Posts with tag: Benham and Reeves

Housing pledges announced in Prime Minister Boris Johnson’s speech

Published On: June 13, 2022 at 8:57 am

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Housing pledges announced in Prime Minister Boris Johnson’s speech

Prime Minister Boris Johnson has announced a number of housing pledges. This includes extending Right to Buy to housing association tenants and allowing housing benefit to cover mortgage payments.

Responding to the announcement, Kiran Ramchandani, Director of Policy and External Affairs at Crisis, comments: “This ill-conceived announcement is the exact opposite of what we need to tackle the mounting housing crisis. For decades our social housing stock has been stripped bare, while over 96,000 people remain trapped in dingy B&Bs having given up all hope of ever moving into a home of their own. The notion that we’ll now sell off what little affordable housing we have left will only serve to make this situation worse.  

“The reality is that with housing benefit currently frozen, it’s barely enabling anyone to rent as it is. To suggest this money can now be used to secure mortgages without a costly investment to the benefits system is an utter fallacy.

“Moreover, it seems the Government is intent on creating a two-tier system where only working households will be able to use their housing benefit towards a mortgage payment, disregarding people with disabilities and those unable to work.    

“The only way to fix our broken housing system is to build more social homes which people can afford – we urge the Government to get on with doing this if we’re ever going to end homelessness for good.” 

Dan Wilson Craw, Deputy Director, Generation Rent, comments: “Ultimately, the Prime Minister failed to set out action to deal with the unaffordable level of house prices and rents.

“Neither the review of low-deposit mortgages, nor extending Right to Buy to housing associations will address the shortage of homes we need in places people most want to live. For that we need a programme of social house building beyond the one-to-one replacement of homes bought under Right to Buy.

“In the pandemic we heard from renters who had to pay rent with their hard-earned savings because they weren’t eligible for Universal Credit. Expanding eligibility to people saving a deposit will restore some fairness to the benefits system, but it’s important to remember that many more people with no savings are struggling to find somewhere to live with current Local Housing Allowance rates.

“Expanding housing benefit to cover mortgage payments is unlikely to help people currently receiving benefits to secure a mortgage when they won’t pass lenders’ affordability tests. However, depending on how lenders respond, it may help first-time buyers in work to get a mortgage. Right now, if you lose your job there is nothing to fall back on and that’s a risk for lenders.”

Marc von Grundherr, Director of Benham and Reeves, comments: “We’ve seen how previous initiatives allowing social tenants to purchase their properties has backfired, as it causes a significant shortage of stock for those most desperately in need of help, while also driving up property values in the process. 

“Of course, this time around it will be different, as they pledge to replace these purchased properties on a one for one basis. Unfortunately, if you believe that, you may also believe that the drunken shenanigans that took place at Downing Street during the pandemic really were innocent, work-related events. 

“The Government’s record of delivering new homes is woeful at best and social housing has long been an area of serious neglect. To allow them to auction off existing housing association stock while also failing miserably to replace it would be a big mistake indeed.”

James Forrester, Managing Director of Barrows and Forrester, comments: “Boris Johnson claims of a significant increase in the number of homes being built, but this simply isn’t true, which will come as little surprise given the fact that he’s lied to the British public time and time again. 

“In fact, the level of new homes reaching the market each year has fallen by fourteen percent and so once again, Boris’s bumblings couldn’t be further from the reality. 

“What’s more, promises to utilise Britain’s brownfield land is nothing more than a weary piece of recycled rhetoric, spouted on numerous occasions to create the illusion of tackling the housing crisis, but without actually following through with it.”

Average UK house price rises again, Halifax House Price Index reports

Published On: June 9, 2022 at 8:58 am

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Average UK house price rises again, Halifax House Price Index reports

Yet another record month has been reported for UK house prices, as Halifax sees continued growth.

The latest Halifax House Price Index states that house prices in May 2022 were 10.5% higher than May 2021. However, the monthly increase has slowed to 1.0%.

The average house price has been recorded as £289,099 by Halifax.

Geoff Garrett, Director of Henry Dannell, comments on the report: “A slower rate of house price growth is always likely to follow a reduction in buyer demand and that’s certainly what we’re now seeing following a dip in mortgage approval activity at the start of the year. 

“Buyers are acting with more caution with regard to the sums they are willing to borrow and, at the same time, lenders are reducing their range of products and increasing the rates they are prepared to offer. 

“However, it remains to be seen as to whether this more tentative approach will reverse upward house price trends completely, as insufficient stock remains an issue in the current market.”

