Posts with tag: general election

Property Market Responds to Hung Parliament Result

Published On: June 9, 2017 at 8:20 am

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Yesterday’s General Election has ended in a hung Parliament, meaning that no party has an overall majority. So what happens now?

In the current hung Parliament, the Conservative Government will remain in office until it is decided who will attempt to form a new government, or unless she decides to resign.

Property Market Responds to Hung Parliament Result

Property Market Responds to Hung Parliament Result

There may be frenzied talks between the party leaders and their negotiating teams as they try to put together another coalition government, or a looser deal to put either Theresa May or Labour’s Jeremy Corbyn – the only two people with a realistic change – into power as prime minister.

Or, one of the two party leaders could opt to go it alone and try to run a minority government, relying on the support of smaller parties when needed to get their laws passed.

The Founder and CEO of online estate agent eMoov.co.uk, Russell Quirk, offers the property market’s reaction to the hung Parliament result: “As we awake today to the opposite of a strong and stable administration but to a rather unexpected hung Parliament, I fear that the property market’s post-election return to normality that I’d hoped for may be rather further away still.

“Political instability breeds procrastination on the part of homebuyers and sellers and, for over a year now, we have seen the effects of that on volumes, if not so much prices, as a consequence of the EU vote and then the snap General Election.

“A hung Parliament means that Theresa May does not have the mandate that she sought for herself and for a hard Brexit. Whilst the Conservatives may be able to form a minority government propped up by the DUP in Northern Ireland, we now face the serious prospect of the selection of a new prime minister and then, probably, a further General Election in the autumn.”

He continues: “So whilst the UK voter may understandably develop electoral fatigue, transactions in the property market may also stay somewhat anaesthetised until it’s re-awoken by something more politically and economically decisive than we have seen over the past 24 hours.

“In addition to the prospect of Theresa May being forced out for grabbing humiliation from the jaws of victory, we will also see yet another housing minister in post by next week, given that Gavin Barwell has just lost his Croydon Central seat. That’ll be our sixth housing minister in almost as many years.

“Regardless, I suspect that the housing brief will take a back seat now, despite politicians’ promises in recent weeks, given the combined weight of negotiating Brexit, stabilising our economy, button-holing political support across the aisle on every vote and, inevitably, campaigning again for the next poll.”

We Don’t Need to Sacrifice Quality for Quantity, Insists LendInvest

Published On: June 8, 2017 at 8:14 am

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By Ian Thomas, Co-Founder and CIO, LendInvest

There have been some positive signs of late that housebuilding in the UK is turning the corner. For example, last month, the National House Building Council announced that registrations – where builders make a payment for insurance on projects which haven’t yet started – have hit the highest figure seen in ten years.

But in the rush to ramp up the number of homes being built, there is little doubt that some corners are being cut. We have had major housebuilders admit to handing over cash incentives to encourage new homebuyers to complete on homes that haven’t actually finished yet, paying compensation for unacceptable flaws with new homes or announcing that they will slow down the rate of building in order to try to improve the quality of the homes being produced.

According to a recent study by Shelter, more than half of buyers of new build properties had experienced major problems after the purchase had gone through, from construction issues to unfinished fittings and flaws with utilities. That’s just not good enough.

When the Government described the housing market as broken in its Housing White Paper this year, most took them to be talking about the market as a whole – not the actual properties being built.

We are leaning too much on the big builders

We Don't Need to Sacrifice Quality for Quantity, Insists LendInvest

We Don’t Need to Sacrifice Quality for Quantity, Insists LendInvest

It’s no secret that housebuilding has lagged significantly behind demand for a long time. A report from the House of Lords last year suggested that around 330,000 new homes need to be built each year in order to make a difference to rapid house price growth, yet last year the nation could only manage 170,000. And that was a good year by recent standards.

The problem is that we still look to the housebuilding giants, who have dominated the market over the last couple of decades, to do more. But this pressure to increase production is leading to mistakes being made and shortcuts being taken.

