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Low cost rental property programme launched in the UK
A new pioneering £400 million programme has been launched in the UK to boost the building of new affordable rental homes available at below market rates. Current schemes like Help to Buy have boosted house building and allowed 53,000 households buy a home with a fraction of the deposit they would normally require and now the government wants to do the same for the rental market. Communities Secretary Eric Pickles said that the new Rent to Buy provides more flexibility for people who want to rent affordably now, save for a deposit, and then either buy the new home or a different home later. Under the scheme, housing associations and other providers can bid for a share of £400 million in low cost loans to build up to 10,000 new homes across the country from 2015 to 2018. They will mainly consist of one and two bedroom apartments. Landlords must make the homes available for rent at below market rates for a minimum of seven years. Pickles said that this fixed period will give tenants the opportunity to save up for a deposit and get ready to buy their own home. At the end of the period, the tenant will have first refusal to buy the property or alternatively they may choose to move out and buy a different property, or rent another property either privately or with the housing association. If the home is sold, the housing association will then have the option to use any returns on their investment to build even more affordable homes in the area. Alternatively, they will still have a home, which they can look to rent at an affordable rate to another tenant who needs help to buy. This programme is part of a broader £23 billion affordable homes programme for 2015 to 2018, as well as other schemes like Help to Buy providing low deposit mortgages and Right to Buy which provides home ownership for council tenants. Pickles pointed out that these schemes are being arranged now, so construction works starts from 2015. ‘This government is standing by people who work hard and do the right thing, and helping them move on and up in life,’ he said. ‘Both house building and the number of first time buyers are now at their highest rate since 2007. But there is more to do. As part of our wider housing programme, this new scheme will help increase the provision of low cost rented accommodation and provide a springboard for young people to upgrade to home ownership down the line,’ he added. Under the deal housing associations will have up to 16 years to pay back the low cost loans. Until the loans are repaid, the homes must be made available for affordable rent. Only once the loans are paid can the housing association sell or rent it out at a market rate. Of the £400 million of government loan funding for this scheme, half of this will be available in London. London based housing associations… Continue reading
Dubai to introduce new measures to ensure broker transparency
New measures are being introduced in Dubai next year to make sure hundreds of new real estate brokers are monitored. The Emirate has seen over 500 new brokers setting up this year alone and the Real Estate Regulatory Agency (RERA), the regulatory arm of Dubai Land Department, wants to make sure they are compliant. It has announced the introduction of four new regulations to control brokers at a time when the real estate broker sector is booming due to the recovery in the property market. Overseas buyers are again investing in Dubai led by Indian and British nationals. ‘We are going to introduce four new measures to control the brokers. We had over 8,000 brokerage firms with 10,000 brokers at one time, but now we have 2,205 firms with 5,021 brokers. We saw 567 new firms setting up business this year and we believe the numbers are still high for Dubai,’ said Marwan bin Ghalita, RERA chief executive officer. The new regulations will come into force next year and will see the pass mark for the mandatory test for renewal of broker’s license rise from 75% to 85%. Also, broker cards will be eliminated, but broker registration will be linked with Emirates identification. The changes will also mean that new brokerages will be allowed only four broker visas to start with and any increase will depend on their performance. Brokers, who fail to do any transaction for six months to 12 months will have their registration cancelled. Other changes are being considered. For example there is concern at an industry level that property owners not signing broker contract agreements, known as Form A. RERA is now considering making the contract obligatory before a property can be marketed. ‘If the seller does not signing Form A, the seller will not be able to list the property and sell it through any agent in Dubai,’ he disclosed, adding that a multiple listing system would come in place soon which will limit the listings for the seller in the market. Since May unified real estate contracts have been mandatory with the aim of protecting the rights of sellers, buyers and brokers in any real estate transaction. The latest data from the Dubai Land Department show that there were 17,289 real estate transactions worth AED37.5 billion in the first half of the year. Indian and British buyers topped the list for foreign investment and Jordanian investors led the regional list of buyers. ‘To say that we are delighted with the real investment transaction figures from January to July would be an understatement. We are extremely proud of these positive results, as they reflect a building momentum in Dubai’s real estate market,’ said Sultan Butti Bin Mejren, DLD director general. ‘Dubai’s real estate market has now reasserted itself on both the regional and global stage. We are certain that the future will see even more demand, especially in light of the government's declaration of forthcoming major projects,’ he added. A breakdown of the figures show that Arab Investors completed… Continue reading
Under 35s pay thousands more for housing than pensioners in England and Wales
A soaring divide in housing means older people pay just a fraction of the money towards housing that younger people in England and Wales, new research shows. On average the under 35s pay over £6,600 more per household than the over 65s and around £4,400 per household more than the 50 to 64 year olds, says new research from Savills published at RESI, the annual housing conference run by Property Week. The research also shows that households where the main householder is the under the age of 35 spend some £37 billion per year on housing equivalent to £8,600 per household of which 56% is paid in rent to private landlords. In contrast for the over 65s it is just 12 billion or £1,939 per household, reflecting both the extent to which those holds have been able to initially access home ownership and pay off their mortgage. ‘These figures reflect the generational divide in the housing market that needs to be reflected in housing policy. The youngest households have reduced access to homeownership, are paying more rent and have less opportunity to accumulate housing wealth. In London alone they pay around £8.3 billion in private rent,’ said Lucian Cook, director of UK residential research at Savills. He pointed out that significant investment is needed in the private rental sector to meet their needs, with a concerted effort to bring in institutional investment through build to let. But at the other end of the scale, more needs to be done to encourage downsizing, particularly in terms of the new housing we build. Not only would that mean more efficient use of our housing stock, but it would also help housing wealth to be passed down the generations and recycled in the housing market to limit the decline in homeownership. For those in the 35 to 44 age group, whose housing bill of £53 billion or just under £7,700 per household, the key short term focus is on interest rates. Some 63% of their housing costs are taken up by mortgage payments and that a 2% interest rate rise would add 18% to their total housing bill. ‘While the under 35s are protected from an increase in interest rates over the short term, given more of them are renting, this may impact their future access to home ownership because if they do get a mortgage the cost of servicing it will be a greater constraint, particularly given stress testing of affordability following the mortgage market review,’ said Cook. Continue reading