Marc von Grundherr, Director of Benham and Reeves, comments: “The fact that the annual rate of growth continues to breach double figures is quite astonishing. 

“Although a slow in the rate of monthly house price growth may indicate an air of lethargy is starting to creep in following such a consistent run of upward growth, the market remains in very fine form.

“With market stock at a scarcity, it looks as though this upward trend is unlikely to subside any time soon, despite ongoing pressure in the form of the escalating cost of living and the threat of a further interest rate increase. 

James Forrester, Managing Director of Barrows and Forrester, comments: “Any mutterings of a property market crash have been greatly exaggerated and the UK property market has remained impervious to the dark clouds that have been gathering over the wider economy in recent months. 

“While many will be struggling with the increased cost of living, the hard task of saving is nothing new for the nation’s aspirational homebuyers who continue to swamp the market while the cost of borrowing remains very favourable.”

Christina Melling, CEO of Stipendium, comments: “It’s certainly a tough time if you’re a first-time buyer. Not only has the initial financial hurdle of buying grown immensely in the last decade, but the gaps between each rung of the property ladder have also become much further apart. 

“As a result, not only is it taking until far later in life to realise our dreams of homeownership, but the climb has become much harder and longer, even once we’ve secured that first foot.”

Chancellor announces plan to support cost of living crisis

Published On: May 30, 2022 at 8:18 am

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Research uncovers UK’s most unaffordable areas to rent a home

Chancellor Rishi Sunak has announced a package of support to address the rising cost of energy bills, including a £400 energy grant per household in October.

The Government has pledged:

  • Almost all of the eight million most vulnerable households across the UK will receive support of at least £1,200 this year, including a new one-off £650 cost of living payment
  • Universal support increases to £400, as the October discount on energy bills is doubled and the requirement to repay it over five years is scrapped
  • This new £15 billion support package is targeted towards millions of low-income households and brings the total cost of living support to £37 billion this year
  • New temporary Energy Profits Levy on oil and gas firms will raise around £5 billion over the next year to help with cost of living, with a new investment allowance to encourage firms to invest in oil and gas extraction in the UK

Responding to the announcement, Alicia Kennedy, Director of Generation Rent, comments: “This package is much closer to what people will need to manage rising prices, but one in three tenants have had rent rises this year, so many renters will still face agonising choices between eating, heating and paying rent.

“Tragically, because evictions without reason are still legal, renters have little choice but to cope with a rent hike. 

“Two issues need urgent attention.

“For renters living in homes where energy bills are included in the rent, such as shared houses, it is not clear if the landlord is under any obligation to pass this new support to them through a reduced rent. The government needs to clarify how it will ensure renters receive the package of support as the Chancellor intended.

“While benefits will rise in line with September’s inflation rate, Local Housing Allowance is still frozen at 2019-20 levels.

“We need a freeze on rents, an emergency pause on evictions and increase LHA to cover market rents.”

Matt Downie, Chief Executive of Crisis, comments: “Following today’s (26th May) announcement by the Chancellor households across England will be breathing a collective sigh of relief.

“We know from our frontline services just how desperate things had become, with people unable to keep up with rising rents and spiralling energy and food costs. This targeted support for those on the lowest incomes couldn’t have been more needed and, alongside the commitment to increase benefits in line with inflation next year, will help people to keep a roof over their heads as we weather this cost of living crisis.

“While the Chancellor outlined that today’s intervention was ‘timely, temporary and targeted’, there is also a pressing need for the Government to think long-term. We need a clear plan to deliver the genuinely affordable homes that are so desperately needed so that people are protected from any sudden economic shocks in the future.

“Never again should people be forced to endure the hardship and pain of recent months before Government takes action.”

Marc von Grundherr, Director of Benham and Reeves, comments: “While the monthly cost of a mortgage looks set to keep on climbing, a good number of UK households can breathe a sigh of relief as Rishi Sunak pledges further money to help alleviate the cost of living crisis. 

Over £15bn announced to help mitigate increased energy costs for those on benefits, pensioners and the disabled, will go someway in helping the most financially vulnerable in society and the refreshed reduction in council tax will also help ease monthly living costs, with a £400 reprieve that is no longer required to be repaid.”

James Forrester, Managing Director of Birmingham estate agent Barrows and Forrester, comments: “A step in the right direction but far too little, too late, for many of the worst hit UK households. 

“Quite frankly today’s (26th May) announcements feel like forced rhetoric from a government on the back foot and as we know all too well, the results rarely match the headlining fuelling hot air.”

