Housing Market
News covering issues affecting the UK residential property market, house prices, interest rates and buying and selling trends.
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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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What does new benefits cap mean for private rental market?
The government has published figures that reveal the impact of its 15-month-old household benefits cap which restricts payments to £500 a week for a family and £350 a week for a single person. Claimants who receive more than these figures have the excess deducted off their Housing Benefit entitlement and this, while applying to social housing providers, is also impacting the private rented sector – which costs the government approximately £10 billion a year in Housing Benefit payments. The scale of the cap has been significant, the figures released this week show. So far some 58,700 households have been affected and most of these have been larger families living in high rent areas. Before the election the Coalition hailed the scheme a success, saying some 22,000 households “have moved into work, reduced their Housing Benefit claim or [are] no longer claiming Housing Benefit at all”. The new Conservative government promised to reduce the cap further in its manifesto from a family annual maximum of £26,000 to £23,000 and this measure, the Queen’s Speech revealed, is to be introduced during the first year of parliament. What wasn’t mentioned in the speech was the affect this is likely to have on the…
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Airbnb makes a step closer to lettings market
The US-based home sharing website Airbnb, which enables its users to search through a database of over a million homes worldwide and 25,000 in the UK, has this week launched a professional property management software suite called Guesty aimed at professional landlords. At first glance the move would seem to contain little to worry the UK’s letting agents. Airbnb markets itself as a way for holiday makers to find affordable accommodation and avoid paying the high night rates that hotels and B&Bs charge. Described as part of the ‘sharing’ economy and using a model that’s compared with taxi service Uber, Airbnb recently claimed to have so far generated over half a billion pounds of economic activity in the UK. But what Airbnb is really muscling in on – in a way that might alarm some lettings agents – is the peripheries of the private lettings market as the service becomes a new and low-cost alternative income stream for landlords. The Guardian newspaper recently analysed more than 13,000 Airbnb listings in London – by far its largest UK market – and discovered that 6,600 of them offered an entire home or flat, rather than a spare room – a clear sign…
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Town planning expert slams Right to Buy scheme
Giving housing association tenants the right to purchase their homes will do nothing to solve the UK housing crisis but instead is aimed at targeting new Tory voters, a Birmingham City University expert has warned. Alister Scott, Professor of Environment and Spatial Planning at Birmingham City University, describe the Government’s plans to extend Right to Buy discounts to 1.3 million housing associations as a “double whammy and bad news for the provision of social housing”. The Government announced new measures in the Queen’s Speech to Parliament last week, giving tenants the Right to Buy their homes while requiring councils to sell off high-value properties and invest the proceeds into building affordable ones. But Professor Scott pointed out that history has shown that the replacements of new homes will not keep up with the losses of housing associations stock and high price stock of council housing, and that the spatial impact of where these properties are lost will be significant and will worsen the housing waiting lists. Professor Scott (right) also highlighted other Government initiatives that seem destined to fail. He commented, “David Cameron’s recent pre-election pledge for 200,000 new discounted houses is what I would call a ‘Ryanair approach to…
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PRS set to soar
The private rented sector (PRS) is expected to increase by 700,000 households to 5.5 million by 2020, accounting for one-fifth of the total housing stock in this country, according to a new report. A fresh study on the buy-to-let sector by Kent Reliance finds that the PRS now accounts for 18 per cent of all housing stock, after almost 150,000 new households were added to the PRS in the year to March. A higher number of buy-to-let investors entering the market coupled with capital growth have led to an average rise of 11 per cent in the total value of PRS property, or £97.8 billion, to £990.7 billion, with gains led by London, at £406.5 billion, followed by the South East at £147.6 billion. Andy Golding, Chief executive, Kent Reliance, said, “Buy-to-let has come of age, moving from a niche asset class to one big enough to rival the stock market. Landlords are seeing the benefit of a structural change in Britain’s housing market, with tenant demand ever strengthening. Yes, house prices are showing signs of steadying somewhat, but growth remains brisk.” If recent growth continues, the whole sector is set to be worth in excess of £1 trillion by…
