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Property and building industry welcomes details of UK’s new housing bill
The UK is to see an increase in the supply of new starter homes to be exclusively offered to young first time buyers under the age of 40, it has been announced by the government at the opening of the new parliament. The Queen’s Speech included a number of issues relating to the nation’s property markets which have been met with a positive reaction. The new starter homes for first time buyers will be offered at a 20% discount below their open market value and the current Right to Buy levels of discount will be extended to 1.3 million housing association tenants. To help with the chronic lack of housing local authorities will be required to dispose of high value vacant council houses which would help fund the Right to Buy extension discounts and the building of more affordable homes. The government will also take forward the Right to Build scheme, requiring local planning authorities to support custom and self builders registered in their area in identifying suitable plots of land to build or commission their own home. A statutory register for brownfield land will be introduced to help achieve the target of getting Local Development Orders in place on 90% of suitable brownfield sites by 2020. Along with this the neighbourhood planning system will be simplified and speeded up to support communities that seek to meet local housing and other development needs through neighbourhood planning. The reaction from the property and housing industries has been positive as all agree that there is a pressing need to build hundreds of thousands of new homes across the country and particularly in London. However, Adrian Gill, director of Your Move and Reeds Rains estate agents, questioned whether these new schemes are setting sights high enough. ‘Building a home in Britain is about 18% more expensive than in Ireland, for example. Preliminaries like planning fees account for 12% of the total costs in the UK, compared to 10% in Ireland. Reforming the red tape surrounding the house building process may be one of the only safeguards around steadier house price rises,’ he said. ‘Home ownership is still a key life milestone and aspiration for UK households, so any measures that bring this goal closer into view will be very welcome. The Right to Buy extension sounds good on paper –but we’ve yet to see how this will translate in practice, and the reality is that authorities will have to sell off existing stock first before they can fund and deliver this new promised land of affordable properties,’ he explained. ‘At the same time, tenant demand for housing will be accumulating, and this could spill over into the private rented sector, and artificially push up prices and competition for rental homes,’ he added. According to Charles Haresnape, chairman of the Intermediary Mortgage Lenders Association (IMLA), the government must work swiftly with the mortgage industry to ensure finance is available to help consumers with their purchases. ‘If not,… Continue reading
Greater London sees fall in home lending in first quarter of the year
There was a decline in in house purchase lending in Greater London in the first quarter of 2015 but increased remortgage activity, according to the latest regional data from the Council of Mortgage Lenders. First time buyers in Greater London borrowed £2.4 billion representing 10,100 loans, down by 16% in value and down 16% in number of loans compared to the last quarter of 2014. Compared to the first quarter of 2014, the total number of loans was down 14% and the amount borrowed decreased by 11%. Home movers saw a decrease in numbers to 7,200 loans advanced in the period, valued at £2.5 billion, which was down 18% by volume and down 15% by value on the previous quarter. Year on year comparisons show a decrease of 18% by volume and down 11% by value. Remortgage lending increased totalling 10,800 loans at £2.9 billion, which was up 10% by volume and up 13% by value. Compared to the first quarter of 2014, remortgage lending in London was up 2% by volume and 8% by value. According to Peter Rollings, chief executive officer of Marsh & Parsons, the lending market has calmed down from the heady heights of 2014 and the general election earlier this month also had an impact. ‘But cheaper mortgage rates are now making waves in the market, and with the wealth of products now available, we can expect this to ripple out into a stronger summer of lending,’ he said. He believes that the election result means political certainty and that along with a greater choice of homes on the market, and incentives like reduced stamp duty and Help to Buy support schemes at the lower rungs of the ladder will keep the market going. Continue reading
US existing home sales fell in April, latest NAR data shows
Despite properties in the United States typically selling faster than at any time since July 2013, existing home sales slowed in April, the latest data shows. But sales remained above an annual sales pace of five million for the second straight month, according to the report from the National Association of Realtors. The data report also shows that median existing home prices for all housing types in April was $219,400, which is 8.9% above April 2014, the 38th consecutive month of year on year price gains and is the largest since January 2014 when it was 10.1%. All major regions except for the Midwest experienced sales declines in April with completed transactions that include single family homes, town homes, condominiums and co–ops, falling 3.3% to a seasonally adjusted annual rate of 5.04 million in April from an upwardly revised 5.21 million in March Despite the monthly decline, sales have increased year on year for seven consecutive months and are still 6.1% above a year ago and NAR chief economist Lawrence Yun said that sales April's setback was the result of lagging supply relative to demand and the upward pressure it's putting on prices. ‘However, the overall data and feedback we're hearing from realtors continues to point to elevated levels of buying interest compared to a year ago. With low interest rates and job growth, more buyers will be encouraged to enter the market unless prices accelerate even higher in relation to incomes,’ he added. A regional breakdown of the figures shows that in April existing home sales in the Northeast declined 3.1% but are 1.6%. The median price in the Northeast was $253,200, which is 3.6% higher than April 2014. In the Midwest, existing home sales increased 1.7% and are 13% above April 2014. The median price in the Midwest was $173,700, up 11.4% from a year ago. Existing home sales in the South declined 6.8% but are still 3.6% above April 2014. The median price in the South was $189,400, up 8.5% from a year ago. In the West existing home sales decreased 1.7% but are still 6.4% above a year ago. The median price in the West was $318,700, which is 10% above April 2014. Total housing inventory at the end of April increased 10% to 2.21 million existing homes available for sale, but is still 0.9% below a year ago while unsold inventory is at a 5.3 month supply at the current sales pace, up from 4.6 months in March. With demand far exceeding supply, properties sold in April faster, at 39 days, than at any time since July 2013 when it was 42 days and the second shortest time since it was 37 days in June 2013. Short sales were on the market the longest at a median of 180 days in April, while foreclosures sold in 50 days and non–distressed homes took 38 days. Some 46% of homes sold in April were on the market for less than a month. ‘Housing inventory declined… Continue reading
