis. Savills reports that 26,000 new households in London and 11,500 in the South East will be priced out each year.

It says that while the median income of excluded households in London is £20,000, those earning up to £60,000 a year will not be able to afford housing costs in some parts of the capital.

Official data reveals that the amount of new homes built in England rose by 25% in 2014-15. However, there was also an increase in the number of properties sold off through the Right to Buy scheme.

Current Government schemes that allow house builders to avoid providing affordable housing in new build developments that include starter homes could cause further struggles for priced-out buyers.

Associate Director at Savills Research, Chris Buckle, states: “There can be no question that we need to boost house building volumes, but these new homes need to be built across a variety of tenures to put homes within reach of those in greatest need.

“Our concern is that new policy will result in a greater shift from sub-market rental products towards more expensive shared ownership and starter homes accessible only to those on middle incomes.”1

Rightmove’s report shows that the traditional winter drop in asking prices is less marked than usual, indicating that vendors are in no rush to move.

The average asking price for homes coming onto the market in November was 1.3% lower than that in October, compared with an average decrease of 1.9% over the last five years. The typical price of a property being put up for sale in England and Wales is now £292,572, a 6.2% increase on last year.

Miles Shipside, Housing Market Analyst at Rightmove, comments: “Those looking to market their property as Christmas gets closer often have a greater sense of urgency to find a buyer and sensibly recognise that trimming their asking price will provide an incentive to potential buyers more focused on seasonal Christmas trimmings.

“Buoyant market conditions and a confident outlook for 2016 mean that the reduction, while no doubt welcome to hard-pressed buyers, is the most Scrooge-like since 2011. It’s likely to be a short-lived respite as the combination of high confidence and low interest rates is a recipe for higher prices next year.”1 

The portal reports that a survey of 23,000 homeowners found that people are feeling confident about their finances for 2016. Most (85%) said they do not think their financial situation will worsen in the next 12 months, despite the possibility of an interest rate increase.

Just over two-thirds expect house prices to continue rising in the next year, with only 7% predicting a fall in prices.

1 http://www.theguardian.com/money/2015/nov/16/lack-affordable-homes-exclude-350000-by-2020

 

Affordable London Flats Sell Out in Three Hours

Published On: November 6, 2015 at 4:17 pm

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Yesterday, we reported that a new build development in Hounslow, London, had attracted so much attention that prospective buyers had been queuing in the street since Wednesday morning.

Affordable London Flats Sell Out in Three Hours

Affordable London Flats Sell Out in Three Hours

All of the flats – 215 of them, with a combined value of £60m – sold out yesterday evening in a record three hours. This equates to sales worth £335,000 per minute.

Half of the buyers are owner-occupiers and the other half are investors.

Nine people camped overnight on Wednesday, with the queue growing to 30 hopefuls by 9am yesterday morning.

The queue had built up to around 150 people by the launch at 5pm yesterday, and by 6.30pm, 250 buyers had rushed through the doors at Trinity Square, the former London headquarters of American Airlines.

By 8pm, all of the flats had been sold.

The apartments will not be ready to move into for almost two years, with the development due for completion in autumn 2017.

More than 2,000 had registered for the launch. All of the flats are either studios or one-bedroom apartments, with prices starting at £199,000.

Over 40% of the development is priced below £250,000. The one-bed flats sold for between £310,000-£315,000, significantly lower than the London average of £350,000-£450,000, depending on the area.

The developer, Galliard, described the project as the capital’s largest new build development for first time buyers and first time investors.

The first person in the queue was Monika Morawska, who has been hoping to become a homeowner. She previously missed out on another recent Galliard launch in Hayes, Middlesex, where the homes sold out within four hours.

For more details, read yesterday’s piece: /buyers-camping-out-for-chance-to-buy-affordable-london-flats/

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Buyers Camping Out for Chance to Buy Affordable London Flats

Published On: November 5, 2015 at 4:08 pm

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Categories: Property News

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Aspiring homebuyers have been camping out in the streets for a chance to buy affordable flats in Hounslow, London.

The properties, based inside the former UK headquarters of American Airlines, will not be ready to move into until autumn 2017.

Galliard, the developer of the site, is selling 228 new flats. Prices start at £199,000 for a 301 square foot studio suite and up to £355,000 for a one-bedroom apartment. They will be sold on a first come, first served basis.

Buyers Camping Out for Chance to Buy Affordable London Flats

Buyers Camping Out for Chance to Buy Affordable London Flats

As the flats are being built under Government rules allowing a change of use from offices to residential, Galliard was not obliged to provide any social housing in the development.

However, as more than 40% of the flats cost less than £250,000, they are more affordable than many new builds in London, and much cheaper than the average house price in Hounslow, of £383,500.

The local London press has heavily advertised the development, with prospective buyers told that owners of similar apartments in the area “see resale values soar by up to 14% growth in ten months”1.

