Posts with tag: housing crisis

Government Funds £100m Initiative for Small House Builders

Published On: July 13, 2015 at 9:54 am

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The Housing Minister, Brandon Lewis, has announced that small house builders will benefit from a £100m cash initiative to support them in solving the country’s housing crisis.

The Housing Growth Partnership will help smaller builders invest in new developments, provide finance to grow their businesses, help get workers onto sites and increase housing supply.

The Partnership will also aim to develop a network of builders, selecting experienced firms to act as mentors and advisers to smaller companies that wish to expand.

In the past 25 years, the amount of firms building between 1-100 units per year has declined from over 12,000 to less than 3,000.

The Government has highlighted house building as the core of its long-term economic plan, hoping to build the homes that communities want and need, and create jobs in the construction industry.

Government Funds £100m Initiative for Small House Builders

Government Funds £100m Initiative for Small House Builders

Recent house building data reveals that starts have more than doubled since the same period in 2009. Starts and completions have increased in the last year and the amount of homes granted planning permission is at its highest rate for eight years.

The Housing Growth Partnership, launched last Monday, will support small builders in driving even more success.

The Government has matched a £50m investment from Lloyds Banking Group to form the Partnership.

The Partnership hopes to make around 50 investments and provide a further 2,000 homes.

Brandon Lewis says: “The 2008 economic crash devastated our army of small builders, with delivery falling from 44,000 homes to just 18,000. Seven years on, companies are getting back on their feet but we’re determined to give them all the help they need.

“Access to finance is one of the biggest challenges they face, so that’s why today [Monday 6th July] I’m launching this £100m commitment, which will help our smaller builders fund new projects, expand their businesses, create more jobs and build more homes.

“With housing starts at a seven-year high and climbing, and homes granted planning permission at 261,000 – the highest since 2007 – this work will ensure we maintain this momentum and keep the country building.”1 

Group Director and Chief Executive of Commercial Banking at Lloyds Banking Group, Andrew Bester, comments: “The challenge of housing supply and affordability is one of the biggest issues facing Britain today, so we at Lloyds Banking Group welcome the Government’s announcement of support for the Housing Growth Partnership, which will double the capability to support SME [Small and medium-sized enterprises] house builders. It will provide SME house builders with much needed equity to support residential development projects, to stimulate growth in their businesses and facilitate access to conventional property development finance.

“We believe building both a greater quantity and mix of homes will help Britain prosper and this Partnership will help address the issue of housing supply in the UK.”1 

Brian Berry, Chief Executive of the Federation of Master Builders, adds: “There has been a sharp decline in the numbers and output of SME house builders over the past eight years. One of the biggest obstacles these firms have faced is a severe difficulty in accessing finance. Without adequate access to finance, they cannot bring forward the number of new homes they would otherwise.

“The new Housing Growth Partnership will directly help to address this issue and the additional £50m greatly increases the scale of what can be achieved. We commend Lloyds Banking Group and the Government on their trailblazing approach, and we hope this marks a real turning point in the fight to provide adequate finance to the SME house building sector.”1

The Housing Growth Partnership will investment alongside: small and medium-sized house builders who have evidence of a strong history in delivering residential development schemes and house builders who create an average of 10-100 single unit completions annually over the last three years, and have a proven track record of land buying, design, construction, marketing and sales of new homes.

The Partnership will support residential development projects with a gross development value of between £750,000-£12m and will provide investments in the range of £500,000-£5m for each project.

1 https://www.gov.uk/government/news/100-million-boost-for-small-housebuilders?utm_content=buffercf79f&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer

 

 

‘Flat-pack’ homes the answer to housing crisis?

Published On: July 9, 2015 at 11:14 am

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Engineering experts have suggested that ‘flat-pack’ homes could be the answer to the UK’s housing crisis. Prefabricated properties have advanced substantially during recent years and experts believe that they are greener and more cost-effective than houses built by conventional methods.

