Housing Market
News covering issues affecting the UK residential property market, house prices, interest rates and buying and selling trends.
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Lib Dems reiterate Mansion Tax ambition with Election manifesto
The Liberal Democrat party has placed housing at the heart of its election manifesto, revealing plans to introduce a £100 cut in council tax for 10 years for people who insulate their home, as well as confirming that it plans to introduce a ‘mansion tax’ – originally a Liberal Democrat policy – on residential properties worth £2 million or more. Homes worth between £2 million and £2.5 million would face an annual mansion tax of up to £2,000 a year, under Liberal Democrat plans. Nick Clegg (left) confirmed the Lib Dems had scaled back the policy and it would now raise only £1 billion – considerably less than the £1.7 billion initially proposed. Mr Clegg commented, “It is less than originally mooted but as we have worked up the idea, looked at what we think is reasonable and fair, we think this is a reasonable and fair way of doing it and shouldn’t scare the horses.” The Labour Party has also proposed its own mansion tax, which would see properties valued between £2 million and £3 million paying £250 a month or £3,000 a year. The party is yet to set out details of higher bands. The Lib Dems’ manifesto,…
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House building sector could be hit by political uncertainty
There could be a fall in house building levels from next year as a consequence of political uncertainty which could cause a lagged effect, according to the Construction Products Association (CPA). The CPA this week announced that construction output is set to increase by 5.5 per cent this year, but will slow to 4 per cent in 2016 and 3.4 per cent in 2017, due to uncertainty relating to Government policies, such as Help to Buy. The lag between construction contracts and work on the ground means that construction activity in 2015 probably will not be impacted by the election until next year, since the majority of work for the year has already been planned. “Construction output is forecast to increase 5.5% in 2015, which is more than double the rate of growth for the UK economy, due to growth in the three key sectors of construction; private housing, commercial and infrastructure,” said Dr Noble Francis, Economics Director. “Over the following two years, however, construction output is forecast to be adversely affected by the UK’s most uncertain election in more than 40 years.” Although fewer homes are being developed than the country requires annually, private house building growth is forecast…
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Housing market picking up despite political uncertainty
The residential property market is showing signs of improving as “data points to a stronger pre-election housing market than we had anticipated,” according to a leading analyst. Concerns regarding a pre-election hit to the UK housing market appear to have been overemphasised, according to the investment bank, Jefferies, which has upgraded the residential property sector ahead of next month’s General Election following indications that the housing market is improving in spite of political uncertainty. The UK broking arm of the US bank estimated that residential property prices in London and the South East could fall sharply on the back of lower transaction levels. But despite a slowdown in the market, Jeffries has now changed its view on the sector, which includes listed estate agents and house builders. The reverse in views is largely thanks to a greater supply of mortgages, the Help to Buy scheme which has helped the new-build sector “punch above its weight”, and a strong lettings market which has offset the fact that fewer homes are changing hands on the sales market, helping to support estate agents in the process. Anthony Codling, property analyst at Jefferies, told the press, “The latest data points to a stronger pre-election…
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Scrapping non-doms could harm London’s housing market
Labour’s plans to close down what they call a loophole for the super-rich, by scrapping non-dom tax status in this country, would be a terrible mistake as it could have an adverse impact on the housing market in the capital, along with many other sectors, according to a leading estate agent. Nicholas Leeming (left), Chairman of national estate agents Jackson-Stops & Staff, which has 44 offices nationwide, believes that Labour Leader, Ed Miliband, is intent on “closing down London to international business” if he abolishes the non-dom tax status. Mr Leeming argues that Labour’s policy will effectively deter many wealthy foreigners from buying property in this country, particularly in the capital. He said, “The Labour party is out to target the wealth creators in this country and will effectively close down London to international businesses and investors if it continues to punish this sector. We have created a world-class city and we want to continue to encourage people to buy homes here and invest in the capital. The move to scrap the non-dom tax status will impact on every aspect of life in the capital – jobs, the property market, shops, restaurants and businesses. London needs to remain open for…
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Conservative Manifesto launch – Right to Buy for 1.3 million families
Margaret Thatcher did a great deal of good as the UK’s first female Prime Minister, but her Right to Buy initiative wasn’t, (in many people’s view) one of her better ideas. Thousands of council tenants thought it was brilliant and many that bought their homes at super low prices have reaped extensive financial benefit. The big flaw in the Thatcher plan was that the revenues raised from Right to Buy did not always (ever?) go towards replacing the lost housing stock with new council owned properties. However, Mr Cameron clearly sees his new version of the scheme as a vote winner – those tenants in housing association homes could be onto a winner if they vote Conservative. 1.3 million families could do so, at discounts off market prices of up to £102,700 in London and £77,000 across the rest of England, but the Tories say all the properties that are sold will be replaced. “Conservatives have dreamed of building a property-owning democracy for generations,” he said. “The next Conservative Government will extend the right to buy to all housing association tenants in this country. So this generation of Conservatives can proudly say it: the dream of a property owning democracy…
