Posts with tag: housing market

Industry frustrated over lack of housing initiatives in the Budget

Published On: March 8, 2017 at 3:11 pm

Tags: Budget,Buy-to-Let,chancellor,housing market,landords,Phillip Hammond

This afternoon saw Chancellor Phillip Hammond deliver his first (and last) Spring Budget. Whilst there were plenty of measures that were pledged to improve social care, education and transport, there was conspicuously little in the way of anything housing related.

Blow

The lack of reforms or initiatives announced for the housing and private rental sectors have led to anger and frustration amongst many property peers. Many wanted to see changes to upcoming mortgage interest tax relief proposals or cuts to Stamp Duty.

Founder and CEO of eMoov Russell Quirk, is one of the frustrated industry members.

Responding to the lack of housing reforms mentioned, Quirk noted:

‘Zip. Nada. Zilch… Nothing….

A bitterly disappointing, lacklustre Budget by Mr Hammond in terms of addressing the current UK housing crisis. It is clear he is continuing the head in the sand approach of those before him in bypassing the issue, with a few headline-grabbing business initiatives and the usual proclamations about how great the economy is currently performing.

Ironic that a former property developer should give the subject such inadequate focus within his plans and woeful for those aspirational buyers on the ground still dreaming of getting on the ladder.

The issue of housing has become the final coat of gloss on recent budget announcements, mentioned in passing to tick the boxes of a “well rounded” economic plan, but equating to little more than aesthetic fluff.

A lot of focus on the NHS and how they are the party of the NHS. Does NHS stand for No Housing Speech?

It is a real shame Mr Hammond hasn’t put his mind to solving the backlash around the revaluation of business rates. There is an underlying feeling of angst throughout the population surrounding this uncertainty and he would have done well to use his first Budget as a platform to quell these feelings, but has in effect, chosen to sidestep the issue.’[1]

Industry frustrated over lack of housing initiatives in the Budget

Disappointment

James Davis, chief executive of online lettings agency Upad, said: ‘It was disappointing to not see a U-turn on the catastrophic decision the Chancellor made in the Autumn to ban lettings agent fees. As predicted, rising rents are already on the cards for long suffering tenants with renting now a necessity, as home ownership is out of reach for most millennials.’[2]

‘Tenants are in some cases already paying up to two thirds of their salary on rent, whilst salaries have stayed stagnant. This will have wider consequences if people can’t afford to go on holiday, or spend money on entertainment. The Government need to realise that they are playing with people’s lives and livelihoods. Buy to let landlords should be enticed through tax incentives, rather than hiking stamp duty, to bring the rental market back into equilibrium,’ he added.[2]

Short-sighted

Glynis Frew, chief executive of Hunters Property, said it is short-sighted of the Chancellor not to include any housing initiatives, after the Stamp Duty rises.

‘The more average rents rise, the more ownership figures fall. This is a bad decision which will affect not only landlords but renters, first-time buyers and second steppers,’ she observed.[2]

[1] eMoov press release, Spring Budget 2017: Property Industry Reaction, 08.03.17

[2] http://www.propertywire.com/news/uk/buy-let-sector-disappointed-uk-chancellors-failure-address-concerns/

Housebuilder Records Strong Customer Confidence as House Sales Rise

Published On: February 28, 2017 at 10:09 am

Author: Em Morley

Categories: Property News

Tags: housebuilder,housebuilding,housing market,new build homes,new homes

Housebuilder Taylor Wimpey has recorded strong customer confidence over the past year, as house sales rise.

In its latest statement, the firm insists that it has made a very good start to the year, and is encouraged by robust trading and levels of demand. UK housing market fundamentals remain strong, says the builder, with solid customer confidence.

Housebuilder Records Strong Customer Confidence as House Sales Rise

The property market is underpinned by a competitive mortgage market and low interest rates, reports Taylor Wimpey. It has seen customer interest remain high over the past year, with solid website visits and customers continuing to register interest in forthcoming developments and progress their home purchase plans.

Nevertheless, it has witnessed a softening in the prime central London market, despite the wider London market remaining stable, although house prices are steady and there are good levels of underlying demand.

