Posts with tag: housing crisis

Has the Government Delivered Yet More Empty Promises on Housebuilding?

Published On: November 24, 2016 at 10:21 am

Tags: affordable homes,Autumn Statement,housebuilding,housing crisis

In his first Autumn Statement yesterday, Chancellor Philip Hammond went some way to ensuring the property market works for everyone by announcing measures to boost housebuilding. But has the Government delivered yet more empty promises?

Has the Government Delivered Yet More Empty Promises on Housebuilding?

Ahead of the address yesterday, the Managing Director of the National Association of Estate Agents (NAEA), Mark Hayward, welcomed the plans for a £1.4 billion funding injection for housebuilding. He also praised the relaxation of how existing affordable housing funding can be used, believing this would help to diversify the country’s housing mix, creating the homes that people want and need.

“However, the creation of 40,000 new homes that this new funding is expected to deliver is still painfully short of the number of affordable homes we need to solve the housing crisis and get first time buyers on the housing ladder,” Hayward expressed ahead of the Autumn Statement.

He continued: “We hope that the Government will announce an intent to do much more when it releases a widely expected White Paper at the Autumn Statement. It is vital that the Government uses this to signal a radical rethink in its housing strategy and consider measures such as building homes on unused greenbelt land to really kickstart the housebuilding boom we badly need.”

So did the Chancellor deliver on his pledge, or has the Government simply offered yet more empty promises when it comes to housebuilding?

Speaking after the Autumn Statement, Hayward said: “The measures announced during the Autumn Statement today to boost housebuilding go some way to making the housing market work for everyone, but, quite frankly, do not go far enough.

“The Housing Instructure Fund, as well as the fund to build 90,000 affordable homes in London will act as catalysts to start closing the gap between supply and growing demand, but what we really need to see now is properties being built quickly.

“The Government has a long-standing history of announcing numerous housebuilding pledges, but in the last few years, we’ve not seen a sufficient impact on supply to make a dent in providing the affordable homes we really need.”

He holds on to hope: “The detail in the Housing White Paper will be crucial – let’s hope there are far more detailed plans in there when it is released.”

We will continue to keep you updated on the Government’s housebuilding plans at LandlordNews.co.uk.

Hammond Should Have Addressed Stamp Duty, Insists eMoov

Published On: November 24, 2016 at 9:40 am

Author: Em Morley

Categories: Finance News

Tags: Autumn Statement,housing crisis,letting agent fees,Stamp Duty

Yesterday, Chancellor Philip Hammond delivered his first Autumn Statement, detailing his fiscal plan for the near future. While housing featured heavily in the strategy, Hammond should have addressed Stamp Duty, insists a leading online estate agent.

Hammond focused on easing the current housing crisis in his first address, including measures to deliver a property market that works for everyone.

However, eMoov.co.uk believes that little has changed in terms of the message being delivered during the Autumn Statement and insists that Hammond was wrong to leave Stamp Duty out.

Housing market boost

Commenting on yesterday’s Autumn Statement, the Founder and CEO of eMoov, Russell Quirk, says: “The main headline where today’s Autumn Statement is concerned is yet another cash injection for the beleaguered UK property market, with Mr. Hammond pledging £2.3 billion for infrastructure to support 100,000 new homes and £1.4 billion to build 40,000 more affordable houses in the places they are most needed, plus a further boost to Right to Buy.

Hammond Should Have Addressed Stamp Duty, Insists eMoov

“Talk is cheap, even if the numbers being bandied about today are not. And it remains to be seen how the announcement and the money will actually lead to more houses being built in practice.”

He continues: “Mr. Hammond must forgive the nation for welcoming this announcement with a degree of scepticism, as, like many a chancellor before him, these words often equate to little more than regurgitated rhetoric and a shortfall of 100,000 new homes a year.

“The Government must realise that these announcements are all well and good, but it isn’t the funding that is the issue and, until they address the mechanism itself, little will come of it. Where is the land going to come from? How will the planning process be expedited? These are all questions that need answers with actions, not just words, if the current crisis is to be tackled head on.”