Monika is a 38-year-old accountant from Poland. She has been queuing since 10am on Wednesday (4th November 2015). She has lived in London for 15 years, and her mother and brothers have been sitting in shifts outside the Trinity Square building.

She says: “We were thinking about buying one of the company’s flats in Hayes. I remember I came two hours after the doors opened there and 75% of the flats were already sold, so we decided to come really early for this one.

“We don’t know if there will be only one flat at £199,000 so just in case I wanted to be first in the queue. In Poland, like here, we are good at queuing, so it’s okay.

“Buying property is quite a high return and you can be sure the mortgage is paid. I’m thinking about my retirement. I believe after 20 years, I’ll have a good income so I can retire.”1

Shelinder Singh is a 25-year-old business manager from Hounslow. He has been in the queue since 5pm on Wednesday. Shelinder is an aspiring first time buyer, so if he secures a flat, it will be the first home he owns with his wife. They have been renting since they were married in 2013.

“I’m going for the cheapest one, as it’s my first time buying property, so I have to go for the one that is as cheapest as possible,” he explains.

The doors will open at 5pm on Thursday (5th November 2015). Buyers must pay a £2,000 reservation fee for a flat. After 21 days, they must pay 10% of the price followed by another 10% nine months later. The final amount is due on the day of completion.

Shelinder believes it is a great deal: “I never thought I’d be able to buy anything as cheap as that in London. You can’t find anything in this area for less than £350,000. I’m really excited about living somewhere I actually own.”1

Data released earlier this week revealed that the average UK home costs more than ten times the typical annual income of a full-time worker.

A first time buyer property costs eight times the average income.

The average house price in the UK is currently £284,000, according to the Office for National Statistics (ONS). First time buyers typically pay £215,000 for their home.

The median gross annual earnings of a full-time worker is £27,200.

1 http://www.theguardian.com/money/2015/nov/05/homebuyers-camp-out-overnight-for-chance-to-buy-affordable-flat

 

 

Average Rent Reaches New High of £816 a Month

Published On: October 16, 2015 at 12:22 pm

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Inflation may be in the minuses, but rents have risen by an average of between 6.3% and 8.5% over the last 12 months, according to two reports. The data highlights the difference between the price of a home and the cost of living.

The average monthly rent paid by private tenants in England and Wales soared to a record high of £816 in September, compared to £768 in September 2014, according to letting agents Your Move and Reeds Rains. At the same time, official inflation statistics reveal that UK prices dropped by 0.1%.

Additional research by lettings insurance firm HomeLet shows that the average UK rent rose by £78 over the year, to just under £1,000.

Insurance provider Direct Line for Business also found that three parts of the country – Manchester, Newcastle and the London Borough of Westminster – saw average rent growth of over 20% in 2014.

Average Rent Reaches New High of £816 a Month

Average Rent Reaches New High of £816 a Month

The data will further dishearten generation rent and further pressure the Government to tackle the housing crisis. Spiralling house prices and stricter mortgage criteria have priced more and more young people out of the market.

Housing charity Shelter reports that the figures “highlight the plight of an entire generation stuck in insecure and expensive private renting”.

On Tuesday (13th October 2015), official figures stressed the continued difficulty of buying a home, as the average UK property price soared to a record high of £284,000 in August.

According to the study by Your Move and Reeds Rains, rents increased to a new record in September, and are up by an average of 6.3% annually. It found that rent prices are now around a quarter (24%) higher than in January 2010, while the CPI inflation index is just 14% higher over the same period.

London has experienced the greatest growth, with typical rents up 11.6% over the year to a huge £1,301 per month. The East of England, East Midlands and South West saw annual rises of 8.8%, 6.7% and 5.5% respectively.

However, average rents are stable or falling in some parts of the country. For example, in Wales, they are down by 5% on last year, to £536.

The rental market witnesses the highest level of activity at this time of year, as students flood into new cities and graduates move for jobs in different areas; this could be why rents are still moving up. However, despite this, the sector experienced “unprecedented acceleration” over the year, says Adrian Gill, Director of the two agents.

He adds: “Rents have been growing faster than ever, particularly in real terms, given inflation has essentially been zero since February. Across the country, towns and cities are seeing demand from local tenants outstrip the supply of properties to let, with inevitable effects on rents. There is little sign yet of this cooling substantially as the autumn progresses.”1

HomeLet reveals that the average UK rent for a new tenancy over the three months to September was £995 per month. This is an 8.5% rise on the £917 recorded last year. The typical rent paid in Greater London is significantly higher, at £1,555.

Meanwhile, recent analysis of private rent prices in England by Direct Line for Business shows that 11% of areas experienced double-digit rises over 2014, with an average increase of 6.7%.

Westminster saw the highest growth, of 28%, followed by Manchester at 22%, Newcastle upon Tyne at 21% and the London Borough of Camden at 19%. However, there were declines in some areas, such as the Chiltern district council area of Buckinghamshire, at 11% and Exeter, down 8%.

