Posts with tag: housing crisis

Government Multi-Billion Pound Investments to be made in aid of Affordable Homes Progress

Published On: June 28, 2018 at 9:05 am

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It has been confirmed that there is to be a multi-billion pound boost to social housing across England. This confirmation comes from Secretary of State for Communities, the RT Hon James Brokenshire MP, as part of the big push to deliver new builds to communities in need of more housing.

This will result in around 23,000 new affordable homes, as a result of a £1.67 billion government investment deal. In an attempt to support struggling families, this will include the addition of at least 12,500 social rent homes to high cost areas.

This movement is part of a £9 billion investment by the government to help provide affordable homes. £1.67 billion of this was announced in March 2018 for London. This latest funding will go towards supplying such homes across the rest of the country.

Local authorities were also invited by the Communities Secretary to bid for a share of £1 billion extra borrowing in order to build these much-needed homes. This has resulted in a raise of £1 billion to the cap of borrowing available, to be split equally between London and the rest of England.

This extra financial flexibility has been requested by local authorities. It will be allocated to the areas with the highest affordability pressures, in order to ensure that homes are being built where they are needed most.

Overall, the aim of the government is to build 1.5 million new homes by 2022. This ambitious plan is thought to be achievable through planning reform and targeted investment.

James Brokenshire commented: “The government has ambitious plans to fix the broken housing market and build the homes our communities need.

“Today’s announcement is a further milestone. It will secure the delivery of an additional 23,000 much-needed affordable homes as well as paving the way for a new generation of council houses.

“The majority of these new homes will be in high cost areas helping to ease the burden of rent on hard working families and delivering stronger communities.”

The bidding for both of these programmes will now begin. The areas which have made successful bids for affordable homes funding will be notified throughout the year, and the councils that have successfully had their borrowing caps increased will be announced as a list.

Independent Review Analysis Suggests Changes to Boost House Building

Published On: June 27, 2018 at 9:42 am

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With the current issue of new house building moving at a slow rate, there has now been a call for changes that should speed up the process. These changes aim to get thousands more British Bricklayers trained in order to help meet government targets.

A study by Conservative Politician Rt. Hon. Sir Oliver Letwin, commissioned by the government, was released yesterday, showing that the system is being slowed down by developers limiting the number of new build homes that are available for purchase at any one time.

The idea behind this staggering is that it should help prevent the prices of properties in the local market from falling, and it is known as the ‘absorption rate’.

However, when it comes to the design, size and tenure of new homes, the report shows how these choices could be increased without having an impact on the local market. This could therefore speed up the rate of buying and selling for the properties concerned.

The analysis goes on to address the shortage of bricklayers within Britain, which it states will have a “significant biting constraint” on the Government’s plans to further the advancement of new homes built, bringing it from 220,000 to 300,000 a year.

A total of 15,000 additional bricklayers has been called for by the analysis, to be trained over the next five years. It suggests that to “raise production of new homes from about 220,000 to about 300,000… the government and major house builders work together … on a 5 year ‘flash’ programme of pure on the job training.”

Sir Oliver Letwin said: “I would like to thank everyone who has contributed to the Review Panel’s work to date in analysing all possible reasons behind the slow build out of housing sites.

“It is clear that the main cause for delay is the absorption rate. We found that if house builders were to offer more variety of homes and in more distinct settings then overall build out rates could be substantially accelerated.”

Secretary of State for Communities Rt. Hon. James Brokenshire MP said: “We want to help people onto the housing ladder, and so I would like to thank Sir Oliver and the expert panel for their excellent work.

“I was particularly interested to see that increasing the choice of design, size and tenure of new homes in helping to speed up build out rates and help deliver the homes we need and communities want. I look forward to receiving the final report in the autumn.”

The draft analysis for the study is available to view here.

Call for New Housing to find Balance Between Building More and Building Beautiful

Published On: June 27, 2018 at 8:06 am

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The target has been set by Chancellor Phillip Hammond to see 300,00 new homes built per year by the mid-2020s. However, a recent report by Policy Exchange discusses the importance of the design, style and quality of these new homes. The report intends to start a debate about these factors, and how the needs of those who will be living in these homes should also be met.

In the executive summary of the report Building More, Building Beautiful, it is stated: “People don’t want excitement or drama from the design of their home. They want a sense of community, comfort and togetherness.

“The phrase ‘fittingness’ has been used in previous research and perfectly sums up the desires of most people. They don’t want identikit soulless developments or alienating expansive glass towers. They want homes that fit in with those already there. They want a sense of belonging and happiness to radiate from their properties. And they want to feel proud of their home.”

The report shows results from a public polling that there is a keenness for new builds to fit in with the style of the existing built environment. This poll was answered by 5,013 respondents from London and the South East, with 74% saying that new homes should fit in with their surroundings.

The poll also revealed that there is a desire for homes to be private, spacious and with design qualities such as feature windows and exposed brick facades.

However, it should be considered whether a focus on the design might cause an increase in prices for such housing. A planner in one of the focus groups gathered for the poll commented: “The problem with pushing for design, and if that pushes the cost up, is the viability of the scheme affects whether or not you get affordable housing, which is a massive need… there comes a point, the land values are so high that you’re in a trade-off situation.

“Do we want to really push on design? Actually you’ll find that local people, and local councils generally do want to push on design, but there’s a cost to that. You might not get health and education contributions, you really struggle to get affordable housing, so actually, there’s a limited pot that developers are able to commit.”

Is it time to reconsider the design of new homes? Secretary of State for Housing, Communities and Local Government James Brokenshire believes this is so. He contributed the foreword to the report, in which he underlines our current government’s commitment to meeting the country’s “pressing housing need”.