What about reducing the cost of energy at the pump to make an immediate, meaningful impact?”

Government reports continued UK house price growth

Published On: May 18, 2022 at 3:28 pm

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Treasury loses £1.5 billion since hike in rented housing tax

The House Price Index for March 2022 has been published by the Government, revealing the latest house price changes for England, Scotland, Wales, and Northern Ireland.

The report states that the March data shows:

  • On average, house prices have risen 0.3% since February 2022
  • There has been an annual price rise of 9.8%, which makes the average property in the UK valued at £278,436

James Forrester, Managing Director of Barrows and Forrester, comments: “The economy continues to wobble against a backdrop of rising inflation and the cost of living crisis and so the old adage of ‘what goes up must come down’ may certainly be on the minds of many where the UK property market is concerned. 

“So far, this worry is yet to be realised and the market continues to move forward at speed, seemingly impervious to the influence of the wider economic landscape.”

Marc von Grundherr, Director of Benham and Reeves, comments: “The winds of change are certainly starting to blow and while this building economic headwind is yet to derail the phenomenal rates of house price growth being seen across the UK on an annual basis, it certainly seems as though dark clouds are gathering on the horizon with a reduction in pace already materialising on a monthly basis.”

Chris Hodgkinson, Managing Director of HBB Solutions, comments: “The property market remains awash with homebuyers keen to climb the property ladder and with stock levels remaining insufficient, this heightened demand is continuing to drive house prices upwards on an annual basis. 

“However, with interest rates rising and inflation at a 40 year high, mutterings of a looming recession could soon reverse the market conditions seen in recent years and we’re already starting to see a slowdown on a month to month basis. 

“Should this come to fruition, many sellers may find it a struggle to secure a buyer and for a price they are happy with.” 

Rightmove reports ‘best ever spring sellers’ market’ for the UK

Published On: April 26, 2022 at 9:56 am

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Rightmove reports 'best ever spring sellers’ market' for the UK

Rightmove has reported a new record for average house prices, as it sees the ‘best ever spring sellers’ market’.

The average house price in the UK was £354,564 in March 2022.

James Forrester, Managing Director of Barrows and Forrester, comments: “Since early 2020, an unrelenting level of homebuyer demand has fuelled a property market boom that shows no signs of slowing some two years down the line.

“Such sustained market conditions are quite phenomenal and as cliche as it sounds, there really never has been a better time to sell your house. 

“To say homes are selling like hotcakes would be an understatement and with multiple buyers battling it out for every last scrap of property stock, sellers are achieving above and beyond their original price expectations.”

Marc von Grundherr, Director of Benham and Reeves, comments: “As a nation, we’ve endured a prolonged period of economic instability due to the pandemic and yet more dark clouds are gathering due to the cost of living crisis. But despite this the UK property market remains a powerhouse of defiance, demonstrated by the fact that every region of the nation has reached record price highs in unison. 

“Although London continues to trail where this asking price performance is concerned, we’ve already seen concrete signs that the market is starting to turn in 2022, putting a sluggish pandemic performance firmly behind us.

“It will, of course, take some time before this starts to filter through and bolster home seller confidence within the capital, but when it does, it won’t be long before asking price expectations start to climb considerably. So while it very much remains a sellers’ market across the board, now is the time to buy in London as property prices are only heading one way for the remainder of the year, at the very least.” 

Geoff Garrett, Director of Henry Dannell, comments: “There’s no denying that the property market has performed impressively and with the cost of borrowing remaining favourable at present and buyer demand levels unlikely to subside, the short-term outlook remains positive. 

“However, both buyers and sellers would be well advised to make hay while the sun is shining, as growing economic headwinds are likely to take their toll further down the line. 

“While we don’t expect to see market activity evaporate completely, the growing cost of living will be a significant factor in the months to come and as household finances are stretched, it’s likely that prospective buyers will ease off on the sums they’re willing to offer. As a result, sellers will need to realign themselves with these changing market conditions and this will cause the rate of house price growth to cool.”

Chris Hodgkinson, Managing Director of HBB Solutions, comments: “The market is moving at an incredibly fast pace and this certainly favours the nation’s home sellers who are spoilt for choice when it comes to the interest shown in their property. 

“Despite these favourable conditions they are still advised to act with a level head and avoid getting swept up by this cyclone of market activity.

“The highest offer isn’t always the best option and it’s important to consider a buyer’s position within the market, not just the money they’re willing to pay. Failing to do so can see a sale collapse and unnecessary additional costs incurred.” 

