Posts with tag: housebuilders

Small-Scale Developers Critical in Solving the Housing Crisis, Insists Investor

Published On: January 23, 2017 at 9:30 am

Tags: housebuilders,housing crisis,property developers,property investors

Property investor and lender LendInvest insists that small-scale developers are critical in solving the housing crisis, following its second Property Development Academy course.

The LendInvest Property Development Academy was created to teach aspiring small-scale developers the skills they need to build more homes.

Small-Scale Developers Critical in Solving the Housing Crisis, Insists Investor

The course is a non-profit, two-day intensive programme that takes 25 attendees through seven practical, hands-on modules covering the full development process. Sessions are led by experienced advisers and academics who understand how to keep small-scale developers on time and on budget.

With the Government failing to build the homes they pledge, LendInvest insists that small-scale developers have a huge opportunity open to them. At its latest Property Development Academy, the firm claimed that small-scale developers are critical in solving the housing crisis.

John Slaughter, the Director of External Affairs at the Home Builders Federation, spoke at the event: “The cumulative undersupply of homes is a serious issue in this country. It is widely accepted that we need small housebuilders to enter the market and we need them to grow if we are to meet the challenge of delivering more homes.

“The housebuilding industry is not an easy professional endeavour and people coming into it as new entrepreneurs benefit from initiatives such as the LendInvest Property Development Academy.”

LendInvest’s CIO and co-founder, Ian Thomas, added: “Our Development Academy is providing property entrepreneurs with the tools they need to get their projects off the ground, supporting them to navigate the challenges of securing land, obtaining finance and ultimately adding to the nation’s housing stock. The support of the Home Builders Federation for the academy underlines demand from across the industry to promote property entrepreneurship and reverse the decline of small-scale housebuilders.

“With Government set to publish a white paper on housing in the coming weeks, we encourage Housing Minister Gavin Barwell to support the small-scale property investors and developers who play a critical role in delivering the homes communities need most.”

Are you thinking of joining the world of small-scale developers? Find out more about the course here: https://developmentacademy.lendinvest.com

Stamp Duty should be scrapped for professional investors

Published On: June 6, 2016 at 1:55 pm

Author: Em Morley

Categories: Finance News

Tags: built to rent,housebuilders,investors,Stamp Duty

The Better Renting for Britain campaign have called for professional investors to be made exempt from the 3% Stamp Duty surcharge.

Some of the most recognisable investors in the country have written an open letter to the Housing Minister Brandon Lewis. The letter asks for an exemption from the extra surcharge, introduced on April 1^st.

Stamp Duty

Institutional investors who have invested significant sums of cash in Build to Rent schemes were deterred when Chancellor Osborne announced that they would be subjected to the additional charge.

The letter to Mr Lewis has been signed by 11 companies and outlines a three-point action plan that could see 250,000 additional homes built for rent. This in turn would help to deliver on its promise to build one million homes by 2020.

Signatories to the letter include Grainger Plc, Essential Living, LaSalle Investment Management, Fizzing Living and Hermes Investment Management.

Facing facts

Martin Bellinger, chief operating officer at Essential Living said, ‘until we face up to the fact that promoting home ownership at all costs will lead us nowhere, Britain will not overcome its housing shortage. The housing minister has been very supportive of Build to Rent, but what’s crucial is that the prime minister and chancellor recognise the contribution this could make to helping them keep their promises on building a million homes by 2020.’[1]

Helen Gordon, chief executive at Grainger Plc, feels that it is vital that the Government does all it can to housebuilders to develop more homes.

Gordon said, ‘our vision is for a better rental market, underpinned by good value for money for our customers, supporting economic growth and housing supply. We are looking to invest hundreds of millions of pounds into new rental homes, designed specifically for the renting, which we will directly manage for many years to come.’[1]

Stamp Duty should be scrapped for professional investors

Potential

Chris Taylor, head of private markets at Hermes Investment Management, believes that experience from countries such as Germany and Holland shows that there is potential for a profitable Build to Rent market here in the UK.

Mr Taylor said, ‘crucially, this investment will typically be long term institutional programmes committed to providing institutional quality and professionally maintained, purpose built rental blocks. Designating sites as suitable for Build to Rent in local plans, as well as identifying public land sites, will greatly assist new supply.’[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2016/6/investors-want-extra-stamp-duty-scrapped

Are Housebuilders Restricting Housing Supply to Boost Profits?

Published On: March 2, 2016 at 3:33 pm

Author: Em Morley

Categories: Property News

Tags: housebuilders,housing crisis,housing supply,property development

Housebuilders have been accused of restricting housing supply in order to boost their profits, by keeping house prices artificially high.

Recent data shows that almost half a million homes in England have had planning permission granted, but have not yet been built. The length of time it takes for property developers to complete a home has also risen from 24 months to 32.

The figures have reignited a long-running disagreement between policymakers and housebuilders over who is to blame for the current housing supply shortage.