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Sharp rise in new home registrations
Over 40,000 new residential properties were registered in the UK during the first three months of the year, a rise of 18 per cent compared to the corresponding period last year, the latest figures show. New house building data released by the National House Building Council (NHBC) for the first quarter of this year reveal that in total, 40,281 new homes – 30,691 private sector; 9,590 public sector – were registered. This represents a year-on-year rise of 26 per cent for the private sector, with the public sector falling slightly by just 1 per cent. In March alone, the figures show that 17,210 new homes were registered (13,068; 9,051 private sector; 4,017 public sector), up by almost a third on the corresponding month in 2014. NHBC Chief Executive, Mike Quinton (main pic), said, “Our figures show an encouraging start to 2015 with new housing registrations up 18 per cent on the first quarter of last year. Housing growth levels remain strong across virtually every part of the UK. “However, we have made clear that the UK is still building way below the volumes of homes that we need. NHBC looks forward to working with government to ensure that high quality…
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NLA slams CAB report
A new report which claims that landlords earn in the region of £5.6 billion a year from unsafe homes which fail to meet legal standards has been slammed by the National Landlords Association (NLA). The Citizens Advice study report, A Nation of Renters, says 740,000 households in England now reside in privately rented homes which present a severe threat to tenants’ health from problems like rat infestations and damp. Gillian Guy, Chief executive of Citizens Advice, said, “Rogue landlords are putting profits before safety.” The Government is planning to give councils new powers to tackle unscrupulous landlords which own homes with a category 1 hazard, as part of number of proposals to be tabled in a new Immigration Bill. The details of the Bill, which will be a central part of the new Government programme will be announced in the Queen’s speech this week. “The Government has rightly said it wants to tackle the country’s housing crisis – it must make targeting dodgy landlords, giving tenants better rights and driving up standards a major part of that effort,” Guy added. But while recognising that bad practice does exist in private housing, “and that it needs to be stamped out”, Richard…
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Post-Election housing market activity set to improve
House hunters faced with restricted choice could soon find that they have significantly more homes to choose from as the result of a post-Election surge in homes for sale, according to Righmove. The property portal is forecasting a sharp rise in the volume of residential properties set to come onto the market in the coming weeks, now that the Election uncertainty is over. In the three months after the May 2010 Election, the number of properties coming to market rose by 17 per cent compared to the previous three-month period, Rightmove said. “This is an election-driven price stall which gives some buyers only short-term relief from the back-drop of a long-term housing shortage, and many estate agents are now reporting a resurgence in interest following the surprise election result,” said Miles Shipside (left), Rightmove Director and Housing Market Analyst. He pointed out that the threat of Labour’s proposed mansion tax on homes valued at £2million-plus had “put a brake on the market”, but believes that “their removal gives a reason for a rebound in activity and prices.” Mr Shipside added, “Buyers should note that there is often a surge of property supply after an Election, as those who have held…
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Property industry welcomes new Tory Government
The Conservative victory in the General Election has been welcomed by the housing industry. It should provide welcome stability to the residential property market. Glynis Frew (left), Managing Director of Hunters Property Group, said, “We welcome a Conservative victory as this will bring some much needed stability to the property market, and from stability comes growth. We look forward to seeing the extension of Right to Buy to 1.3 million housing association homes in England, and more importantly, the introduction of 200,000 starter homes by 2020. We anticipate this will have a massive impact on the market. What’s more, the Government’s Stamp Duty reforms announced in December last year have already had a positive effect on the housing market, so we are pleased this will stay in place.” Lucy Morton, Director and Head of agency at Prime Central London estate agency, W.A.Ellis, said that her firm noticed an immediate change in sentiment from both vendors and purchasers after the election result, following months of uncertainty and the threat of Labour housing policies, including the planned introduction of a mansion tax. “A Conservative victory is a good result for the housing market, particularly in London,” she said. “As we opened for…
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