It may be that these large builders are simply at their maximum building capacity – if we are to improve the rate of housing production, we need to see homes being produced by a much wider range of sources.

That means doing far more to boost the small and medium-sized builders who are desperate to build homes but face a host of serious barriers, which is holding them back.

Helping the small builder

It’s not that long ago that the small builder played a far more serious role in the housebuilding market in the UK. Before 1990, they were responsible for three in every eight new homes. Today, that number has plummeted to a paltry one in eight, while 80% of small firms have gone out of business since the last housebuilding boom.

Small builders are being pushed out, denied access to public land for development and denied tax breaks open to other small businesses. This cannot carry on – we need to level the playing field, remove these barriers and give small builders the push they need.

Helping small developers build the skillset they need to make a success of their projects is hugely important, and it’s something LendInvest has tried to address with our series of Property Development Academies. That demand has been so strong – and from across the country, to the point that we are now holding them in Manchester, Birmingham, Bristol and Edinburgh – is an encouraging sign that while small builders have faced unfair hurdles for too long, the desire to clear them and get on with building homes is still there.

If small builders have the appropriate skills, the proper funding, and the access to quality land on which to build, then there can be no doubt that they can play a huge role in addressing the housing shortage.

The time for talk is over

With the General Election upon us, all of the major parties have been very open in acknowledging that the current housing problems cannot be allowed to continue. But the time for talk has long since passed, so, come June 9th, whoever it is that takes up residency in Downing Street needs to push for tangible, meaningful action.

We have a whole generation of would-be developers, who want to help produce quality homes. But they need some help getting there, and it is up to us as an industry to continue to champion them and make their case. If some of those barriers can be removed, we will quickly see the SME builders begin to flourish, and the rate of housebuilding increase.

It doesn’t have to be a question of quality or quantity. By standing up for the little guy, we can have both.

If you’re still unsure of who to vote for, read through what each of the main political parties is pledging on housing: https://www.justlandlords.co.uk/news/main-political-parties-pledges-housing/

Property supply rises ahead of General Election

Published On: June 7, 2017 at 9:31 am

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The most recent report from HouseSimple has indicated that there was a 7% increase in property supply across the UK during May.

This increase comes after a 4% fall in April and suggests that sellers want to secure an offer before the impending General Election result in early June.

New Property Listings

Almost 80% of towns and cities covered by the report saw an increase in new property listings in May in comparison to April.

The largest rises were evident in Barnsley, Wolverhampton and Canterbury, with new listings here totalling 74.6%, 52.1% and 51.9% respectively.

However, the report does show that levels of supply have swung substantially in many areas during the last two months. Oldham and Northampton saw new listings rise significantly in April but drop in May.

In London, the ups and downs of new property supply in May across all 32 boroughs were less vivid than in April. New property listings here were up by 5.2% during the last month.

Two areas that did see significant swings were Newham and Sutton. Newham saw a rise of 23.5% in May, compared to a decline of 15.8% in April. On the other hand, Sutton saw falls of 28.1% in May, with a drop of 19.2% in April.

Property supply rises ahead of General Election

Property supply rises ahead of General Election

Uncertainty

Alex Gosling, CEO of HouseSimple noted: ‘Political and economic uncertainty surrounding a General Election can often see sellers hold off marketing until after the result is known. However, the 7% rise in May suggests many sellers aren’t waiting and marketed their properties last month to try and secure an offer before the Election result.’[1]

‘There is something to be said for doing this. The Spring period, traditionally a buoyant time for the property market, has been knocked off kilter by Article 50 being invoked and the PM calling a General Election. As a result, we could see a late Spring bounce after the Election result, with a stampede of sellers putting their properties onto the market before the summer holidays. It doesn’t give home sellers a lot of time to secure a sale and the savvy and committed seller, willing to negotiate on price could well have seen an opportunity to beat this stampede and steal a march on their competition,’ he added.[1]

[1] http://www.propertyreporter.co.uk/property/general-election-sparks-rise-in-property-supply.html

 

UK Property Market Shows Momentum Pre-Election

Published On: June 7, 2017 at 8:14 am

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The UK property market is showing momentum ahead of this week’s General Election (on Thursday 8th June), according to Agency Express.