With high customer confidence, Taylor Wimpey’s net private sales rate for the year to date has increased to a very strong 0.91 (up from 0.77 last year).

The firm is continuing to focus on building a strong order book. As of February, it was around 49% forward sold for private completions in 2017, with a total order book value of £1,978m. This represents 8,573 homes.

The housebuilder has commented on the Government’s release of its Housing White Paper earlier this month, which it claims recognises the importance of housing to the UK and the part all housebuilders can play in the economy.

Although it is awaiting further details of the measures included in the document, the firm welcomes the plans, which it believes are balanced and aim to sustainably increase the delivery of much needed homes.

Considering last year’s EU referendum, Taylor Wimpey insists that the early signs of stability and resilience of the market following the vote have continued and have reduced any short-term risks.

In line with its strategy, the firm will continue to closely monitor market risks, particularly around long-term mortgage costs. Nonetheless, it believes that a cautiously regulated market and low interest rate environment is likely to prolong the period of stability that we are seeing in the UK property market.

The housebuilder reports that it has a clear strategy and a strong focus on where it can add further value to the business. As such, it is confident that it can adapt to all market conditions from a position of strength and perform well.

The Chief Executive of the housebuilder, Pete Redfern, says: “In 2016, we delivered an excellent performance set against an uncertain political and economic environment that stabilised in the final quarter. The outlook for 2017 is for ongoing stability and incremental price growth, which is a healthy backdrop for our business and our customers.”

Where are the most and least affordable locations in the UK?

Published On: February 27, 2017 at 9:52 am

Author: Em Morley

Categories: Property News

Tags: average earnings,Buy-to-Let,housing market,landlords,UK house prices

A new report from Lloyds Bank has indicated that the ratio between average city house prices and typical earnings is at its poorest level since 2008.

The data shows that during the past five years, the average UK city house price has increased by 32%, from £169,966 in 2012 to the greatest ever value of £224,926 this year.

In comparison, average yearly city earnings have increased by just 7% to £32,796 over the same period. As a result, average affordability in the cities of the UK has worsened.

Ratios

House prices have risen as a multiple of average annual earnings from 5.5 in 2012, to 6.9 in 2017. This is the worse level since 2008, where the ratio of house prices to earnings stood at 7.2.

The UK’s least affordable city was Oxford, where the average house price is £358,372, nearly 11 times the level of annual average earnings in the city.

In all, there are five cities with typical house prices over ten times the average annual earnings. Alongside Oxford, these are Greater London (10.5), Winchester, (10.5), Cambridge )10.3) and Chichester (10.0). However, the average figure for London disguises variations in the capital, with boroughs much less affordable in the centre as opposed to the Greater London average.

What’s more, there is a prominent North/South divide. Only Lichfield (8.3), York (7.6) and Leicester (7.6) were cities outside of the South to make the top 20 least affordable locations.

Where are the most and least affordable locations in the UK?

Most Affordable

On the other hand, Stirling in Scotland was found to be the most affordable studio. Here, the average property price is 3.7 times average gross annual earnings. Londonderry in Northern Ireland came in second.

Two other Northern Irish cities, Belfast (4.6) and Lisburn (4.8) are placed in fourth and sixth respectively.

Andy Mason, Lloyds Bank Mortgage Products Director, said: ‘City living is becoming increasingly expensive with average house price at least ten times average annual earnings in five of the UK’s cities. Affordability levels have worsened for four consecutive years as average city house prices continue to rise more steeply than average wage growth.’[1]

‘House prices in the south have generally seen stronger growth than in the north. St Albans has recorded the biggest gains over the past decade, whilst London has been the top performer during the recovery,’ he added.[1]

[1] http://www.propertyreporter.co.uk/property/uks-least-affordable-city-revealed-in-new-report.html

House price growth in the UK slows again

Published On: February 24, 2017 at 12:22 pm

Author: Em Morley

Categories: Property News

Tags: Buy-to-Let,house prices,housing market,landlords

Residential house price growth in the UK continues to slow across many regions, lead by the capital, according to the latest Hometrack UK Cities House Price Index.

The report shows that annual home price inflation has slipped to 6.4%-the lowest level for 42 months. This is perhaps unsurprising given the fact that property values in the capital have risen by 85% since 2009.