Tenant referencing fees ban

He discusses the letting agent fee ban, also announced during the Autumn Statement: “Today’s announcement on rental fees is nothing more than opportunistic tokenism and, surprisingly, is stolen straight from Labour’s manifesto. Interestingly, the Chancellor’s own Housing Minister, Gavin Barwell, described banning lettings fees as ‘a bad idea’ as recently as September.

“It is ironic that the Government should be turning its guns again on the private rental sector, given that the absence of Government action in building affordable homes to rent in the social housing sector has led to private landlords having to fill the gap on their behalf.”

He explains: “A ban on tenancy referencing fees is great on the face of it, but the reality is that the agent will make their money regardless, and this will be passed onto the landlord and in turn the tenant through higher rents.

“We’ve seen the same thing happen in Scotland, whereby the landlord must charge more to the tenant in rent to cover the increase charged by the agent. You would think the Government would have known this.”

Stamp Duty

But while the Chancellor may have addressed certain issues facing aspiring homeowners, he missed the chance to make vital changes to the Stamp Duty system, believes Hammond.

“More of a Stamp Duty refrain, rather than a Stamp Duty reform, by Mr. Hammond today. Stamp Duty is an archaic tax and one that the industry has been crying to be changed in a manner than benefits UK buyers.

“Rather than penalise struggling UK buyers, the Government needs to flip Stamp Duty on its head and make the seller accountable for paying it. This would help those buyers already paying the price of homeownership, whilst those that have benefitted from the appreciating price of their property are in a better position to stomach the sour taste of Stamp Duty tax.”

Does the Redfern Review Have Any Real Solutions to the Housing Crisis?

Published On: November 17, 2016 at 12:03 pm

Author: Em Morley

Categories: Property News

Tags: first time buyers,homeownership,housing crisis,Redfern Review

The Redfern Review, an independent assessment of the decline of homeownership, has now been released, after being commissioned in February by the Labour Party.

Led by Pete Redfern, the Chief Executive of housebuilder Taylor Wimpey, the report reviews the state of the property market in the UK and how this has created the current housing crisis. The full study can be accessed here: http://www.redfernreview.org

Fortunately, Redfern’s review isn’t obviously stuffed with measures that would benefit housebuilders.

Does the Redfern Review Have Any Real Solutions to the Housing Crisis?

For example, it doesn’t recommend that the Government throw yet more schemes at homebuyers, in the style of the former chancellor, George Osborne. Instead, the Redfern Review states that Help to Buy schemes are inflationary and should be restricted to first time buyers seeking lower-priced homes.

And the report doesn’t simply focus on homeownership either.

“A fair housing market also needs both a healthy private rented sector and a supportive social housing sector,” it insists.

Over the past 30 years, past governments’ focus on homeownership has deprived local authorities of the funds needed to build affordable homes to rent. Positively, the review argues that all tenure types require equal support.

Disappointingly, however, the report does not offer fresh insight into why homeownership levels dropped by 6.2% between 2002-14. The main finding is exactly as you’d expect: Fewer young people can afford to buy their own homes. Also unsurprisingly, it confirms that house prices rose rapidly before the banking crisis, credit constraints then kicked in, and incomes of those aged 28-40 have declined in relation to older people.

But Redfern does have one original suggestion: Set up an independent housing commission, modelled on the new Infrastructure Commission, to provide long-term thinking on housing. Although this does not provide an instant resolution to the housing crisis, it does highlight the fact that longer-term plans must be put in place to sustain the supply of homes.

While Labour commissioned the report, Theresa May could use its suggestions to form a new housing policy that may indeed go some way to resolving the crisis.

The Policy Manager of Generation Rent, a tenant lobby group, Dan Wilson Craw, responds to the findings of the Redfern Review: “The decline in homeownership is creating significant problems for the future, particularly once renters reach retirement age and depend on the state to put a roof over their heads. The solution is not to load first time buyers with more debt, but to restrain house price inflation so wages can catch up.

