Posts with tag: housing crisis

Housing Crisis Causing Many to Put off Major Life Decisions

Published On: June 7, 2016 at 8:34 am

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Britain’s housing crisis is causing many people under 45-years-old to put off major life decisions, according to a new study by YouGov on behalf of homelessness charity Shelter.

Shelter reveals that 59% of people in that age group have put significant milestones, such as marriage, starting a family or moving for work, on hold. The research indicates how the housing crisis is affecting much more than just where people live.

Housing Crisis Causing Many to Put off Major Life Decisions

Housing Crisis Causing Many to Put off Major Life Decisions

Over the past few years, house prices have continued to rise, with the average property value in London surpassing £600,000 for the first time last month.

Data from recent months also shows that rent prices have been increasing constantly since 2010, putting even further pressure on prospective first time buyers saving for a deposit.

Research has found that as a result of the chronic housing shortage, the average age of a first time buyer is now 38. This is expected to rise to 41 by 2025, according to financial services firm London Victoria.

However, the lack of affordable housing is also increasingly having an impact on personal lives.

The YouGov survey found that 19% of people under 45 have experienced a delay finding a job, while 16% have postponed getting married. Some 22% of respondents have put off having children because of their housing situation, while one in ten expect to delay their retirement from work.

The Government’s Starter Homes scheme was designed to boost homeownership. However, the initiative has been criticised, as the houses are still too expensive for most people on ordinary incomes.

The Chief Executive of Shelter, Campbell Robb, believes that young people have been left in limbo due to the shortage of affordable homes.

He says: “Everyone deserves the chance to have a home where they can put down roots and build a life for themselves. But our ever-growing housing crisis means millions of young people are being left behind – unable to reach many of the crucial life milestones that were taken for granted by the generations who came before them.

“As Shelter reaches its 50th year, it’s heart-breaking to see so many young people still living in a housing limbo, facing a frustrating lifetime of instability where they feel unable to move forward with their lives.”

He insists: “We cannot make this crisis someone else’s problem, and it’s the responsibility of all of us to help fix it.”

House Prices Rise over Five Times Faster than Wages

Published On: May 19, 2016 at 9:54 am

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House Prices Rise over Five Times Faster than Wages

House Prices Rise over Five Times Faster than Wages

The average house price in the UK has risen over five times faster than average weekly earnings in the past five years, according to analysis of the latest Office for National Statistics (ONS) data by the Resolution Foundation.

The study found that house prices have increased by 36% since April 2011, while weekly earnings have risen by just 7% over the same period.

This separation between house price and wage growth has been even more marked in London and the South East, where property values have surged by 57% and 39% respectively. However, the average weekly salary has only risen by 5% in the South East, and has actually dropped in the capital – the product of reductions in bonuses at the top level of earnings and strong employment growth in lower paying positions.

Even in Scotland and the North East – where house price growth has been the lowest over the last five years – property values have roughly doubled the rate of earnings inflation.

The Resolution Foundation claims that this post-millennial surge in house prices has caused a dramatic shift in housing tenure. Homeownership has fallen from around 70% of all households in low to middle incomes to 55% over the last decade. The proportion of people renting from a private landlord has doubled over the same timeframe, to 27%.

The Senior Policy Analyst at the Resolution Foundation, Lindsay Judge, comments: “Runaway house prices have had a clear feed through to living standards in recent years. Most obviously it has priced people out of homeownership, pushing significant numbers into the private rental market.

“But rampant house prices inflation isn’t just a problem for wannabe homeowners. It has increased the stock of mortgage debt, and fuelled demand for renting that is driving up costs there too. Ultimately, we all pay for house price inflation by spending a greater share of our incomes on housing.

“The solution to this housing crisis isn’t easy – especially in London. It will require radical action to both boost the supply of housing for all tenure types, and improve conditions and security in the UK’s private rental sector.”

Repossession Rate to Stay Low in 2016, According to HML

Published On: May 13, 2016 at 11:33 am

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The repossession rate for homes in the UK will stay low over 2016 if interest rate rises are further postponed as anticipated, according to HML, the UK’s leading mortgage service firm.

Repossession Rate to Stay Low in 2016, According to HML

Repossession Rate to Stay Low in 2016, According to HML

In its annual forecast, the HML said that it expects a total of 10,326 repossessions in the UK during 2016, which would account for 0.09% of mortgages. The prediction arrives as the Council of Mortgage Lenders (CML) reports the lowest level of repossessions on record.

This figure would represent a second consecutive year of low repossession rates, although HML reports that the threat to the UK steel industry could mean more repossessions in South Wales and other regions where jobs are at risk.