But Gill says landlords are in a great position. With higher rents and rising property prices, landlords in England and Wales have experienced returns of 9.4% on average over the year to 30th September, up from 8.9% in August. This equates to an average total return of £16,950 before deductions, including maintenance and mortgage payments.

Chief Executive of Shelter, Campbell Robb, responds to the findings: “It’s time for George Osborne to give back hope to ordinary families who are priced out and losing out, by investing in the genuinely affordable homes we need, for renting or buying, in the upcoming spending review.”1

1 http://www.theguardian.com/money/2015/oct/16/average-monthly-rent-hits-record-high-of-816-highlighting-housing-shortage

House Building Set to Rise This Year

Published On: September 29, 2015 at 10:52 am

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House Building Set to Rise This Year

House Building Set to Rise This Year

House building levels are set to rise this year in the UK, according to data from the National House Building Council (NHBC).

Between June and August this year, 40,101 new homes were registered, an 11% increase on the same three months in 2014, when 36,149 new homes were registered.

Of these registrations, 8,310 were built in Greater London, while fewer homes were built in Wales, the South East, South West, Yorkshire and the Humber and the West Midlands.

The amount of new home registrations in the private sector during the June-August period hit 30,210, compared with 27,072 last year. In the public sector, 9,891 new homes were registered, up from 9,077 in the same three months in 2014.

However, the figures reveal that registrations for August alone were down by 6%, from 11,037 last August to 10,362 this year.

Last month, the private sector saw a slight drop of 1%, from 8,476 in August 2014 to 8,401 this year, and public sector registrations declined by 23%, at 1,961 compared to 2,561 last year. This decrease follows six consecutive months of growth when compared to last year.

Chief Executive of the NHBC, Mike Quinton, comments: “Despite a slight decrease for August, overall registration levels for the rolling quarter show the same steady growth we’ve seen throughout 2015.

“However, we are now seeing registration volumes fall in the public and affordable sector after a good start to the year.

“This may be due to many housing associations holding back on developments in light of welfare reforms and the cap on rental increases.

“We will closely monitor this over the coming months, along with the private sector, as the house building industry strives to build more new, quality homes that the UK needs.”1

1 http://www.propertyindustryeye.com/house-building-on-course-to-increase-this-year/

 

 

 

 

 

 

 

 

 

 

 

 

 

Right to Buy to be Funded by Sale of 113,000 Council Homes

Published On: September 18, 2015 at 1:47 pm

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Almost 113,000 council homes could be sold off in England to finance the Government’s Right to Buy scheme extension, according to a study by housing charity Shelter.

Under the proposal, councils must sell of their most expensive assets when they become vacant to fund the extension to 1.3m housing association tenants.

Shelter has analysed how many homes in each area would have to be sold if the thresholds for selling were set at the suggested level. If the prices were set at a regional level, expensive areas, like Oxford, could be set at the same thresholds as places such as Hastings, where property prices are much lower.

Right to Buy to be Funded by Sale of 113,000 Council Homes

Right to Buy to be Funded by Sale of 113,000 Council Homes

In London, it appears that one-bedroom properties worth over £340,000 would be sold, while in the North East, one-bed homes would be sold if they are worth more than £80,000.

In Kensington and Chelsea, Shelter found that 97% of council housing stock could be sold when it becomes vacant, almost half of all stock in Cambridge and a fifth of that in York.

Camden would also be one of the most affected areas, with over 11,700 homes potentially facing a forced sale – around half of the total council housing stock in the borough.

In total, Shelter estimates that 112,883 – around one in 14 (6.8%) – council homes in England could face a forced sale.

Its report states that a large number of housing association tenants could take advantage of the extension in the North East.

It says: “This will mean that housing subsidies flow from parts of the country where housing pressures are higher – like London, the South East and the East – to those where they are lower.”1

The extension of the scheme was a major plan in the Conservative’s general election manifesto.

Ministers claim that housing associations will be compensated with money raised by forcing local authorities to sell off their most expensive homes when they become vacant, ensuring that the affordable properties that are sold are replaced.

However, the proposal has been criticised by housing associations and opponents have questioned whether the homes that are sold off will actually be replaced.

Shelter says that even if the homes are sold, there could be a financial shortfall of £2.45 billion over four years.

Chief Executive of Shelter, Campbell Robb, says that selling off “large swathes of the few genuinely affordable homes we have left,” would worsen the country’s housing crisis.

He continues: “More and more families with barely a hope of ever affording a home of their own and who no longer have the option of social housing, will be forced into unstable and expensive private renting.

“The Government needs to scrap this proposal and start helping the millions of ordinary families struggling with sky-high housing costs.”1 

Shelter used Government house price data and lettings figures to make its calculations.

1 http://www.theguardian.com/money/2015/sep/17/113000-council-homes-to-be-sold-to-pay-for-right-to-buy-shelter