“The desperation of private renters to escape their expensive, unstable tenure makes subdued first time buyer numbers a bigger problem than it ought to be. Alongside investment in new homes, the Government should reform renting so it offers tenants stable homes and a genuine choice of tenure.”

Taylor Wimpey Confident in the Strength of the Housing Market

Published On: November 15, 2016 at 10:14 am

Author: Em Morley

Categories: Property News

Tags: housebuilding,housing crisis,housing market,new homes

Taylor Wimpey, one of the UK’s largest housebuilding firms, remains confident in the strength of the UK housing market, according to its latest trading update.

Looking at the second half of the year so far, the builder reports that the housing market has remained positive, with a high level of customer confidence. Customers are currently benefitting from a competitive mortgage environment, with a wide choice of mortgage products available across a range of loan-to-value ratios.

Current trading

Taylor Wimpey claims that underlying trading is stable across its core geographies. While the wider London market remains positive and in line with the rest of the UK, as previously expected, the central London market has slowed during the year, it says. In Zones 1 and 2, prices have softened slightly at the higher end of the market, although demand remains high in this sector.

The firm’s sales rates for the year to date have remained strong, at 0.75 sales per outlet per week (0.76 in 2015). For the second half of the year to date, sales rates stand at 0.70 (0.74 in 2015).

Cancellation rates for the year to date remain low, at 13% (11% in 2015). During the period, Taylor Wimpey operated on an average of 291 outlets (301 in 2015).

Taylor Wimpey Confident in the Strength of the Housing Market

The firm reports that it is fully sold for its targeted 2016 completions, and is building its order book for 2017 and beyond. As of 6^th November, it is around 23% forward sold for its expected 2017 private completions. The current total order book, excluding joint ventures, is ahead of last year and represents 8,981 homes (8,529 in 2015), standing at £2.3 billion (£2.1 billion in 2015).

Build costs

As previously expected, build costs are predicted to increase by around 3-4% during 2016, with the majority of cost pressures coming from labour, where skilled resource availability has improved, but not at the same rate as the increase in new home supply.

While the firm does expect to see some impact on input prices from the moving exchange rate, it does not expect this to be significant, due to the low level of direct imports. It forecasts underlying build cost increases in 2017 to be at a similar level to 2016.

Land and planning

The land market remains positive, claims the firm. While it continues to exercise an appropriate level of caution following the EU referendum and subsequent economic uncertainty, it has continued to progress attractive land deals.

In the year to 30^th October, it added around 11,500 plots to its short-term landbank. With a high quality short-term landbank, which is at the optimum scale for the business, alongside a continued strong conversion rate, Taylor Wimpey remains focused on the quality of individual sites and structure of commercial terms to add value.

Outlook for the future

While the implications of the EU referendum are still unclear, the UK housing market has remained resilient, says the firm, with long-term fundamentals underpinned by strong demand.

Looking ahead, the housebuilder remains confident that its business model and strategy positions it to perform well through all market conditions.

The Chief Executive of Taylor Wimpey, Pete Redfern, comments on the report: “Trading during the second half of 2016 and into the autumn selling season has been strong, with good levels of customer confidence and demand, underpinned by a wide range of mortgage products.

“While there remains some uncertainty following the UK’s vote to leave the European Union, we are encouraged to see that the housing market has remained robust, and trading has remained resilient. We have a strong order book position for 2016 and going into 2017, and we will maintain our focus on delivering our medium-term targets.”

He adds: “Looking ahead, we continue to implement our disciplined strategy, which ensures that we are well placed to perform well through all market conditions and deliver enhanced value through the cycle.”

Does the housebuilder’s confidence indicate that the country is on its way to creating the homes we so desperately need, despite economic uncertainty?