Slowdown

Slower market conditions in London have led to a slowdown in the headline rate of growth for the Index. This is now running at 6.9%, down from 7.2% last month and from 7.9% one year ago.

This 20 city average now stands at £245,900, a fall from £244,300 recorded last month. Bristol remains the fastest growing city in the Index, with annual growth here staying at 9.5%.

Away from the South, Manchester saw the largest increase in prices, up 8.3% year-on-year. Birmingham and Liverpool have also seen significant increases, with affordability remaining attractive.

Richard Donnell, Insight Director at Hometrack, noted: ‘Growth in London has been superseded by large regional cities such as Manchester, Liverpool and Birmingham. When you consider that house prices in London are 85% higher than they were in 2009 it is not surprising that the pace of increases is slowing toward a standstill as very high house price increases mean affordability is stretched.’[1]

House price growth in the UK slows again

Contrast

Continuing, Donnell said: ‘The contrast with large regional cities outside of London and the South East couldn’t be starker. They continue to register robust levels of house price inflation in excess of 7%. The question is how much further house prices in regional cities could have to run were house prices to fully price in low mortgage rates supported by rising incomes and employment.’[1]

‘In our view there is material upside for house prices in the coming years in many cities where the recovery since 2009 has been limited. Typically those where there is investment in employment, infrastructure and regeneration will help stimulate the local economy. The timing and scale of future house price growth will, of course, depend upon the outlook for jobs, incomes and mortgage rates,’ he concluded.[1]

[1] https://www.propertyinvestortoday.co.uk/breaking-news/2017/2/uk-house-price-growth-continues-to-slow

Agents get chance to air their views on white paper

Published On: February 20, 2017 at 2:38 pm

Author: Em Morley

Categories: Property News

Tags: housing market,property,rental market,White Paper

The Housing Minister Gavin Barwell has organised a number of regional meetings for property professionals in order to hear their views on the controversial Housing White Paper.

This document was released one fortnight ago after a series of delays and was largely given a lukewarm response.

Events

Barwell’s office at the Department of Communities and Local Government is organising these events in order to get the sector’s view on the paper in person. The first event is taking place today.

Barwell observed: ‘The challenge of increasing supply cannot be met by Government alone. That is why I want to hear from a wide range of stakeholders-councillors, local authority planning and housing officers, large and small developers, housing associations, estate agents, letting agents and others-about what they think about the White Paper and how we can work together to fix our broken housing market.’[1]

The time and location of these sessions are indicated below:

London, hosted by GLA, 20.02.17, Monday February 20, 6 30pm-8pm.

Manchester, hosted by the National Housing Federation, Tuesday February 21, 2pm-3.30pm

Agents get chance to air their views on white paper

Cambridge, hosted by Cambridge City Council, on Wednesday February 22, 3pm to 4.30pm;

Gateshead, hosted by Northern Housing Consortium, on Thursday February 23, 10.15am to 10.45am;

York, hosted by York City Council, on Friday February 24, 9.30am to 11am;

Taunton, hosted by Taunton Council, on Thursday March 2, 3pm to 4.30pm;

Surrey, hosted by South East England Councils, on Monday March 6, 10.45am to 12.15pm

Full details can be found on the Chartered Institute of Housing Website

[1] https://www.lettingagenttoday.co.uk/breaking-news/2017/2/housing-minister-wants-agents-to-tell-him-what-they-think-of-white-paper

How Plans to Fix the Broken Housing Market will Affect the Property Sector

Published On: February 17, 2017 at 11:10 am

Author: Em Morley

Categories: Property News

Tags: housing crisis,housing market,Housing White Paper,property industry

How will the Government’s plans to fix the broken housing market, as announced in the Housing White Paper, affect those in the property sector, including landlords, first time buyers, homeowners and tenants?

Portico London estate agent has summarised the five key points to be aware of in the Government’s plans to fix the broken housing market:

Get Britain building more homes

The White Paper starts with a passionate pledge from the Prime Minister, Theresa May, to get Britain building more homes:

“We need to build many more houses, of the type people want to live in, in the places they want to live… This will slow the rise in housing costs so that more ordinary working families can afford to buy a home, and it will also bring the cost of renting down.”

