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New pilot scheme starts in UK as part of Right to Buy scheme
Housing association tenants in some part of the UK can now move towards home ownership under new government plans to extend their right to buy. They are the first in the country to be able apply to the new Voluntary Right to Buy scheme as part of a pilot that is being run by five housing associations ahead of a national rollout later this year. It is part of a voluntary agreement between the government and the National Housing Federation to extend the Right to Buy to 1.3 million housing association tenants. Under the agreement, every home sold will be replaced nationally with a new affordable home. The existing Right to Buy gives social housing tenants the opportunity to buy their home with a discount of £103,900 in London and £77,900 elsewhere. ‘Thanks to the historic voluntary agreement with the sector a further 1.3 million housing association tenants now have the chance to open the door to their own home, starting with this trailblazing pilot scheme,’ said Communities Secretary, Greg Clark. He explained that the pilot will help inform the design and implementation of the main scheme before it is rolled out across the country following the passage of the Housing and Planning Bill. Applications for the pilot scheme are now open. He added that the government is committed to getting a million more people into home ownership by 2020 and it has recently been announced that investment in housing is doubling to more than £20 billion over the next five years to support the largest housing programme by any government since the 1970s. Continue reading
Equity release by UK home owners reaches new record
Equity release lending in the UK reached a new high of £1.61 billion in the final quarter of 2015 as home owners over the age of 55 unlocked a record amount of housing wealth, new data shows. Lending via drawdown products totalled £271 million between October and December 2015, the largest quarterly total since this type of lifetime mortgage first emerged in 2004, the data from the Equity Release Council sows. Some 70% new plans agreed in the fourth quarter of 2015 were drawdown, up from 63% in the previous quarter as more people opted to withdraw their housing wealth in stages to boost their retirement income as and when they need it. Drawdown lending for the whole of 2015 was also the highest on record at £961 million. It pushed total equity release lending activity by members of The Council to an unprecedented £1.61 billion, up 16% from £1.38 billion in 2014. Last year saw more than 22,500 new plans agreed for the first time since 2008. At 22%, the year on year lending growth rate in the final quarter of 2015 was the largest of any quarter last year, despite a slight dip in quarterly lending from £453 million in the third quarter to £445 million. Since falling to a post-recession low of £789 million in 2011, annual equity release lending has more than doubled in the last four years and now exceeds its pre-recession peak of £1.21 billion. Over the whole of 2015, drawdown lifetime mortgages accounted for 66% of new plans agreed, while lump sum lifetime mortgages made up 34% and home reversions were below 1%. ‘These year-end figures are the latest sign of growing reliance on housing wealth as a key pillar of later life financial planning. The rising popularity of drawdown has been one of the success stories of the last decade, and product features have since appeared allowing customers to protect a percentage of their equity as an inheritance, make part-repayments of capital or make interest repayments on their loan,’ said Nigel Waterson, chairman of the Equity Release Council. ‘Looking ahead, the challenge is to continue developing products which meet consumer needs while ensuring that innovation is combined with protection and long- term sustainability. The work led by The Council and its members to uphold standards for equity release products and advice has been fundamental to creating a safe market for consumers, and we will continue these efforts to meet growing customer demand alongside regulators and the Government,’ he explained. ‘Housing wealth is often people’s greatest asset and it makes sense for equity release to be on every homeowner’s checklist to consider as part of their retirement and estate planning. At the same time, it is not suitable for every circumstance, which is why professional financial advice and independent legal advice are essential so that customers understand how the products work, and what they can offer…. Continue reading
Prime property rents in Home Counties in UK fell at end of 2015
Rents in the prime country house market in the UK’s Home Counties fell by 0.3% in the final three months of 2015 but were up 4.3% year on year, the latest index data shows. It follows a 0.8% drop the previous quarter but overall higher stock levels have ensured greater flexibility from landlords on rents, tipping the balance in the favour of the tenant, according to the prime country index from Knight Frank. It points out that in 2015 landlords looked to keep void periods to a minimum and remain competitive while agents noted that the number of properties available to rent across the Home Counties has been steadily rising over the last year. The report reveals that an increasing number of owner occupiers have been entering the prime rental market as higher tax burdens are felt by potential buyers. The data also shows that that the number of individuals registering their interest in renting in the Home Counties between October and December was up by 10% year on year and the total number of viewings conducted was up by 22% over the same time. As ever demand from individuals relocating for work, both locally and from overseas, continued to form a significant proportion of the market in the fourth quarter with a number of move-ins scheduled for early 2016, especially in the prime commuter hotspots of Ascot, Cobham and Esher. In 2015, around 40% of Knight Frank tenants in the Home Counties were from overseas, led by Europeans who accounted for 14% of all tenancies agreed and North Americans who accounted for 13% of all tenancies agreed over the period. Demand has generally come from professional couples and families, looking for flats and small houses. In the super prime market, for properties above £15,000 per month, larger budget tenants have been less active. Continue reading