Christina Melling, CEO of Stipendium, comments: “What we’re currently seeing is a feeding frenzy from second and third rung buyers and it’s this segment of the market that is driving the unsustainable levels of house price growth seen in recent months.

“Unfortunately, it’s the nation’s first-time buyers who are paying the price and those looking to take that first step are now paying £2,000 more for the pleasure compared to just one month ago. While this may not sound significant to those with the financial foundation of an existing property to fund their onward purchase, it’s yet another brick in an already substantial financial wall that’s blocking many from realising their dreams of homeownership.”

Government releases latest house price data for February 2022

Published On: April 14, 2022 at 8:02 am

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Treasury loses £1.5 billion since hike in rented housing tax

The Government’s UK House Price Index shows that average house prices increased 10.9% in the year to February 2022. The average price of a UK property in February was £276,755.

James Forrester, Managing Director of Barrows and Forrester, comments: “To say we’ve seen a fast start to the year would be somewhat of an understatement where current property market performance is concerned.

“Despite the wider narrative of financial turmoil that is impacting many households, we’ve seen an unrelenting level of homebuyers continue to enter the market in search of what is likely to be the most expensive purchase they will make in their lifetime.

“As a result, we’re seeing homes go under offer at an extremely quick pace, within days of listing them online in many cases, as buyers tussle over what limited stock there is available.”

Chris Hodgkinson, Managing Director of HBB Solutions, comments: “An incredibly competitive market is great for those looking to sell, but for homebuyers entering the fray it can be a stressful and expensive endeavour.

“Not only are they already facing a far higher cost when it comes to climbing the ladder, but pickings are slim in terms of the stock available.

“This not only makes it harder to find their ideal home, but when they do, many are being beaten to the punch, outbid during the offers stage and even gazumped when they think they have finally secured a property.”

Christina Melling, CEO of Stipendium, comments: “The current property market boom is being widely touted as a key indicator of economic success against an otherwise gloomy pandemic backdrop. But while those lucky enough to already own a home may agree, it’s unlikely this sentiment is shared by those struggling to get a foot on the ladder.

“The average first-time buyer is now over £21,000 worse off than just a year ago having seen the value of a first home increase by 10.1%.

“While the cost of borrowing may remain favourable, the initial financial hurdle of a mortgage deposit is simply too much for many to overcome. With the cost of living also climbing, those previously struggling to save will no doubt find the task almost impossible going forward.”

Lee Martin, Head of UK for new-build specialists Unlatch, comments: “Demand for new homes has only grown stronger in 2022 and the sector is certainly playing a pivotal role where market performance is concerned. This is evident by the fact that new-build house prices are climbing at more than double the rate of the existing market and so it’s fair to say the sector is the engine room driving current rates of house price appreciation.

“But despite this strong performance, it’s also fair to say that the sector is helping beleaguered first-time buyers by enabling them to reduce the sizeable financial barrier of a mortgage deposit by utilising the Help to Buy scheme.

“So while the Government has largely failed in its ambitions to build more homes, the nation’s housebuilders have taken up the mantle to keep Britain building, delivering housing stock that is sorely needed at all levels of the market.”

Geoff Garrett, Director of Henry Dannell, comments: “The market has continued to excel despite what is a very delicate economic landscape and while the cost of borrowing has remained fairly favourable, those currently looking to buy should tread very cautiously with regard to over borrowing.

“It remains to be seen as to whether the cost of a mortgage will climb substantially this year, but with the wider cost of living also putting a squeeze on household finances, those borrowing well beyond their means may fall into financial difficulty further down the line.”

Jonathan Samuels, CEO of Octane Capital, comments: “Mortgage rates have already climbed by one percent so far this year and they are only going to go in one direction.

“So while many homebuyers may find that the cost of borrowing remains fairly affordable at present, they can expect this cost to increase over the coming months.

“While this won’t stall the market completely, it will certainly dampen market activity and it’s only a matter of time before this impacts house prices.”

Marc von Grundherr, Director of Benham and Reeves, comments: “While the London market continues to trail the house price pack where annual rates of appreciation are concerned, February’s explosive monthly increase provides the first signs of how quickly the tide is starting to turn.

“We’ve seen a sharp uptick in market activity on the ground for some months, driven by the return of both domestic professionals and foreign buyers, and this is now starting to translate into positive market momentum.

“Although the wider UK market may be susceptible to higher mortgage rates and the increasing cost of living, this is less likely to faze buyers within the capital. So we expect to see a complete role reversal with regard to property value performance as the year goes on.”