The CEO of HML, Andrew Jones, says: “Repossession is an extremely difficult time for any household, and HML works with mortgage providers to identify those at risk and provide support during times of financial difficulty.

“Another year of low repossession rates is welcome, but we shouldn’t ignore the prospect of big increases when interest rates eventually rise.

“Those hit hardest by other financial pressures, such as unemployment, are at particular risk, and if the UK steel industry deteriorates, we can sadly expect repossessions to increase in communities that are affected.”

HML is the only company that publishes mortgage repossession forecasts broken down into the English regions, Wales, Scotland and Northern Ireland.

It expects Northern Ireland to have the highest repossession rate, at 0.27%, in 2016, with the South West and East Midlands having the lowest, at 0.06%.

HML’s figures vary significantly from those suggested by the CML in December last year, which forecast a sharp increase in repossessions, to 18,000.

HML believes that the difference relates to a change in expectation over the timing of interest rate rises, which the CML expected to occur in the second half of 2016, but is now not expected until 2017 at the earliest.

In September last year, HML stated that an interest rate rise would hit first time buyers particularly hard, expecting 20,000 to fall into arrears if the base rate rose by 1.5%.

Although the repossession rate looks set to remain low, concerns have been expressed about rising house prices, as the HomeOwners Alliance reports that the housing crisis is deepening.

The Housing Crisis is Deepening as Homeownership Remains Unaffordable

Published On: May 11, 2016 at 8:48 am

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The housing crisis is deepening, as homeownership remains unaffordable for the high number of aspiring first time buyers who cannot get onto the property ladder, according to new research conducted by YouGov on behalf of the HomeOwners Alliance and BLP Insurance.

The study, now in its fourth year, polls over 2,000 UK adults on their housing concerns and the latest trends affecting homeowners and those looking to buy a home.

The survey highlights the growing appetite of first time buyers to get on the housing ladder. Around three-quarters (73%) of non-homeowners now say they would like to own their own home, compared to 69% last year, 68% in 2014 and 65% in 2013.

The Housing Crisis is Deepening as Homeownership Remains Unaffordable

The Housing Crisis is Deepening as Homeownership Remains Unaffordable

Although the desire to own a home is mounting, the ability for first time buyers to purchase a property and save for a deposit remain the UK’s main concerns, with 82% and 80% respectively saying that these are serious issues.

Additionally, the proportion of aspiring homeowners who say that the availability of housing is a serious problem has soared to 78%, up from 72% last year. Hopeful homeowners are also increasingly concerned about the quality of housing, with 60% naming it a serious issue.

The study also found that the housing crisis is most severe in the capital. However, the new Mayor of London, Sadiq Khan, has set ambitious aims to tackle the shortage of affordable housing.

Positively, there was a noticeable drop in concern about the rates of Stamp Duty, after the Government’s reforms were introduced almost two years ago.

However, landlords are now facing a further 3% in Stamp Duty on buy-to-let properties. Concerns have been raised that landlords may decide to leave the sector, which would cause a decline in private rental property stock; further exacerbating the affordability crisis.

The Chief Executive of the HomeOwners Alliance, Paula Higgins, comments on the results: “Despite a blizzard of Government initiatives aimed at helping homeowners, the housing crisis is deepening across the country, with ever more non-homeowners wanting their own home, and ever greater concern about the lack of housing.

“Many Government policies have boosted demand for homes, but what this survey shows is that the real problem is the desperate shortage of houses. Until the Government tackles the fundamental issue that we just don’t have enough good quality homes, the housing crisis will continue to deepen and a generation will continue to have their dreams of homeownership crushed.”

The Chief Executive of BLP Insurance, Kim Vernau, also responds: “We are now at a critical juncture for the construction industry and housing market. The Government urgently needs to speed up the delivery of new homes for aspiring first time buyers. Tenures of all types are required across the country, and affordable housing and social housing should also be a priority.”

With a high number of prospective first time buyers struggling to purchase their own homes, demand for private rental property looks set to remain strong. Therefore, good landlords that stick to the law and rent out good quality homes are crucial – make sure you check LandlordNews.co.uk regularly for landlord updates.

Generation Rent Responds to Election of Sadiq Khan

Published On: May 9, 2016 at 8:29 am

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Generation Rent Responds to Election of Sadiq Khan

Generation Rent Responds to Election of Sadiq Khan

On Friday evening, Labour’s Sadiq Khan was elected the Mayor of London. Tenant lobby group Generation Rent has responded to the appointment, explaining what it will mean for the housing market.

