Housing Market
News covering issues affecting the UK residential property market, house prices, interest rates and buying and selling trends.
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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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Rents rise further
Rents in the residential property market continued to increase in February as tenants across the UK paid an average of £81 more per month than a year ago, the latest figures released by HomeLet show. The average UK rent in February reached £899 a month, up £10 compared to January, and £81 higher, or 9.9 per cent, than the corresponding month in 2014. But while rental prices rose across many parts of the UK, led by gains the North East and the South West, the research shows that they actually dropped by 2.5 per cent month-on-month in London where the housing market is cooling, adding to the narrowing gap between rents in the capital and the rest of the UK. “2014 saw the London rental market outstrip the rest of the UK in terms of rent price growth but what we are seeing so far in 2015 is the private rental market becoming much more broad-based with the strongest rent price growth occurring outside of the capital,” said Martin Totty, Chief Executive of Barbon Insurance Group, of which HomeLet is a part. Despite the market slowdown, tenants in London still paid the most expensive rent at £1,390, up 5.1 per…
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Significant increase in new housing consents
There has been a sharp rise in the number of housing permissions by local authorities in the last year, according to new data published by the Home Builders’ Federation (HBF) and Glenigan. The latest HBF/Glenigan Housing Pipeline report reveals that permissions in principle for over 195,000 new homes in England were granted in 2014, up 12 per cent on the previous year and 39 per cent on 2012. The volume of permissions for private homes was up 23 per cent. Over the past 18 months, house building activity has increased significantly, with figures released last month showing the number of new homes started in 2014 was up 36 per cent on 2012. As demand for new homes continues to increase, due to improved consumer confidence and the Help to Buy equity loan scheme, existing housing sites are getting built out quicker, and so builders are looking to get on to more new sites more quickly than before, the report said. “Over the past 18 months, demand for new homes, largely driven by the Help to Buy equity loan scheme has increased markedly,” said Stewart Baseley (left), Executive Chairman of the HBF. “Housebuilders have responded by significantly increasing house building activity.”…
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General Election
With the clock ticking towards the 7th May, this is a good time to reflect on what we’ve achieved in this parliament. In 2010 we inherited a broken housing market: builders couldn’t build, lenders wouldn’t lend and buyers couldn’t buy. Housebuilding starts were at their lowest for any peacetime year since the 1920s and a generation of hardworking young people – who could have rightly expected to take their first step on the property ladder – were locked out of homeownership. Great progress has been made but the challenge remains considerable.” Fast forward to today and the landscape is very different. The numbers of first-time buyers has hit a seven-year high; planning permission has been granted on 240,000 new homes in the year to October, and housebuilding starts are at their highest since 2007. LONG-TERM STRATEGY And this turnaround didn’t happen by accident – it required a longterm economic plan to restore confidence to the market and get the country building again. Above all that meant security. Firm action to tackle the deficit – keeping interest rates at their record low, ensuring mortgages remained affordable and encouraging business investment. We’ve supported the aspirations of hard-working people. Help to Buy is…
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Student property outperforming all investments, says research
A survey by Knight Frank and AccommodationforStudents.com highlighted growing demand from university students for high-quality, purpose-built accommodation, representing a terrific opportunity for investors in the student property market – and a compelling commercial opportunity for brokers of property, too. Even the reforms to tuition fees in 2012 failed to halt the rental growth for student properties and demand is now at record-high levels, delivering strong yields for investors. Students across the country are prepared to pay a premium for high-quality, purpose-built residences, according to the research. However, despite these rental growths and strong market performance, many students are still paying for accommodation that is rated as low-quality. The vast majority of students in the UK live in old-fashioned, often run-down Houses in Multiple Occupation, but that is changing with a new approach from developers who are identifying and meeting the real needs and requirements of the modern student – and therein lies an opportunity for property brokers. How can a broker get involved? Case study: specialist developer in the market, Select Property Group, is creator of market leading student accommodation provider Vita Student, contractually assure investors minimum seven per cent return every year for the first five years. It is…
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Conservatives urged to focus on small builders
Conservative Party plans to deliver 200,000 new homes for first-time buyers has been warmly welcomed by the house building industry, but the Prime Minister David Cameron (right) is being urged to use a wide range of residential property developers, including small builders, to help deliver these properties if re-elected to Government in May. The Federation of Master Builders (FMB) has voiced its support for the ambition of the Starter Homes policy to improve options and affordability for first time buyers. The trade body firmly believes that this is a model which can be made to work, but only if it is delivered by a wide range of builders operating at different scales and that most of the Starter Homes built are additional to those which would otherwise be delivered. Brian Berry (left), Chief Executive of the FMB, commented: “Taken together, announcements on housing set out by the Conservatives over the last few days amount to a welcome set of proposals. The continuation of more relaxed rules on home extensions until 2020 will support extra work for small builders and provide them with greater long term business certainty. What’s more, these proposals are good for home owners as they give them…
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Outright owners of homes outstrip mortgage holders
Of the 22.6 million households in England, 7.4 million owned their property outright, and 6.9 million had a mortgage, the English Housing Survey revealed. The rest rented their homes. This marked a shift from an equal level among owners a year earlier. The proportion of owner-occupier households increased steadily from the 1980s to 2003 when it reached a peak of 71 per cent, but since then it has dropped annually. The data shows that the younger generation in particular are struggling to own property. In 2013-14, some 48 per cent of households made up of 25 to 34-year-olds rented their home from a private landlord, up from 45 per cent a year earlier, and from 21 per cent in 2003-04. Over the same 10 years, owner occupation in this age group dropped from 59 per cent to 36 per cent, with many people in this age group having little alternative but to remain living at home with their parents or turn to private rental accommodation, with greater demand fuelling the expanding private rented sector (PRS). Official data shows that in 2013-14, 19 per cent of households were renting privately, up from 18 per cent in 2012-13. In fact, the PRS…
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