He goes on to say that more can be done about the major concerns of design, style and quality of new homes. He recognises that it is a particular need in London.

The full report by the Policy Exchange can be viewed here.

Onward’s Buy-to-Let Report Riddled with Errors

Published On: June 26, 2018 at 8:03 am

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A new think tank has published findings that are completely wrong in its analysis of the private rental sector, with the number of buy-to-let mortgages falling, not rising.

In its first housing report, Onward claimed that at the end of 2017, buy-to-let lending was above the 2007 peak. In actual fact, according to figures from UK Finance (backed up by the government’s own statistics), buy-to-let lending for house purchases has fallen from over 183,000 loans in 2007, to just 74,900 in 2017. This is a fall of nearly 60%, making it a significant change.

The government’s own statistics show that the number of private rented homes actually fell by 46,000 in 2017. The total number of buy-to-let mortgages, including re-mortgages, also fell from 339,000 in 2007, to 227,000 in 2017, a drop by about a third.

On the back of its assertion, Onward called for further tax increases to reduce investment in homes designated for the private rental sector, arguing that landlords are taxed more advantageously than homeowners. However, according to Paul Johnson, director of the Institute for Fiscal Studies, “The tax system is not, and was not, even before the recent changes, more generous to people buying to let.”

Onward housing report riddled with errors

A new think tank has published findings that are completely wrong: in fact, the number of buy-to-let mortgages is falling, not rising.

Impact of the housing report riddled with errors

With another report today saying that it now takes just over ten years for the average first-time buyer to save for a 15% deposit, the Residential Landlords Association (RLA) argues that this is increasing demand on the private rented sector. As such, taking action to reduce the supply of rented homes available would logically seem a step in the wrong direction.

David Smith, Policy Director for the Residential Landlords Association, said:

“Today’s [Onwards] report is riddled with errors and fails to address the fundamental point that we need more homes to rent, not less.

“Rather than coming out with ideological assaults on the private rented sector, we need to reform tax so that it encourages the development of new homes to rent and longer tenancies so that the sector can adequately provide the pathway for tenants to go from renting to home ownership.”

Analysis shows Drop in UK Lettings Listings due to Landlords leaving PRS

Published On: June 18, 2018 at 8:06 am

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There has been a recent increase of landlords pulling out from the private rented sector, thought to be due recent tax and legislation changes. This has lead to a drop in rental properties available across the UK, according to an analysis by Home.co.uk.

Tax changes, such as the 3% Stamp Duty surcharge and the phasing out of mortgage interest relief, have been a concern for many. With the Tenant Fees Bill also progressing, it appears to have shook the confidence of many buy-to-let investors.

Home.co.uk’s research shows that there has been a 12% drop in rental property listings over a 12-month period. London specifically is seeing the worst change, with a 20% drop in properties available to rent over the last 12 months. The borough of Westminster is showing the most prominent drop within the capital city, as the analysis shows its listings to have fallen by 447 properties over a 12-month period, with average monthly rents also rising by 24% to £5,292.

A drop in lettings listings is thought to be a result of recent tax and legislation changes

A drop in lettings listings is thought to be a result of recent tax and legislation changes

Home.co.uk director Doug Shephard said: “The current situation is particularly dire for tenants, who are set to continue to face increasing competition for good quality properties and rising rents.

“Government red tape and higher taxation in the lettings market has triggered forced sales by landlords. Moreover, this additional supply is now negatively impacting on capital values. Vendor landlords have done their maths and they know that if they continue to let the property, even with a rent hike, they will be losing money overall. Conclusion: time to sell.

“The problem is, though, that the private rented sector constitutes 20% of the housing stock, the majority of which is owned by landlords with small portfolios. A recipe for disaster? Maybe. Negative sentiment in this sector is certainly sufficient to turn confidence in the wider property market to the downside, thereby creating misery for all, especially those wishing to rent.”

Pressure put on Rents in Prime Central London due to Housing Shortage

Published On: May 29, 2018 at 8:22 am

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According to Knight Frank, a decrease in the amount of properties coming onto the private rented market in central London has caused an increase of pressure on rental values.

The company’s assessment reveals that the fall in house prices in central London appear to have reached its lowest and rental declines have also slackened.

The supply of new lettings for properties has faced a decline over the last 12 months due to a few contributing factors, including more pricing stability in the sales market and a succession of tax changes in recent years, affecting landlords.

Parts of London such as Chelsea, continue to face high demand with 25% more new prospective tenants registering in the year to April 2018 in compared to the last 12-month period. Moreover, the viewings for properties in Chelsea have seen a 5% increase, while Knight Frank granted 13% more tenancies over the corresponding period in Chelsea and the surrounding area. In addition, research collected by the Financial Times reveals that the housing shortage is a by-product of London’s economic success and ever-increasing population.

Sadiq Khan, mayor of London, has previously commented on the housing shortage issue, explaining the urgency for more emphasis on what proportion of housing stock is “genuinely affordable” for those currently on average incomes.

Arya Salari, Head of Lettings at Knight Frank’s Chelsea office reports: “Strong demand for Chelsea houses among tenants is the result of lingering caution in the sales market around higher rates of stamp duty.

“However, at some point this dynamic will reverse and it is increasingly common for tenants above £3,000 per week to insert a clause in the tenancy agreement that gives them first right of refusal to buy at the end of the contract.”

He explains that due to the high stock levels and the fact that it remains more of a tenant’s market, this trend is reversing, consequently placing pressure on rental values.