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Housing industry lobbyists must be louder, says Alastair Campbell
Housing industry lobbyists have not done enough to make housing a primary issue of the General Election, according to Tony Blair’s former Director of Communications and Strategy, Alastair Campbell (right). Despite the growing housing crisis, the main political parties are far more focused on other issues like the NHS, economy, immigration, welfare and jobs, with housing lower on the political agenda, largely because housing lobbyist have so far not done enough to be heard. Speaking at the Association of Residential Letting Agents (ARLA) conference last week, Campbell advised the industry to campaign harder on housing issues in order to make it a greater political issue. “Too many people give up before they have actually been heard,” said Campbell. He pointed to homeless charity, Shelter, as an organisation that commanded prominent media coverage thanks to their knack of campaigning on a particular issue. He continued, “I think at this stage of the election campaign, housing is not in there as strong as it should be, as a strategy. You have all the politicians talking about a housing crisis, but in terms of what they are going to do about that, who is shaping that agenda for them? “Just as Shelter has…
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Labour proposes housing bond to develop 125,000 new homes
Labour plans to introduce a housing bond system to generate up to £5 billion to fund the construction of up to 125,000 new homes if elected at next month’s General Election, the party has said. Using the Help To Buy ISA, which was announced for first-time buyers by the Chancellor, George Osborne,as part of his Budget last month, the new bond scheme would enable house builders to develop significantly more new homes Income from the ISA would be placed into a “future homes investment fund” for new residential property schemes and is similar to housing bonds used in the 1920s to stimulate housebuilding. The fund, designed to help tackle the chronic housing shortage in this country, will be targeted at new sites with first-time buyers offered priority. In a speech to Labour supporters in Warrington on Saturday, Ed Miliband (left), said, “There’s nothing more British than the dream of homeownership. Starting out in a place of your own. But for so many young people today that dream is fading.” Describing Labour’s plan as the “first real plan for housebuilding in a generation”, Mr Miliband has vowed to deliver at least 200,000 homes a year by the end of the parliament,…
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Pensioner property wealth hits record high
Retired homeowners in the UK now collectively own property worth £861 billion with their total property wealth increasing by more than £33 billion in the past six months, the equivalent of around £1,200 a month each. New research from over 55s financial specialist Key Retirement Solutions says that their total property wealth is now at its highest level since the firm started monitoring the housing wealth of the over 65s five years ago, with pensioners who own their homes outright having earned an average of £7,117 each from their homes in the past six months. Since Key started monitoring the housing wealth of the over-65s, in January 2010, total pensioner property wealth has increased by £81.27 billion – the equivalent of £17,323 each. Its Pensioner Property Equity Index shows over-65 homeowners now own property wealth of £861.188 billion outright as a result of higher property prices across most parts of the UK. Retired homeowners in London saw the biggest gains, at an average of over £20,675 each in the past six months, while homeowners in the South East are more than £14,123 better off and pensioners in East Anglia are £13,105 better off. Only retired homeowners in the North East…
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First-time buyers return to the market
Almost a third of all residential property sales in February were made to first time buyers, suggesting that market conditions are improving for first-time buyers, according to a new report. The findings, by the National Association of Estate Agents (NAEA), revealed that its member agents found that 30 per cent of homes were sold to first-time buyers, the highest figure since September last year – and since records began six years ago. It is clear from the findings in the report that things are starting to ease for first-time buyers, and Mark Hayward (left), Managing Director at the NAEA, believes that this could be down to reduced property prices or more accessible funding, especially following December’s stamp duty reforms. “We will all be waiting with bated breath to see if the first time buyer figures increase following the new Help to Buy ISA, and whether we see real momentum in the market,” he said. “It still remains notoriously hard to get cut-through in the property market, especially for first time buyers, so any green shoots are encouraging.” The findings in February show that demand for property rose, with 366 house hunter’s registered per NAEA member branch, up from 353 in…
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Housing is a top issue for voters
One of the most closely contested General Elections for decades is now formally under way, with the NHS, economy, immigration, welfare and jobs all high on the political agenda. But housing is also a major concern for many voters and could prove a key electoral battleground for the various political parties, according to pollster Ipsos Mori. Ipsos Mori’s latest Issues Index reveals that 14 per cent of voters currently rank housing as among the most important issues facing the country, up from 5 per cent in 2010, as more people struggle to afford to buy their own home in light of higher property prices and a general housing shortage. The Conservative party, which has reformed the planning system and introduced various Government initiatives including its flagship Help to Buy scheme since coming to power in 2010, has vowed to boost the level of discounted starter homes available for first-time buyers under the age of 40 if re-elected in May. Writing in PROPERTYdrum magazine, Brandon Lewis (left), the Housing and Planning Minister, said, “We’ve supported the aspirations of hard-working people. Help to Buy is enabling homeowners to purchase with a fraction of the deposit they would normally require, and leading developers…
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