With housing such a serious and widespread issue in the capital, many groups have spoken out about what the new mayor must do to help ease the chronic shortage of affordable homes.

Last week, the Director of Your Move and Reeds Rains, Adrian Gill, called on the new mayor to boost private rental supply in London. He believes that Khan must regard the private rental sector as an ally, not an enemy.

Both Khan and his main rival, Zac Goldsmith, put housing at the core of their mayoral manifestos, highlighting the importance of this continuing issue.

Khan has promised to build 80,000 new homes in London every year, 50% of which will be affordable. He plans to deliver these properties on brownfield land. Khan also hopes to form a new homes division in City Hall, set up a not-for-profit letting agency, restrict rent rises, and further invest in the London Affordable Homes programme.

The Residential Landlords Association has also recently released its own manifesto, detailing what it believes the new mayor should do for the private rental sector.

Following Khan’s appointment on Friday, Generation Rent spoke out about his responsibilities now that he is mayor.

The group’s Director, Betsy Dillner, says: “Generation Rent congratulates Sadiq Khan for winning this referendum on London’s housing crisis. The new mayor has years of underbuilding to overcome, and in the meantime, two million private renters are facing high rents and insecurity, with no way out.

“In order to improve the lives of renters, the mayor needs new powers from the Government over tenancies – something that both he and Zac Goldsmith called for. In theory, this means that all of London’s MPs, on both sides of the House, should now be clamouring for stronger rights for renters. We hope Sadiq will capitalise on this consensus.”

Which London Mayoral Candidate Will Solve the Housing Crisis?

Published On: May 4, 2016 at 8:38 am

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Tomorrow, Londoners will vote for the capital’s next mayor. But which London mayoral candidate will work best towards solving the housing crisis?

Housing remains the number one issue for many living in the capital, with a lack of supply causing spiralling house prices. Research from ComRes confirms that the housing crisis will be the main determining factor in who is elected tomorrow.

In a bid to address the capital’s chronic shortage of supply, the leading London mayoral candidates have put housing at the core of their manifestos, with front-runners Sadiq Khan and Zac Goldsmith both calling the election a “referendum on housing”.

The Residential Landlords Association has also released its own London mayoral manifesto, detailing what it thinks should be done to solve the housing crisis.

As house prices soared under the two most recent London mayors – Ken Livingstone and Boris Johnson – the next mayor will be put under great pressure to do more to make London more affordable.

Which London Mayoral Candidate Will Solve the Housing Crisis?

Which London Mayoral Candidate Will Solve the Housing Crisis?

Residential property prices are now at least ten times the average salary in 28 of London’s 33 boroughs, with prices in many of London’s most expensive areas now out of reach for all but the super-rich. Worryingly, however, it is believed that even the wealthiest of Londoners are having to turn to the private rental sector.

So which candidate will solve the capital’s housing crisis?

Sadiq Khan 

Labour’s Sadiq Khan has promised to deliver 80,000 new homes in London every year, 50% of which will be affordable. He plans to build these homes on brownfield land. Khan also wants to form a new homes division in City Hall, set up a not-for-profit letting agency, restrict rent rises, and invest more in the London Affordable Homes Programme.

Zac Goldsmith

Zac Goldsmith, the Conservative candidate, has also vowed to focus on releasing publicly owned brownfield land for the construction of more residential properties, hoping to deliver 50,000 new homes in London per year by 2020. This would be financed in part by a new pan-London investment fund for overseas investors. He also aims to bring thousands of empty homes back into use, clamp down on rogue landlords, and introduce longer-term tenancies.

Caroline Pidgeon

The Liberal Democrat candidate wants to boost new housing supply in the capital, including a substantially higher amount of council homes at affordable rent prices. She also plans to make all private landlords in the capital registered, introduce a right to buy scheme for tenants if their landlord decides to sell, abolish letting agent fees for tenants, and introduce three to five-year tenancies.

Sian Berry

The Green Party’s Sian Berry would like the Mayor of London to be given greater rent controls, as part of an effort to help private tenants in the capital. She also believes there should be a voluntary register of landlords, as well as a new Renters’ Union, financed by City Hall, designed to provide tenants with greater support and advice.

Pete Whittle 

Peter Whittle, of UKIP, has pledged to lobby for sensible migration levels to help restrict demand for housing, alongside boosting housebuilding levels. He claims that producing a comprehensive registry of all London brownfield sites is crucial to increasing the supply of land for housebuilding. Whittle plans to tax buy-to-let landlords at a higher rate if they leave their properties empty, and offer long-term residents in London priority when it comes to social housing.

Who will you be voting for?