News
UK buy to let landlords increasingly looking for semi-detached properties
There has been a big jump in UK landlords looking to buy semi-detached property with demand for terraced houses almost half previous levels, new research shows. Landlords are also planning for steady growth in the buy to let property sector as optimism rises, according to the latest landlord research by Paragon Mortgages. The data shows that landlords on the lookout for a semi-detached property amongst those expecting to purchase buy to let property soon, have increased from 23% in the fourth quarter of 2014 to 35% in the first quarter of 2015. The specialist lender’s Private Rented Sector Trends survey, which has been tracking landlord confidence and views on the buy to let market for 13 years, also shows that the proportion of landlords looking to buy terraced property had fallen from 67% to 35%. The lenders says that this sharp turnaround in demand for these two different property types results in a more even distribution of interest across the broad spectrum of property types from landlords than previously. Overall, among those looking to buy, 30% of landlords expressed interest in adding a flat to their portfolio, 35% were on the look-out for a semi-detached house, 35% for a terraced house and 22% said they were considering more specialist units such as multi-unit blocks and HMOs. The report also finds a higher proportion of landlords are optimistic about the prospects for their property portfolios, with 27% feeling positive about the future and an increase in those expecting to buy sometime soon, up from 15% to 18%. ‘The growing proportion of landlords looking to purchase buy to let property sometime soon points to continued, steady growth in the private rented sector,’ said John Heron, the firm’s director of mortgages. ‘Meanwhile, a closer look at interest levels for different property types suggests landlords are taking a broader perspective in order to cater for the wider range of households looking for a suitable home in the rental sector,’ he added. Continue reading
New analysis reveals severe home planning shortfall in England
The property planning shortfall in England could grow to 180,000 over the course of the next parliament unless local authorities work together, it is claimed. The planning system is not delivering housing where need and market demand is greatest, according to a new analysis from real estate firm Savills. Its shows that the number of homes planned by local authorities in England is likely to result in a shortfall of around 36,000 homes a year, unless local planning authorities take greater account of housing need both within and beyond their boundaries. ‘Failure to cooperate on housing requirements across local authority boundaries is likely to result in an accumulated planning shortfall of 180,000 homes over the next five years. This is before we consider what house builders and other developers can deliver relative to these targets,’ the report points out. Figures shows that last year building starts reached 136,000 in England. However, according to analysis undertaken on behalf of the Town and Country Planning Association (TCPA), at least 240,000 new homes a year in England are needed from now to 2031. The greatest requirement is in London and the South East where the property market has been strongest. However, the Savills analysis shows that these are the areas where the deficiency in the number of homes being planned is likely to be the greatest. Housing targets adopted so far are 80% of the corresponding Strategic Housing Market Assessment (SHMA) figures across the country. ‘A continuation of this trend would result in a shortfall of 26,000 homes a year in the south and east of England, including London. This figure equates to 74% of total housing shortfall for the whole of England,’ the report says. Of a total 114 local authorities in the south and east of England, 31 or 27% have neither an adopted local plan nor a recent SHMA published since the National Policy Planning Framework (NPPF) was introduced in 2012, the report points out. Yet these local authorities currently accommodate a quarter of all existing households in the region and will face pressure to meet the requirements for housing emerging from London and surrounding local authorities,’ it adds. The 31 local authorities without post-NPPF local plans include Sevenoaks, Elmbridge and Epping Forest. These are strong housing markets where over 50% of the authority is designated as green belt. Shortfalls are less pronounced in the North, Midlands and west of England. Assuming targets adopted by the local authorities that still lack a post-NPPF plan are 80% of their SHMA, the annual planning shortfall could amount to 7,349 homes in the Midlands and west of England and 2,038 in the North. Despite the increase in planning permissions towards 200,000 homes per year in England last year, 20,000 were granted through appeal. A closer analysis reveals persistent problems in maintaining an adequate supply of land for housing and that this problem is most notable where the level of housing need is greatest. Continue reading
Shortage of property for sale keeping UK prices high, latest index data suggests
House prices in UK in the three months to April were 2.2% higher than in the preceding three months, according to the latest data from the Halifax. This particular measure of the underlying rate of house price growth fell for the first time in 2015 following three successive rises. But house prices increased by 1.6% between March and April. In contrast, annual house price growth increased slightly, from 8.1% in March to 8.5% but, nonetheless, the annual rate remains in the narrow range of 8% to 9% where it has been since the start of 2015 and is below last July’s peak of 10.2%. ‘Housing demand is being supported by a number of factors including economic improvement, rising employment and low mortgage rates. At the same time, supply remains very tight with a general shortage of properties available for sale,’ said Halifax housing economist Martin Ellis. ‘This combination has kept house price inflation steady in recent months with prices increasing by 2.2% to 2.6% on a quarterly basis and at an annual rate of 8% to 9%,’ he added. He pointed out that house prices are continuing to increase more quickly than average earnings despite the return to real earnings growth over the past few months. ‘The resulting rise in the level of house prices in relation to earnings should constrain house price growth and activity over the remainder of the year,’ he said. Ellis is predicting that the annual rate of house price growth is forecast to end the year at somewhere between 3% and 5%. The Halifax report points out that home sales were unchanged in March at 101,000 and were also static between the final three months of 2014 and the first quarter of 2015, but were 6% lower than in the first three months of 2014. Mortgage approvals have risen on a quarterly basis. The volume of mortgage approvals for house purchases, a leading indicator of completed house sales, fell slightly in March following three consecutive rises. Nonetheless, approvals during the first quarter of 2015 were 2.8% higher than in the final quarter of 2014. Supply remains tight. New instructions fell in March continuing the recent downward trend with declines in seven of the past eight months. This fall in instructions has contributed to the supply of homes on the market remaining low. Continue reading