Solution

Using ‘flat pack’ homes will help properties become more affordable for first-time buyers, according to the Institution of Mechanical Engineers (IME). These types of property, also known as, ‘modular homes’ are manufactured primarily in factories, than transported on to building sites in order to be assembled.

A report from the organisation indicates that modular homes will assist in helping to provide the 250,000 new homes required per annum for the next twenty years. At present, the current rate is just 120,000.

Dr Tim Fox, author of the study, has called on the Government to provide support for off-site construction innovations with incentives. Fox argues that more streamlined and modern construction in factories means that modular homes will use less resources to build and will ultimately be more energy efficient.

'Flat-pack' homes the answer to housing crisis?

‘Flat-pack’ homes the answer to housing crisis?

Leadership

‘The UK is in the middle of an acute housing crisis,’ said Dr Fox. ‘The Government needs to demonstrate real ambition, leadership and innovation, not make small piecemeal changes, if it is going to solve the UK’s housing crisis. Overhauling the way the UK constructs homes could be the quickest and most effective way of doing this.’[1]

Mr Fox went on to say that modular construction has improved drastically since post-war prefabricated homes and controversial system built homes of the 60’s and 70’s.

IME’’s study has gained support from the Home Builders Federation, who also believe that the way Britain builds homes should be changed.

‘It is not just about making prefabs anymore,’ commented a HBF spokesman. ‘It’s manufacturing process that is very high quality and brings great advantages. Anything we can do to solve the housing crisis is needed and this is just one way of speeding up the construction process,’ they added.[1]

[1] http://www.telegraph.co.uk/finance/property/11716733/Flat-pack-homes-could-help-solve-UKs-housing-crisis.html

 

 

 

Mortgage Expert is Against BoE Warnings about BTL

Published On: July 8, 2015 at 5:56 pm

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Mortgage Expert is Against BoE Warnings about BTL

Mortgage Expert is Against BoE Warnings about BTL

The director of the Intermediary Mortgage Lenders Association (IMLA) is against the Bank of England’s (BoE) warnings about the risk of the booming buy-to-let market.

In its Financial Stability Report, the BoE cautioned that buy-to-let could pose a threat to the UK economy, as many more pensioners are expected to use the new pension rules to enter the private rental sector.

However, the IMLA’s John Heron says that buy-to-let lending was at a record high of £45.7 billion in 2007, but even after the recent recovery in the housing and financial markets, it is only forecast to reach £30 billion this year.

Heron states: “The BoE’s comments on buy-to-let are based on their observation of strong growth in lending in recent years. It should be understood, however, that while there has been substantial growth, this has been from a low base post-crisis, and lending today is still no greater than it was ten years ago and is well below the levels achieved before the crisis in 2007.

“The rising cost of homeownership is among many factors driving demand for rental properties, including the fall in social housing, changing work patterns, growing numbers of students, high levels of immigration, later marriage and rising separation rates.”

He concludes: “Housing needs are changing and, in fact, the IMLA analysis shows fewer than one in three extra properties to enter the private rental sector since 2007 have been backed by a buy-to-let mortgage. Lending has therefore been responding to, rather than leading, demand.”1 

1 https://www.lettingagenttoday.co.uk/breaking-news/2015/7/mortgage-chief-tells-bank-of-england-to-back-off-buy-to-let

NLA Warns of Higher PRS Costs

Published On: July 8, 2015 at 12:50 pm

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The National Landlords Association (NLA) has warned that costs in the private rental sector (PRS) could increase by £2.6 billion if buy-to-let mortgage interest payments are made non tax-deductible.

NLA Warns of Higher PRS Costs

NLA Warns of Higher PRS Costs

In a letter to the Chancellor ahead of today’s Budget, NLA CEO Richard Lambert said that non tax-deductible mortgage interest payments would not be good for the UK economy and would put added pressure on the cost of housing.

The letter also detailed the influences of landlords on the UK economy through their support of the housing industry and direct contributions in the form of tax.

Lambert wrote: “It has been suggested that private landlords receive too many ‘perks’ or reliefs which give them an unfair advantage compared to owner-occupiers, but this ignores the fact that letting residential property for profit is a business.