Following a slowdown across the UK property market in April, the latest Property Activity Index from Agency Express shows that the pace picked up during May.

UK Property Market Shows Momentum Pre-Election

UK Property Market Shows Momentum Pre-Election

Monthly data shows nationwide increases in both new property listings, up by 9.6%, and the number of properties sold, at 12.3%.

On an annual basis, new listings have continued to rise, while the amount of properties sold has declined.

Regionally, Agency Express found that nine of the 12 regions included in its Property Activity Index saw growth in new property listings in May, while ten recorded increases in the number of properties sold.

May’s most prominent performers were London and the South East, with both regions recording robust growth in May.

New listings in the capital were up by 24.6%, with the number of properties sold rising by 21.3%. In the South East, new listings increased by 23.5%, while property sales rose by 22.5%.

Other hotspots in May’s Property Activity Index include:

New property listings 

  • Scotland: +28.6%
  • Central England: +11.4%
  • East Anglia: +8.9%

Properties sold 

  • North East: +20.1%
  • North West: +19.4%
  • East Anglia: +11.9%

The greatest decreases in May’s index were recorded in Wales. The number of properties sold fell for a second consecutive month, by 3.5%, as did new property listings, by 0.9%. However, the Property Activity Index’s rolling three-monthly data shows more stability, with new listings up by 2.3%.

The Managing Director of Agency Express, Stephen Watson, comments on the figures: “During May, we traditionally see a slower pace throughout the UK property market and, with the imminent General Election, a slowdown on some level was anticipated.

“However, this month’s figures have exceeded our expectations and activity is more robust compared to figures recorded in 2015. Looking forwards, we won’t see the full impact of the General Election until June’s figures are collated, so it will be interesting to see if and how the usual trends of the market are affected.”

Annual Rent Price Growth Drops for First Time in Eight Years

Published On: June 6, 2017 at 9:48 am

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Annual Rent Price Growth Drops for First Time in Eight Years

Annual Rent Price Growth Drops for First Time in Eight Years

Annual rent price growth across the UK dropped for the first time in almost eight years in May, according to the latest Rental Index from HomeLet.

The data shows that the average rent price on a new tenancy commencing in May was £901 per month – 0.3% lower than in the same month of 2016.

Rents on new tenancies in London were also 3% lower than in May last year, at an average of £1,502 – the greatest decline for eight years.

This is the first time since December 2009 that the HomeLet Rental Index has recorded a fall in rent prices on an annual basis.

The rate of rent price growth across the UK has been slowing in recent months, having peaked at 4.7% last summer.

The Chief Executive of HomeLet, Martin Totty, comments on the figures: “May 2017 saw average rents nationally fall for the first time in eight years, when the economy had suffered the shock of the financial crisis.

“HomeLet rental data suggests landlords are now facing a difficult balancing act between ensuring rents are affordable for tenants in a low real wage growth environment, whilst covering their own rising costs.”

He continues: “Tenants will still need a vibrant and growing rented sector to provide them with property options at the time of their choosing. Any constraint to the supply of rental properties, because landlords are unable to achieve the reasonable returns they require, cannot be in the long-term best interests of tenants, especially if, as we’ve now heard from all the main political parties, the UK’s population continues to grow.”

