Tag Archives: crisis
England now needs 260,000 new homes a year!
In the 10 years since a major housing review report warned that at least 210,000 new homes a year needed to be built in England, an average of just 115,000 have actually been built. According to the author of the original report, Kate Barker, it means that the country is now one million homes short of what was needed to adequately house its population and prevent a worsening affordability crisis. Her latest report for the Home Builders Federation says that to put this into perspective, this shortfall is now equivalent to the number of homes in Birmingham and the surrounding areas. And reducing the long term trend and gradually pricing households back into the market will now require 260,000 private housing starts per year, some three times the number completed last year and a figure achieved in only four years since World War II. Even achieving the least ambitious of Barker’s three objectives, to slow down the rate at which households are priced out of the market, would require more than 200,000 private starts per year, a figure last achieved in 1973. ‘The Barker Review was a seminal report for housing and starkly illustrated the scale of the emerging crisis. Since then successive governments have failed to pay heed and develop policies to deliver the homes the country needs,’ said Stewart Beaseley, executive chairman of the HBF. ‘Whilst the Help to Buy Equity Loan scheme is finally starting to drive demand and significantly increase supply, we start from a very low base and the shortfall is huge,’ he told the organisation’s Policy Conference. ‘As we approach a general election, we now need to see all parties committing to policies that lead to a sustained increase in house building. We have to build our way out of the crisis. Building the homes the country needs will provide the decent homes people deserve and create hundreds of thousands of jobs,’ he added. Barker told the conference that the continued shortfall in housing supply matters most to those who lose out in the battle for dwelling space. She explained that even 10 Milton Keynes would only deliver 30,000 home a year, nowewhere near what is needed. ‘At the moment the cost is falling heavily on many families in the private rented sector. It is vital to raise the rate of new supply but also to develop coherent policies to address the consequences of the supply shortfall,’ she added. Continue reading
UK property prices up 6.8% year on year, latest ONS data shows
UK house prices increased by 6.8% in January compared with a year earlier, taking the average home price to £254,000, according to the latest data from the Office of National Statistics (ONS). This is a monthly increase of 5.5% compared to December 2013 and the price growth was seen across all parts of the UK. House prices grew by 7.1% in England, 6.9% in Wales, 1.4% in Scotland and 2.7% in Northern Ireland. London is again showing the highest growth at 13.2%, followed by the South East at 7.1% and the West Midlands at 5.3%. Excluding London and the South East, UK house prices increased by 3.8% in the 12 months to January 2014. The data also shows that on a seasonally adjusted basis, average house prices increased by 0.6% between December 2013 and January 2014. It means that first time buyers, regarded as an essential part of the property market recovery, are paying more. The ONS figures show that in January prices paid by first time buyers were 7.6% higher on average than in January 2013. For existing owners prices increased by 6.5% for the same period. According to Peter Rollings, chief executive officer of Marsh & Parsons, with the average UK house price now over £250,000, it means that the bulk of transactions are within the 3% stamp duty tax band and this will provide yet more ammunition for critics who believe the Chancellor played a bad hand by not reforming stamp duty thresholds in last week’s budget. ‘The London property market is still soaring ahead, with a 13.2% annual house price increase which dwarfs that in the rest of the UK. The average property price in the capital is now over three times that in the North East. Unwavering demand from UK and overseas buyers is a key ingredient behind this rate of growth, and Prime London property continues to be a Mecca for property investment,’ he explained. ‘And with pensioners now freed from the shackles of annuity, the buy to let market could become a Holy Grail for retirement, offering unrivalled tax efficient investment,’ he added. David Newnes, director of Your Move and Reeds Rains, part of LSL Property Services, pointed out that momentum is growing as lending has increased substantially in the last yea. ‘This is largely thanks to the combination of consumer confidence, an array of attractive mortgage deals and a real willingness on the part of banks to lend to borrowers with smaller deposits,’ he said. ‘Pricing is being driven by greater lending availability, positive consumer sentiment as the jobs market continues to improve along with the wider economy. Cheaper rates and increased high LTV lending has encouraged more first time buyers to invest in property,’ he added. But he warned that rising demand for housing must be matched with rising supply if the government is to bring the cost of housing within the reach of first time buyers. In the context of the cost of living crisis which has been central in the… Continue reading
Scottish prime property market sees strongest year start since 2008
The prime residential market at £400,000 and above across Scotland experienced a strong performance last year, with a 22% annual increase in activity. In this sector there were 2,536 transactions during 2013, according to the latest analysis report from Savills which shows that the market was robust from spring 2013 onwards with deals being done throughout the winter period. A further 188 prime transactions were registered in January 2014 across Scotland, making it the busiest start to the year since 2008. Savills says that the prime market is being boosted by the hubs of Edinburgh, the Aberdeen area and Greater Glasgow, where prime activity increased annually by around 25% in each location. The prime market in Edinburgh was heavily supported by the hotspots of Grange, Morningside and Merchiston. Prime transactions in this combined area increased by 29% last year. The West End of Edinburgh and the northern suburb of Trinity also enjoyed a better market in 2013, following slightly lower activity in the previous two years. Similarly, the prime southern Glasgow suburbs of Pollokshields, Newlands, Giffnock and Newton Mearns experienced a strong market last year with a 31% increase in activity. These areas continue to be supported by top quality education facilities and excellent transport links. ‘We have noticed a change in the buyer age group over the course of the last year. In previous years there was an over reliance on those aged 50 and above driving the market. However, the prime market in the city hotspots of Edinburgh and Glasgow is increasingly being driven by younger professionals aged from 30 to 39, comprising around 40% of Savills sales last year,’ said Faisal Choudhry of Savill’s research team in Glasgow. ‘This target market had been somewhat subdued following the housing market downturn, mainly due to affordability issues. However, there was an ever present pent up demand among this age category aspiring to upsize. This age group is now more active and is enabling the whole of the market to move again following low levels of sales during 2011 and 2012,’ he pointed out. ‘The market strength in the core locations of Edinburgh, Aberdeen and Glasgow has spilled out to some of Scotland’s provincial locations, such as Tayside, where prime transactions increased last year by 19%. The prime markets in Ayrshire and the Borders also improved The analysis report explains that prime values across Scotland have fallen over the last few years due to the high levels of stock available on the market. However, the significant increase in prime sales has created a net reduction in stock levels. ‘Supply in some hotspots in Edinburgh and Glasgow has been decreasing, resulting in a slight rise in values, particularly towards the end of last year. The rebalancing of supply and demand has started in the country locations of Scotland with values beginning to stabilise during the last quarter of 2013. We expect a gentle rise in Scottish prime values during 2014 when supply and demand eventually rebalance,’ added Choudhry. Continue reading