“No business pays tax on their gross turnover alone so why should landlords be treated any differently? Removing their ability to deduct legitimate costs before declaring their taxable profit would essentially force them to suck up one of the most significant expenses they face in being able to provide homes for others.”

Using data from the Council of Mortgage Lenders (CML), the NLA predicts that costs in the PRS could grow by up to £2.6 billion if mortgage interest payments were reclassified as non tax-deductible. It believes that this would leave landlords with no other option than to increase rents.

Lambert concluded by pursuing “an unequivocal reassurance that the Government will continue to regard buy-to-let mortgage interest payments as a legitimate business cost and give landlords the confidence and certainty to invest for the future.”1

1 http://www.propertyreporter.co.uk/landlords/warning-issued-over-mortgage-interest-payments.html

Government Housing Plan Due

Published On: July 8, 2015 at 10:49 am

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The Government has pledged to deliver an action plan this week, explaining how it will implement some of the vague policies it has already vowed, in a bid to solve the country’s housing crisis.

Government Housing Plan Due

Government Housing Plan Due

In an announcement at the weekend, the Department for Communities and Local Government said the plan was due “early” this week. However, the Chancellor’s Budget is scheduled for lunchtime today (Wednesday 8th July).

The Department for Communities and Local Government has outlined the Government’s main plans:

  • Help to Buy – to be extended to 2020.
  • Starter homes – 200,000 to be built in the next five years for first time buyers under 40-years-old at a 20% discount on open market values. 58,000 people have already signed up to this.
  • Right to Buy – to be expanded to include housing association tenants, at a discount of up to 70%.
  • Self-build – doubling the amount of custom built and self-built homes by 2020, by giving councils a new duty to help find land for those wanting to build their own home.
  • Public sector land – identify enough public sector land for 150,000 new homes over the next five years.
  • Brownfield sites – the Government hopes to unlock sites for 400,000 new homes on brownfield land. There is an existing commitment to ensure planning permission is in place on 90% of brownfield sites by 2020.
  • Further planning reform – a Department for Communities and Local Government statement says: “We will also take action on councils that have failed to produce a plan for the homes their community needs – ensuring plans are written for those areas.”1

1 https://www.estateagenttoday.co.uk/breaking-news/2015/7/government-housing-action-plan-coming-this-week

 

 

 

Sales Rise for Bovis Homes

Published On: July 8, 2015 at 8:51 am

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House builder Bovis Homes experienced growth in the first half of this year after a record number of property sales and rising house prices.

Sales Rise for Bovis Homes

Sales Rise for Bovis Homes

The company recorded 1,525 completions in the six months to 30th June, up on the 1,487 witnessed the previous year. Total forward sales were 3,505 at the half-year point.

The average property price also increased by 6% to £222,000, found Bovis Homes. The average price of private transactions – excluding social housing – rose by 10% to £264,000.

Chief Executive of Bovis Homes, David Ritchie, says: “The group has delivered a record number of first-half legal completions, made possible by the high quality land investments made during the last few years.

“We continue to trade well in a positive UK housing market, delivering a strong forward sales and build position on an increased number of sales outlets. As a result, we are on track to deliver our expected growth for 2015 and a further increase in return on capital employed supported by robust profit margins and improved capital turn.

“Future growth in shareholder returns is being underpinned by further disciplined investment in new consented and strategic land.” 

He adds that housing production is 13% ahead of the year before and Bovis has a “strong pipeline of land”1, on track to make 40 new site purchases in 2015, mostly in the South of England, outside London.

In the first half of the year, Bovis won consent on 2,687 plots on 15 sites and is hoping to add a further 257 plots this month. It is also in the final stages of securing planning permission on four sites in Bishop’s Stortford, North Wokingham, Witney and Tavistock.

The company said it would increase its interim dividend for 2015 to 13.7p, up 14% on last year.

1 http://www.telegraph.co.uk/finance/newsbysector/constructionandproperty/11720068/Bovis-Homes-hails-bright-housing-market-as-sales-climb.html