Shelter’s Statements About Private Rental Housing are “Plain Wrong”, Says RLA

Published On: October 18, 2016 at 8:31 am

Author: Em Morley

Categories: Property News

Tags: housing crisis,private rental sector,rental properties,tenants

Shelter’s “ongoing assault” on the state of private rental housing in the UK is “plain wrong”, insists the Residential Landlords Association (RLA).

Shelter’s Statements About Private Rental Housing are “Plain Wrong”, Says RLA

The RLA is responding to yesterday’s report from the homelessness charity that over one in four homes are in an unacceptable standard. The study focused on the instability and insecurity of living in private rental housing.

However, the RLA has highlighted statistics that show that 82% of tenants in the private rental sector are satisfied with their homes, which is higher than in the social rental sector.

These figures were taken from the annual English Housing Survey.

While Shelter refers to the instability that those living in private rental housing face, the most recent English Housing Survey shows that, on average, tenants are living in their homes for four years. Additionally, a version of the survey published last year found that landlords end just 8% of tenancies.

The Vice Chairman of the RLA, Chris Town, says: “Shelter is once again making extravagant claims about the standard of all housing in Britain, let alone private rented property.

“Though we share Shelter’s ambition for every rented home to be of a decent standard, the answer is not more regulation.

“With over 400 regulations covering the sector, what is needed is not new powers, but better enforcement of existing powers to root out the crooks, rather than tying the majority of good landlords up in excessive red tape.”

He concludes: “The most effective way of ensuring housing is affordable is to increase supply. We hope Shelter will support landlords in calling on the Government to change recent tax policies and on councils to scrap ineffective, but costly, licensing schemes, all of which discourage investment.”

Positively, the Chancellor, Philip Hammond, has pledged to put housebuilding ahead of the deficit, in a bid to solve the country’s chronic housing shortage.

However, many groups have called on the Chancellor to scrap the many tax changes that landlords currently face, as they believe that these measures will only hit those living in private rental housing.

If You Own Your Own Home, You Will Live Longer, Says HomeOwners Alliance

Published On: October 14, 2016 at 9:05 am

Author: Em Morley

Categories: Property News

Tags: first time buyers,homeowners,homeownership,housing crisis,life expectancy

If you own your own home, you are likely to live longer, according to analysis from the HomeOwners Alliance.

The latest study shows that across most of the UK, there is a direct correlation between homeownership levels and life expectancy. The HomeOwners Alliance found that where homeownership levels are higher, so is life expectancy.

However, homeownership levels have been in decline for the past decade, peaking at 69.7% of the total housing stock in 2002, down to 63.8% today.

High demand for homes is pushing house prices to unaffordable levels, making it incredibly difficult for first time buyers to get onto the property ladder.

Political parties, industry experts and the Government all agree that the underlying cause of the housing crisis is that the country has not been building enough new homes for decades.

Recently, however, the Government pledged to shift focus onto housebuilding, rather than reducing the deficit: /chancellor-hammond-put-housing-deficit-reduction/

Homeownership vs. life expectancy

If You Own Your Own Home, You Will Live Longer, Says HomeOwners Alliance

The decline in homeownership is having, and will increasingly have, profound, long-lasting and adverse economic and social consequences, warns the HomeOwners Alliance.

For example, the organisation explains that fewer homeowners mean greater poverty among pensioners, more social problems for children raised in insecure rental accommodation, poorer living standards among lower and middle-income earners, a higher benefit bill, and further inequality. In addition, as the study shows, it also has an impact on life expectancy.

The only exception to the correlation between homeownership and life expectancy is in London, where life expectancy and homeownership are not strongly linked.

The CEO of the HomeOwners Alliance, Paula Higgins, believes: “Reversing the decline in homeownership should be one of the Government’s highest priorities. We know that homeownership in this country has tangible benefits, including longer and happier lives. But the high costs mean it is out of reach for more and more people, widening the gap between the rich and poor and fuelling social inequality.”

She insists: “The UK urgently needs a functioning and stable housing market, as the current housing situation is deeply unfair.”