Tag Archives: europe
British PM pledges 200,000 starter homes in next five years
British Prime Minister David Cameron has called for a national crusade to get homes built and promised to change planning rules to boost the number of affordable properties such as starter homes for first time buyers In a speech he said that there will be an overhaul of Whitehall and town hall planning rules which prevent house builders from offering low cost, affordable home ownership. Starter Homes will be sold at a 20% discount to first time buyers under the age of 40 and 200,000 will be delivered by 2020. ‘We need a national crusade to get homes built. That means banks lending, government releasing land, and planning being reformed,’ Cameron said, adding it will be part of a dramatic shift in housing policy. One of the problems, he claimed, has been that until now affordable homes have been for people to rent, not own and developers have been tied by rules regarding what kind of affordable homes can be built. ‘Those old rules which said to developers: you can build on this site, but only if you build affordable homes for rent, we're replacing them with new rules. You can build here and those affordable homes can be available to buy. Yes, from generation rent to generation buy,’ Cameron added. However, the British Property Federation (BPF) has urged the Government to focus on delivery of all housing tenures, not just homes to buy. The organisation has warned that, although initiatives to create more homes for sale are welcome, high house prices and the growing number of private renters in the UK means that more must be done to encourage the purpose built rental sector which it said has £30 billion ready to invest and the potential to deliver a significant number of new homes. ‘Politicians talk about Generation Rent as if it is something to be ashamed of, when this should not be the case. Countries such as Germany and the United States have thriving rental markets, where people happily live in institutionally backed, purpose built, high quality rented accommodation for many years,’ said Melanie Leech, chief executive of the British Property Federation. ‘While we are not against owner occupation, and see Starter Homes as a welcome initiative, we are aware that such a policy is stoking demand for home ownership, rather than focusing on meeting supply. Build to rent has enormous potential to deliver additional homes to the UK, and government must not overlook this in blind pursuit of making us a nation of home owners,’ she added. According to Mark Hayward, managing director of the National Association of Estate Agents (NAEA) 200,000 new homes is not enough. ‘We first heard this pledge in Cameron’s pre-election campaign, and we still support the sentiment. However, other initiatives such as the Help to Buy scheme still remains in place and it boils down to the fact that we are still waiting to see new homes being built; and whilst we wait capacity remains… Continue reading
Average home price in London set to reach £1 million by 2020
If the current annual rate of price growth in London continues, the average price of a home would be £1 million by the end of 2020, new research has found. The prediction is made as the price of property coming to market in London has rebounded from its holiday season lull to jump by 2.2% or £13,177, according to online property portal Rightmove. Indeed, the average price of a newly marketed home in the capital is at a new all-time high of £620,003, up by 0.8% or £4,888 on the previous record set in July of this year. ‘This month’s 2.2% rise more than reverses the seasonal slowdown over the last two months when the average price of property coming to market fell by 0.6%,’ said Miles Shipside, Rightmove director and housing market analyst. ‘It’s a volatile time of year for average prices however, as potential sellers of higher priced properties tend to refrain from coming to market in the holiday period, but then get on with their home moving plans again in September partly influenced by children going back to school. The back to normal service has resulted in new seller asking prices reaching another milestone, with a new record high,’ he explained. The annual rate of increase is now up to 9.5% as London’s long term supply/demand imbalance and international allure result in underlying upwards price pressure, enabling the capital’s property market to maintain its upward trajectory through temporary upheavals such as the recent election. Rightmove calculates that if the current annual rate of price growth was maintained for the next five years the average price tag of a London home would be £1 million by the end of 2020. ‘The average price tag on a newly-marketed property is £53,923 higher in September this year than last and if this trend were to continue it would hit £1 million in just over five years. While we are not suggesting that this level of growth can or will be maintained, this extrapolation illustrates the desperate need for more building and more affordable housing in and around the capital,’ Shipside added. Lee James Pendleton, director of James Pendleton Estate Agents, confirmed that the summer has been good for London property. The firm has experienced a huge upturn in the market around Wandsworth, Lambeth and Hammersmith and Fulham. ‘While there have been less buyers overall, there are more quality buyers. One example of a place that’s booming is Nine Elms in Battersea, where studios that had been selling for £450,000 are now selling for over £600,000. These new developments have had a ripple effect on Wandsworth in general, with prices up around 15% in some places,’ he pointed out. Continue reading
Cooling house market growth in California affects US market as a whole
A California cooling effect could put a freeze on US property market growth with affordability in many of the state’s markets out of reach, says the latest analysis report. Since 2012 price growth in California has buoyed the West of the nation and helped support nationwide prices appreciation, according to the report from Clear Capital, but now there is evidence of cooling price appreciation across the state. It explains that typically, price increases are driven by increases in demand, however, a look at the San Francisco housing cycle shows that between 2011 and 2015 the spike in prices has not been the result of increases in overall transactions. Rather, the tight supply is pushing prices on an upward trajectory placing the market even further out of reach for new buyers. It also shows that in slower growth markets like Los Angeles, a mortgage payment requires upwards of 70% of a potential first time buyer’s income, certainly quelling demand. Even the San Jose MSA’s appreciation, which began experiencing dramatic bubble like growth in 2013, is beginning to slow down with quarterly growth of 2.5%, less than half of the 5.8% quarterly growth seen two years ago. While the West continues to lead in sustained gains, markets outside of California will need to work harder to defend the region’s top position, according to the report. Las Vegas and Portland have both seen boosts of 0.2% in quarterly growth since last month. Denver, Seattle and Sacramento continue to hold steady at 1.7%, 1.6% and 1.5% quarterly growth, the data also shows. The Midwest and South continue to ride the wave of the peak summer real estate season with quarterly growth rates at or above the national benchmark of 0.8%. The South ends the quarter at 0.8% growth, and the Midwest ahead at 0.9%. Subsiding losses in the Southern region is a good sign for a region that has exhibited volatility in price trends, the report points out. The Northeast continues to lag behind the rest of the nation in both quarterly and yearly growth at 0.2% and 2.1% respectively. While most of the MSAs in the region are still experiencing positive quarterly growth, with the exception of Providence with a fall of 0.8%, the rate of growth in markets like Boston and New York are over double that for the rest of the region, driving down affordability. ‘The strong continued growth in the Midwest, South and West, in particular the California Bay Area, suggests strong consumer and investor confidence has been seemingly unaffected by talk of looming interest rate hikes,’ said Alex Villacorta, vice president of research and analytics at Clear Capital. ‘However, if and when interest rates do rise, likely occurring by the end of 2015, it will be timed with a decrease in real estate market activity typical through the fall and winter seasons,’ he explained. ‘Unfortunate pairing will most likely cause a slowdown in price growth for most markets,… Continue reading
