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Court ruling means UK new home targets are more difficult, it is claimed
A land broker has warned that a recent High Court ruling lessens the likelihood of the UK ever hitting its house building targets. Following a legal challenge by Reading Borough Council and West Berkshire District Council, the ruling by Justice David Holgate forced ministers to scrap guidance which excluded developments of 10 homes or fewer from the requirement to provide or contribute to affordable housing provision. The Department for Communities and Local Government (DCLG) has said it will appeal the High Court’s ruling. However, according to Home Counties land broker Aston Mead it will lead to fewer homes being built as a result. ‘It has already stopped a stack of proposals in their tracks and a lot of sites in our pipeline are now being renegotiated,’ said Aston Mead director Adam Hesse. ‘Sites that may well have been suitable for 10 units will now be reduced to whatever the new threshold is, so full use won’t be made of the brownfield land available. Consequently it will mean less income for districts and boroughs, the very same organisations fighting for a change to the guidance in the first place. It’s utter madness,’ he added. He also pointed out that the contribution that small developers make to the house building programme should not be underestimated. ‘Small sites are the engine rooms of UK development. They are invariably built by small firms who have proportionately higher costs. The economic viability of their schemes is often on a knife-edge, with little ability to challenge local authority demands for affordable housing,’ said Mead. ‘This latest ruling now means that they will simply give up trying to build on certain sites, leading to fewer homes of all types. What’s more, small and little used commercial sites which could be more productively turned over to residential housing won’t even be attempted,’ he explained. ‘The country desperately needs more homes. It is already falling far short of current house building targets. A ruling like this is a significant blow for smaller residential developers and will only serve to ensure that those targets are even harder to meet,’ he concluded. Continue reading
Lending for UK buyers sees growth, especially for first time buyers
House purchase lending in the UK increased by 9% in July compared to the same time last year with the economic outlook allowing more people to enter the property market, according to the latest data. The figures from the Council of Mortgage Lenders show that first time buyers saw a month on month increase by volume and by value in activity compared to June and a year on year rise compared to July 2014. Home mover lending saw larger monthly and annual increases than first time buyers by volume and by value but home owner remortgage activity saw a slight dip month on month but substantial increases when compared to the same month in 2014. Buy to let continues to grow year on year and month on month, mainly driven by buy to let remortgage activity, the CML data also shows. ‘The market has shown steady growth in house purchase and buy-to-let over the past few months with general improvements in economic factors across the UK allowing for more people to enter the property market,’ said Paul Smee, director general of the CML. ‘This positive direction of travel going into the autumn months reinforces our recent revised forecasts that lending levels should continue to grow gradually over the rest of the year after a subdued beginning of the year,’ he added. House purchase lending in the UK saw its third consecutive month on month growth by volume and by value in July. This was also the second month that volumes and values increased compared to the same month in 2014. As previously reported, UK gross lending in July totalled £21.7 billion, up 8% on June and 12% up on July last year. Overall in July, the value of home owner loans for house purchase accounted for 56% of gross lending, while remortgage activity accounted for 24%. The rise in the number of loans for house purchase in July was driven by both first time buyers and home movers. However, the increase in volume and value terms for home movers was much stronger than for first time buyers. This was the highest monthly lending level by volume since November 2007, and by value the highest monthly level since October 2007. Nevertheless, first time buyers took up 45% of total house purchase lending, which continues to make up a larger proportion of activity than pre-crisis levels when it made up as little as 30% of the number of loans for house purchases. Buy to let as a proportion of total lending was 18% in July. It was the highest monthly first time buyer lending level by volume and value since August 2007. The proportion of first time buyer gross household monthly income in July to service the capital and interest rate payments of their mortgage rose slightly from 18.3% in June to 18.5%. This is still lower than in July 2014 when it was 19.5%, and much lower than… Continue reading
New property for sale figures down across the UK
The number of new properties being listed by estate agents fell by 6.6% across the UK in August, adding to the lack of properties on the market for sale, new research has found. The biggest month on month fall was in Taunton where the number fell 31.1% new property listings in Loughborough dropped 28.5% despite seeing a significant increase of 12.6% the previous month. In London the lack of supply is reaching critical levels, according to the supply index compiled by online estate agent House Simple. The number of Londoners putting their properties on the market has fallen dramatically over the summer, with new property listings down 24.8% since June. The index, compiled from data relating to the number of new properties listed on Rightmove every month in more than 100 major towns and cities across the UK and all London boroughs, shows that the Midlands and South of England have been the worst hit regions in August, with 12 of the 15 cities experiencing the biggest drop in new property listings last month in these areas. It also reveals that since the start of June, not a single borough in London has seen an overall rise in new property listings. Kensington and Chelsea has been the worst affected borough with new property listings down 43.6% since the start of June, while the borough of Haringey saw new stock levels fall 36% since the start of the summer. ‘Across the country there are thousands of frustrated buyers, with finance in place, ready to purchase, but the property supply reservoir has dried up,’ said Alex Gosling, the firm’s chief executive officer. ‘They must be scratching their heads as to why sellers aren’t marketing, as there’s no clear or single reason why sellers are sitting on their hands. The general election was expected to be the catalyst for sellers returning to the market,’ he pointed out. ‘We would expect to see activity drop off over the summer holidays, so September will give us a better gauge as to how imbalanced supply and demand are right now. The hope is that after a summer when supply fell off a cliff, sellers will rediscover their appetite over the coming months,’ he concluded. Continue reading