Here’s how rent price growth has varied across the UK:

Region

 Average monthly rent – May 2017 Average monthly rent – April 2017 Average monthly rent – May 2016 Monthly variation

Annual variation
East Midlands £614 £604 £595 +1.6% +3.3%
North West £679 £677 £664 +0.2% +2.2%
South West £803 £802 £787 +0.2% +2.1%
Wales £605 £610 £594 -0.8% +1.8%
East of England £909 £904 £904 +0.5% +0.6%
Northern Ireland £609 £614 £606 -0.9% +0.4%
West Midlands £658 £661 £656 -0.5% +0.3%
Yorkshire and the Humber £614 £619 £618 -0.7% -0.6%
South East £998 £1,003 £1,014 -0.4% -1.5%
Scotland £622 £632 £634 -1.6% -1.9%
North East £522 £525 £534 -0.7% -2.3%
Greater London £1,502 £1,519 £1,548 -1.1% -3.0%
UK £901 £904 £904 -0.3% -0.3%
UK excluding Greater London £753 £754 £750 -0.1% +0.5%

Are you still considering who to vote for in Thursday’s (8th June) General Election, online estate agent eMoov has analysed which political party has been best for the property market since 1970: /best-political-party-house-price-growth/

Hannah Maundrell, the Editor in Chief of money.co.uk, also comments on the HomeLet statistics: “Tenants have been bashed by rising rents for years, so signs the sharp rises may have subsided will come as welcome relief for anyone looking to move. Not least because the surprise slowdown is the exact opposite of what we expected would happen following the tax changes that cropped profits for many buy-to-let landlords.

“The slowdown may sound like good news, but it comes after years of steep hikes that have left rent unaffordable for many. It’ll be interesting to see how the rental market fares post-election, as all of the larger parties have made bold pledges over the housing market.”

She continues: “While some may take the slowdown as proof the economy is about to take a turn for the worst, this may not necessarily be the case. It’s true that inflation is starting to hit pockets and that skyrocketing rents has made life difficult for many. However, this could simply be the market evening out; the demand for rental property is certainly still there.

“On the plus side, this does shift the power away from landlords slightly and give tenants a little more negotiation power on price if they’re looking to move to a new property or renew their contract.

“Taken together with the slowdown in car and retail sales, it’d be easy to paint a bleak picture; but we have to remember that sales exceeded expectations in the first quarter and at the end of last year. So much so, the Bank of England became very worried about consumer spending and debt. There’s only so much money we can spend; it’s quite possible these figures are a reflection of the fact we’ve already made our big purchases for the year.”

Trade Union Backs Labour in Election as House Price to Earnings Ratio Hits 8.2

Published On: June 6, 2017 at 9:13 am

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Trade union GMB has backed Labour in Thursday’s (8th June) General Election, following its pledges to build more council homes, after research showed that average house prices in England have hit 8.2 times typical earnings.

Trade Union Backs Labour in Election as House Price to Earnings Ratio Hits 8.2

Trade Union Backs Labour in Election as House Price to Earnings Ratio Hits 8.2

The analysis by the London division of the GMB, based on Land Registry house price figures and Office for National Statistics (ONS) earnings data, showed that in the East of England, the average house price in March 2017 was £277,127, which is a huge 9.2 times the average full-time earnings for the area, of £30,000.

The situation was worst in Three Rivers, where average house prices are 15.9 times typical wages, followed by 15.1 in Hertsmere, 13.6 in Cambridge, 13.4 in St Albans and 12.9 in Epping Forest.

Across England as a whole, house prices were 8.2 times average earnings.

Warren Kenny, the London region secretary of GMB, insists that these statistics show that voters should back Labour in the General Election, due to its pledges to build one-million homes in the next parliament – half of which would be council houses.

Kenny explains: “GMB London region analysis of average house prices to average earnings in the East of England shows that the aspirations of working people on average earnings and below to own their own homes is no longer achievable.

“The Labour Party election manifesto pledges to build one-million homes in the next parliament, with half of them council housing. These figures show that more council homes for rent in all council areas are absolutely essential.”

He urges: “GMB is calling on the electorate in the East of England to get behind their Labour Party candidates in the area to realise this manifesto commitment.

“We have been talking about this problem for far too long. There can be no excuses for not providing housing to people that they can afford to live in on average wages.”

If you’re still contemplating who to vote for, this analysis by eMoov shows which political party has been best for house price growth since 1970: /best-political-party-house-price-growth/