Housing Market
News covering issues affecting the UK residential property market, house prices, interest rates and buying and selling trends.
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Housing industry welcomes Chancellor’s planning shake-up
The Government has released proposals to tackle the UK planning system with a view to speeding up house building as part of its Productivity Plan. The Chancellor George Osborne last week said that the Government is changing the country’s planning laws to make it easier for house builders to develop more residential properties. Under the new plan, planning consent would be granted automatically on suitable disused industrial land, limiting delays to development, under the reforms, while a higher number of brownfield plots could also be seized for development through new compulsory purchase powers. What’s more, major infrastructure projects that feature new homes will be fast-tracked to meet local housing demands. “Britain has been incapable of building enough homes,” said George Osborne. “The reforms we made to the planning system in the last parliament have started to improve the situation: planning permissions and housing starts are at a seven-year high.” “But we need to go further and I am not prepared to stand by when people who want to get on the housing ladder can’t do so,” he added. The Chancellor’s planning changes were described as a “major step towards solving the housing crisis” by Brian Berry, Chief Executive of the…
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First-time buyers make up nearly half of all mortgages
First-time buyers in this country now account for almost half of all homes purchased with a mortgage, a rise of 38 per cent since 2011, owed in part to a surge in first-time buyer mortgage deals, new research shows. The study from the Halifax revealed that first-time buyers make up 47 per cent of all mortgage-aided acquisitions, while the deposit that they have to pay has increased by 6 per cent over the past 12 months to an average of £29,894, reflecting a general rise in property prices over the past year. The average first-time deposit is now 82 per cent or £13,494 higher than in 2007. Overall there were an estimated 139,500 first-time buyers in the first six months of this year, down 7 per cent year-on-year, but while this is the first annual decrease on this basis since the first half of 2011, it is still the highest total for the first six months of the year since 2007. Craig McKinlay (left), Halifax Mortgages Director, said, “There was a modest decline in the number of first time buyers in the first half of the year following the substantial increases recorded in 2013 and 2014. This fall has been…
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What impact would Grexit have on UK housing market?
Many people believe Greece could now exit from the Eurozone after Greek nationals rejected the terms of an international bailout in Sunday’s referendum. By voting ‘no’, the people of Greece have not chosen to return to the drachma. This is not a vote for ‘Grexit’. But there are some European officials who have already warned that creditors could take the ‘no’ vote to mean that Greeks had rejected further talks. So far the UK housing market has remained largely unaffected by the goings on in Greece, thanks partly to the fact that the UK is not part of the Eurozone and so it has not directly contributed to bailing out Greece since the country got into trouble after the financial crisis. The UK has only really provided a fraction of the assistance indirectly through its membership and contributions to the International Monetary Fund (IMF), and as a consequence, Jones Lang LaSalle believes that it is unlikely that even if Greece did leave the eurozone the UK’s housing market would end up being adversely affected. Commenting on the implications of a ‘Grexit’ from the Euro, Andrew Burrell (left), Head of Forecasting at JLL commented, “Our view is that real estate will…
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£100m funding boost for house builders
The Government has pledged to match the £50 million promised by Lloyds Banking Group in October to help increase the supply of needed new homes across the country, the Housing Minister Brandon Lewis (left) announced this week. The Housing Growth Partnership will act as a dedicated initiative alongside small builders to invest in new developments, with the ultimate aim of increasing housing supply. The latest house building data reveal that housing starts are now at a seven-year high and climbing, while the volume of homes granted planning consent has reached 261,000 – the highest since 2007. But to help “maintain this momentum and keep the country building”, Lewis said that the Government recognised that greater investment in the sector is needed. He commented, “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.” Lloyds Banking Group said that it welcomed the Government’s announcement of support for the housing growth partnership, which will double the capability to support SME house builders. Andrew Bester, Group Director and Chief Executive, commercial banking…
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House prices stable as transactions dip
