Tag Archives: crisis
Latest data shows UK help to buy schemes attracting strong support
New figures show the UK government’s flagship Help to Buy scheme is helping more people onto the property ladder and getting more homes built. The Help to Buy schemes have created over 54,000 home owners in England with over 39,000 households buying new built properties through the equity loan and NewBuy options, and 15,000 households buying through the mortgage guarantee. A further 3,400 new homeowners have been created in Scotland, Wales and Northern Ireland through the Help to Buy mortgage guarantee scheme, Housing Minister Brandon Lewis has announced. A breakdown of the figures show that around eight out of 10 sales went to first time buyers and as a direct result thousands of new home owners were created and private house building starts rose by a third. House building has climbed to the highest level since 2007, construction output has seen the sharpest expansion for eight months, and companies are now taking on workers at the fastest rate since 1997. ‘The figures clearly demonstrate the continuing success of the Help to Buy in supporting creditworthy, hardworking people who want to buy a home of their own. Over 54,000 new homeowners have now used the schemes as a valuable alternative to the Bank of Mum and Dad, enabling them to buy with a fraction of the deposit they would normally require,’ said Lewis. ‘But it’s also got Britain building and since the scheme’s launch private house building starts has increased by a third,’ he added. Sales of new build homes have been strong across the country. The highest number of equity loan sales were in Wiltshire with 603 sales, Leeds with 559 sales, and Central Bedfordshire with 499 sales and 20 local authorities have all achieved over 300 sales. The average price of a home is below the national average at £210,000 under the equity loan and £153,000 under the mortgage guarantee. Continue reading
Residential development land growth in England and Wales moderates
Residential development green field land prices in England and Wales rose by 0.2% in the third quarter of the year but the growth rate is moderating. According to the latest figures from Knight Frank the annual increase in the third quarter of the year was 3.7%, down from the 5.6% annual rate of growth in the second quarter of 2014. The firm says that while the appetite for the best sites is still strong, rising material costs and a shortage of skilled labour is starting to weigh on prices. Prices in London are still advancing faster than the rest of the country, the average annual rate of growth for sites in prime central London slowed from 18.9% to 18.7% in the third quarter. ‘While house price growth is starting to slow, there is still room for more growth in development land, especially in commuter zones around London and other key cities,’ said Grainne Gilmore, head of UK residential research at Knight Frank. ‘However the disparity between the best sites and those that are compromised may become more entrenched and competition for good development sites remains strong throughout the country. But there is no doubt that developers are becoming more selective about the sites they consider,’ she explained, adding that this has been reflected by a slight slowing in sales volumes in recent months. Mirroring the trend in house prices, there has been a ripple effect from central London, with sites in key commuter towns close to the capital proving the most alluring for developers. ‘While planning remains a thorny issue for developers and house builders, these concerns have been somewhat overshadowed of late by the rising cost of construction and the difficulties in sourcing workers with suitable skills to build out sites,’ said Gilmore. ‘Shortages of material have contributed to rising prices, and this, a well as the shortage of labour, can be dated back to the financial crisis, when construction activity all but ground to a halt,’ she pointed out. ‘The very moderate growth in house building in the years following the zenith of the financial crisis were not enough to power up the industry for the sharp rise in activity seen over the last 18 to 24 months. So the delivery of materials and a workforce with the necessary skills is now proving problematic,’ she added. The report also shows that there has been a sharp rise in the number of respondents to the RICS survey saying that labour shortages and rising material costs are limiting levels of construction activity. These factors are now starting to weigh on development land prices, with developers being cautious about future material and labour costs in such an environment. ‘While the rising cost of materials will directly impact margins, difficulties in accessing suitable labour could add to the length of time that elapses before units can be sold, which will also, in turn, push up costs,’ said Gilmore. ‘As a result, buyers are applying downward pressure to offers for development land…. Continue reading
Million pound plus home sales reach record high in the UK
The number of property sales worth at least a million pounds in the UK is at a record high, according to latest research from Lloyds Bank. There were 6,143 million pound property sales in the country in the first half of 2014 which is equivalent to 33 transactions everyday over the period. The 6,143 million pound property sales in the first half of the year represented a 46% increase compared to the same period in 2013 when sales totalled 4,198. Indeed, million pound home sales have grown by 345% since the first half of 2009, when sales in this market segment were at their lowest point in the past decade. However, while million pound home sales outperform the rest of the market, they are still a very small share of the overall market. The 46% increase in million pound home sales in the first half of the year significantly outpaced the 26% increase in the sale of properties below a million pounds over the period. Despite this large increase, the sale of million pound properties accounts for just 1.3% of all national residential sales although this share has more than doubled since 2009. But even in London, million pound sales account for just 7.6% of all sales. There were 1,360 homes sold for at least two million pounds in the first half of 2014, some 43% higher than over the first six months of 2013 when the number of sales totalled 949. Homes selling for at least two million pounds accounted for 22% of all million pound plus home sales in the first half of 2014. This proportion had edged down marginally from 23% in the same period a year earlier. As a proportion of all sales, homes sold for over two million pounds account for just 0.22%. Some 70% or 4,259 of all million pound home sales in Britain during the first half of 2014 were in London. The capital is followed by the South East with a share of 16% or 1,096 and the East of England at 6% or 109. All regions have recorded an increase in sales in 2014 compared to the same period a year earlier. The largest percentage rises in million pound home sales were in the North East with a rise of 150%, the West Midlands with an increase of 100%, South West up 87% and the East Midlands up 80%. In the two regions with the largest concentration of million pound sales, London and the South East, transactions rose by 47% and 41% respectively. The research also shows that close to a quarter of all million pound homes sold in Britain during the first half of 2014 were in the prime property locations of Kensington and Chelsea and Westminster at 13% and 10% respectively. Cheshire East and the City of Edinburgh recorded the highest number of million pound sales outside southern England. ‘The number of homes sold for at least a £1 million is at a record high, with this sector… Continue reading