While rates of planning permission for new homes have jumped by 60% since 2010, there has only been a 48% increase in the amount of new homes being built.

Labour MP Clive Betts, the Chair of the Local Government Select Committee, claims the failure of the big housebuilders to speed up development was designed simply to boost their profits.

He comments: “I think it is clear that the big developers are building at a rate to maximise their profits, rather than addressing the country’s housing need.”

He notes that some developments have had planning permission, but are not due to be completed for another ten years.

“These are private companies who are very simply trying to make money for their shareholders,” he adds. “They are restricting supply and the Government urgently needs to come forward with measures to address this.”¹

Ministers are becoming increasingly concerned about the failure of developers to speed up house building. There have been reports that some Conservative Party members believe that some housebuilders are deliberately restricting the supply of new homes to increase their profits.

Are Housebuilders Restricting Housing Supply to Boost Profits?

The Housing Minister, Brandon Lewis, has his own frustrations with property developers.

He told the Local Government Committee: “When you have got housebuilders delivering, on average, 48 homes a year on some [large] sites, that’s not good enough.

“We know they can go further. Housebuilders will talk about saturating the market. But we are aware that in too many places, we are still taking 20 weeks to build a house when we can do it in three or four.”¹

Recently, Taylor Wimpey announced a record operating profit margin of more than 20%, as it sold more houses at higher prices. Pre-tax profits at Britain’s biggest housebuilder, Barratt Homes, have also surged by 40% in the past six months, to almost £300m.

It is believed that ministers are considering new measures to speed up the rate of development, amid concerns that they will not hit their target to build 1m new homes by 2020.

New policies could include forcing housebuilders that buy publicly owned land to commit to rapid construction as part of the planning process.

Glenigan, the housing industry analyst, compiled the latest data for the Local Government Association, which was released in January.

It found that 475,647 homes in England that have been granted planning permission were yet to be built in 2014/15.

In 2012/13, the total number of homes given planning permission that were yet to be built was 381,390, and 443,265 in 2013/14.

A spokesperson for the Home Builders Federation, which represents developers, reports that the most recent Government figures show there were 170,690 net additions to housing stock during 2014/15 – a 25% increase on the previous year.

They claim: “The industry has delivered unprecedented increases in supply over the past two years, driven predominantly by the large private sector housebuilders.

“This has been on the back of the pro development policies introduced in recent years and a general increase in demand.”

They blame the planning systems of local and central government for the shortage of housing supply.

“As a priority, it needs to work with local authorities to speed up the planning system and ensure local plans allocate enough sites of different types and sizes that are attractive to a range of companies.”¹

The latest property news can be found at LandlordNews.co.uk.

¹http://www.theguardian.com/business/2016/mar/01/developers-restricting-supply-of-new-home-to-boost-profits

Building 180,000 homes is unachievable

Published On: April 27, 2015 at 3:18 pm

Author: Em Morley

Categories: Landlord News

Tags: development sector,housebuilders,local planning departments

New research has indicated that a vast number of UK housebuilders believe that building in excess of 180,000 properties per annum is remotely unachievable.

A report from Knight Frank suggests that 67% of housebuilders feel that the absolute maximum number of homes that can currently be delivered are 180,000 or less. Only 9% of respondents said that building 200,000 or more homes per year is currently achievable.[1

More than 50% of housing developers felt that an increase in the number of affordable homes during the next twelve months was unlikely. 60% however said that they expect a steady rise in the total number of housing starts and completions during the next year.[2]

Price increase

In line with housing prices in general, 78% of respondents feel that new-build property prices will rise in the coming months, with 43% expecting a rise of 5%.[3]

However, 91% said that they felt pressure on housebuilders would rise with increased construction costs. 59% felt that these costs could rise between 5-10% as early as this year. 68% also expected Greenfield land prices to rise.[4]

Policies

The survey from Knight Frank also asked housebuilders about what policies they felt could be introduced in order to secure long-term housing provision in the United Kingdom. 82% replied that improving resources for local planning departments would be most effective, with 58% believing that further training within the industry would help. 57% said that more access to public land would also assist with the issue.[5]

Building 180,000 homes is unachievable

Head of Knight Frank UK Residential Research Grainne Gilmore said that, ‘in the run-up to the election, all political parties agree that the delivery of more new homes is a priority.’ Gilmore suggests that, ‘policymakers, especially those in power after the election, may want to heed the calls from housebuilders to beef up planning departments in local authorities, plough more investment into skills and training in the construction sector and provide better access to public sector land’[6]

Justin Gaze, Joint Head of Residential Development at Knight Frank, also commented,’ the capacity to deliver the sheer number of new homes required is the fundamental issue faced by the UK’s housebuilders.’ Gaze believes that, ‘the inability to create the necessary number of new homes is being driven primarily by a skills shortage in the development sector which shrunk dramatically following the financial crisis.’[7]

[1-7] http://www.propertyreporter.co.uk/property/is-180000-new-homes-a-year-achievable.html