The latest house price data from the Land Registry shows that house prices in England and Wales remained stable on a monthly basis, despite figures from HM Revenue and Customs (HMRC) revealing that there was a drop in transactions. Although prices remained flat overall on a monthly basis, there were parts of England and Wales that saw rises, led by London where the average price of a home appreciated by 0.7 per cent month-on-month. On an annual basis, the Land Registry data revealed that prices rose by an average of 4.6 per cent in the year to May 2015 to £179,696. Again, London led the surge, with prices in the capital increasing by 9.1 per cent year-on-year. “Land Registry data shows that house prices are continuing to march upwards with London and the South East seeing the greatest annual growth,” said Brian Murphy (left), Head of Lending at Mortgage Advice Bureau (MAB). “The trend is not deterring homebuyers, as mortgage approvals are also at their highest since the Mortgage Market Review (MMR) was implemented according to the British Bankers’ Association (BBA). But it does mean that the average borrower is taking out a bigger loan than at any point since…
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Property demand continues to soar
With uncertainty regarding the outcome of the general election over, demand to buy and rent property rose sharply in May, according to the National Association of Estate Agents (NAEA) and the Association of Residential Letting Agents (ARLA), but property supply is not keeping pace. The NAEA report that demand from buyers hit an eight-month high last month, with 383 house hunters registered on average per branch in May, up from 344 in April, and the highest number recorded since September 2014, when 406 house hunters were registered. The supply of properties coming onto the sales market also rose in May with 46 houses up for sale per NAEA member branch, compared to 43 in April, but remains well below the level needed to help meet rising demand levels. Nevertheless, this led to a marginal rise in the number of sales per member branch, with nine sales agreed in May, compared to eight in April. Mark Hayward (left), Managing Director at NAEA, said that the increase in the volume of house-hunters searching for homes was owed to a rise in confidence following the certainty that the outcome of the General Election delivered. He commented, “The housing shortage will not be solved…
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Do builders really have too many land banks?
If you’ve ever wondered why it takes so long for new homes developments in your area to go from planning permission to completion, then a report by the Campaign for Rural England (CPRE) attempts to explain the strange world of land banks. The CPRE’s dossier on new homes building in the UK is a damming summary of the factors that prevent more new homes being built in the UK, something that frustrates many of the agents waiting to sell them. The Getting Houses Built report, published this month, lays the blame at the feet of the developers, which it collars for focussing too much on profit while “dictating supply but not meeting need”. One of the more surprising facts to emerge from the report is that the nine largest volume builders have a land bank of some 340,000 housing plots. While the CPRE admits that shareholder value will never override national house-building targets, it says the high levels of land ‘banked’ reveal the need for urgent reform. To fix this problem, the CPRE suggests that developers are granted planning permission on a ‘use it or lose it’ basis with a five-year limit, after which land would be compulsorily purchased off…
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Remove barriers to boost house building levels, says Savills
Private house builders could start building significantly more new homes in England if barriers to growth were cut, according to Savills. A new report from the property firm makes various recommendations on ways that house building levels could be increased, with a view to reducing the ever growing supply-demand imbalance in the market. The recommendations include increasing planning consents in high demand areas; boosting the supply of land; continued support for residential property developers and a rise in the building rate of local authorities and other bodies. In spite of a rise in the volume of new housing starts in recent months, Savills reported that there still remains a major shortfall, owed in part to insufficient land available for residential development. The report by Savills said there was the potential to construct 205,000 new homes per year, up 64,500 compared to the existing rate, if the supply of development land and planning consents increased in areas of high demand. At present, more than half of new homes – 54 per cent – are being built by the 11 largest house builders, while a third of new properties are being built by medium sized house builders. But Savills said that a…
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Property prices set to soar
Residential property prices are set to rise sharply over the next few years, as the supply of housing coming onto the market continues to fall, according to the RICS UK Residential Market Survey for May. The report shows that despite growing demand from buyers, the stock of homes per surveyor in May dropped to the lowest level since the data series started in January 1978, pushing home prices higher in the process, and at a quicker pace than in April. 34 per cent more surveyors saw prices increase in May as the supply of homes coming on to the market fell for the fourth month in succession with 19 per cent more surveyors reporting a decline in new instructions. According to RICS, the average stock of residential property per surveyor has fallen by around 12 per cent since the start of 2015. Consequently, 38 per cent more surveyors expect to see property prices increase over the next three months, supported in part by the fact that new buyer enquiries rose at the fastest rate in over a year. RICS Chief Economist Simon Rubinsohn (left) said, “There had been some hope that the removal of political uncertainty would encourage more properties…
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