So what exactly are the Government’s plans to encourage housebuilding and deliver one million new homes by 2020, as they promised pre-election?

“We will encourage housing associations and local authorities to build more.”
“Ensure that homes are built quickly once planning permissions are granted.”
“We will diversify the housing market, opening it up to smaller builders and those who embrace innovative and efficient methods.”
“Finally, because building the homes we need will take time, we will also take more steps to continue helping people now, including by improving safeguards in the private rented sector, and doing more to prevent homelessness and to help households currently priced out of the market.”

Longer tenancies and mandatory electrical checks

Perhaps the most radical and important announcement for landlords was the Government’s plans to encourage “family-friendly” tenancies, by ensuring they are longer-term.

How Plans to Fix the Broken Housing Market will Affect the Property Sector

Currently, more than four million households rent their homes from a private landlord, which, according to the White Paper, is nearly twice as many as ten years ago. Demand for rental homes is clearly sky-high, which is why it’s “nigh on impossible” for tenants to save enough for a deposit for their own homes.

The Government hopes that longer tenancies will make renting safer and more secure.

The Managing Director of Portico, Robert Nichols, says: “Longer tenancies have long been talked about and whether they are actually wanted by either landlords or tenants. In previous white papers, there was still the provision for adding in break clauses, which meant that either party would be able to end the term before the three-year period. The majority of tenants and landlords enjoy the flexibility that comes with renting, and fixing long-term contracts can somewhat hinder this freedom.

“More importantly, current tenancies across London average around 22 months, with very few ended by landlords. I therefore see fixing longer tenancies having little impact on how people view renting in London, and I don’t believe it will affect the current average term.”

It is also worth noting that, at this stage, longer tenancies will only apply to rental homes provided by housing associations and institutional investors. However, the Government has stated that it will be working closely with the British Property Federation to “ensure these longer tenancies become widely available”.

In addition, the White Paper announced the Government’s plans for mandatory electrical checks for rental properties.

The Property Management Director of Portico, Michael Kennedy, explains: “The law as it stands provides an obligation for landlords to ensure that their electrical installations and equipment are safe, but, other than in Houses in Multiple Occupation (HMOs), there is no requirement to produce a yearly or five-yearly certificate in the same way that the rules are clear on gas safety checks. The vast majority of landlords care about ensuring their properties are safe and well maintained, but, at present, there is too much confusion on what exactly their obligations are.

“Our advice is to have an annual test of the portable appliances and a five-yearly full electrical check, but, unfortunately, many landlords don’t do this and risk issues with their electrics during the tenancy.”

According to the White Paper, the next steps on these initiatives will be sent out “shortly”.

Affordable rent

There was more good news for tenants, as the Affordable Homes Programme will now be opened up to include Affordable Rent.

The Government announced that planning and other laws would be changed to help developers provide “affordable rent homes”, which are defined at 20% below the market rate.

Its aim is to encourage more investment in building homes for affordable rent, with councils being pushed to get more involved.

Lifetime ISA and Starter Home initiatives

The Government may have ditched its “ownership at all costs” mantra, but the White Paper still announced new measures to help tenants get onto the property ladder.

In April 2017, the Government will introduce the Lifetime ISA, which Nichols says “will come as welcome relief to the increased tax burden on the nation!” This ISA will help renters save for a deposit, entitling them to a 25% bonus on up to £4,000 of savings per year. Their savings and the bonus can be put towards a deposit for a home, or withdrawn when they reach 60.

In addition, the White Paper also stated that the Government would launch the Starter Homes initiative. This scheme will help first time buyers under the age of 40 to buy a home with a 20% discount on market rates. Buyers are only eligible for the scheme if they have an income of more than £90,000 in London, or £80,000 elsewhere in the UK.

The greenbelt battle

The long-standing discussion over whether to build or not on the greenbelt has been settled following the White Paper, with the Government confirming that greenbelt protection will not be weakened, apart from in “exceptional circumstances”.

Gavin Barwell, the Housing Minister, insisted: “The greenbelt is 13% of the land. We can solve this crisis without having to take huge tracts out of the greenbelt.”

What do you think of the Government’s plans to fix the broken housing market?