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First ever rural plan in England will boost homes in villages
Villages and towns in England’s rural communities will be allowed to build starter homes for local residents as part of new plans set out by the government. Under the country’s first ever Rural Productivity Plan the law will be amended to allow Starter Homes to be built on Rural Exception Sites for the first time. This will allow local areas to allocate more sites for Starter Homes specifically for people who already live in the area, or have an existing family or employment connection to the area. It is part of a wide ranging plant to boost productivity and ensure the countryside becomes an even more attractive place for people to live, work, start a business and bring up a family. The plan points out that while a lack of housing is currently a national challenge, in rural areas it is a particular constraint to labour and entrepreneurial mobility, adding that the stock of housing is limited in rural areas relative to demand and house prices are on average 6.7% higher in rural areas than in urban areas. Under the plan the government will increase the availability of housing in rural areas, whilst protecting the Green Belt and countryside. This will include a significant contribution to the 200,000 Starter Homes already announced to be offered at a 20% discount for first time buyers under the age of 40. ‘Through the right combination of measures, the government wants to ensure that any village in England has the freedom to expand in an incremental way, subject to local agreement,’ the report says. Alongside the review of planning the aim is to ensure local authorities put local plans in place for housing according to agreed deadlines and require them to plan proactively for the delivery of Starter Homes. The government will also bring forward proposals to speed up the process of implementing or amending a plan and make it easier for them to establish a neighbourhood plan and allocate land for new homes, including through the use of rural exception sites to deliver Starter Homes. There will be a review the current threshold for agricultural buildings to convert to residential buildings and the introduction of a dispute resolution mechanism for section 106 agreements, to speed up negotiations and allow housing starts to proceed more quickly. Chancellor of the Exchequer George Osborne said that the aim is to create the right conditions for rural communities and businesses to thrive and this means investing in education and skills, improving rural infrastructure, and allowing rural villages to thrive and grow. ‘We’re connecting the countryside to make it just as simple to run a business from Cornwall as it is in Camden. But it’s not just about transport and technology. Our plan will help us create thriving towns and villages where generations of families can open and expand their businesses, buy a home and educate their children at first class schools,’ said Environment Secretary Elizabeth Truss. Communities Secretary Greg Clark that… Continue reading
Average rents in England and Wales reach over £800 for first time
Average residential rents in England and Wales hit a record high above £800 for the first time in July with the fastest month on month increase since records began in 2009. Rents peaked in Yorkshire and the Humber, East and West Midlands, and London, according to the data from the latest buy to let index from Your Move and Reeds Rains. On a monthly basis, rents across England and Wales rose by 1.9% to £804 in July, up from £789 the previous month and up 6.8% year on year, the largest annual rise on record. ‘Just when you think the rental market is accelerating at full throttle, it finds a way to shift into a higher gear. We’re seeing rent rises manage to hit record breaking speeds on both monthly and yearly time frames as far back as our data can go,’ said Adrian Gill, director of estate agents Reeds Rains and Your Move, . He explained that with house prices rising and demand outstripping supply in the sales market the demand for rental properties has also begun to outstrip the available stock and this is driving up rents even faster than house prices. ‘A clear and concerted effort towards new-build properties is the most sensible way to address this issue. It boils down to supply and demand. However, it’s not the only possible response. The government could also ensure that we’re making the most efficient use of our small supply of homes, for instance by doing more to make it easier for people to downsize their properties when they want to,’ he added. A regional breakdown of the figures reveals that four of the 10 regions of England and Wales saw record rent peaks in July; London, Yorkshire and the Humber, and the East and West Midlands while every region saw increases compared to last year. Stronger than usual improvements in the West Midlands saw rents rise 3.6% over the 12 months to July 2015, bringing the average rent in the region up to £583. It’s a similar story in the East Midlands, with a 2.5% annual increase carrying rents up to £584. Yorkshire and the Humber, by comparison, edged its way to a new record with a 2% year on year increase to £582 on average. Rents grew 12% on an annual basis in the East of England, to stand at £838 in July. Though it’s second only to London with growth of 12.1%, in terms of the speed of the 12 month improvement, this is actually the first time in 15 months that the rate of year on year rent increases has not accelerated. Only two regions saw falling rents on a monthly basis with a 0.1% month on month drop in Wales and the East of England. Though rents are at a peak, Yorkshire and the Humber saw a modest 0.3% monthly increase. London took the lead with a 3.3% month on month rental increase…. Continue reading
UK commercial property market strong enough to withstand interest rate rise
There are few concerns about a rise in interest rates in the UK commercial property market which is regarded as being strong enough to take a base rate rise in its stride, according to a new report. The all property capital growth index rose by 0.7% in July month on month, which is down on the 0.9% reported for June, the latest market outlook report from real estate firm Knight Frank shows. Industrial saw the highest capital growth at 1.2% and retail the lowest at 0.2% while 12 month total return fell again to 16.2%. Investment volume from January to July was £38.4 billion, up from £30.1 billion for the same period of 2014. ‘Normally a rise in interest rates signals that the UK economy has moved into a period of excess, and the Bank of England has decided it is time to rein back inflationary pressures. So it is unusual to find widespread discussion on when interest rates will rise at a time when inflation is largely absent, and could stay that way for some time,’ said James Roberts chief economist at Knight Frank. ‘However, this rate increase is different. It is a sign the UK economy, like the US, is getting near to the day it can throw away the crutches of very low interest rates. Indeed, UK policymakers now want the safety net of higher rates. Should we hit another economic crisis, the Monetary Policy Committee (MPC) will thus have the option of cutting rates before resorting to printing money,’ he explained. ‘Parts of Europe presently have negative interest rates, and were some fresh disaster to unfold, they would have little choice other than to plunge further into the minus figures, or print money. All this increases the UK’s safe haven credentials. This probably explains why at present the commercial property industry seems to be so little concerned about the approach of higher interest rates,’ he pointed out. ‘When presenting to clients on the UK market one is more likely to be asked about the impact of the EU in/out referendum, or even the Chinese slowdown, than a rate rise. We live in a world of hedges and swaps which soften the impact of rate rises, and the Bank of England is giving lots of guidance to prevent firms and households from being wrong footed. So while the cost of debt will rise, most borrowers will be ready for the change,’ he added. Roberts explained that the Bank’s guidance is that rates will rise gradually over a long period, and there are very good reasons for this gradual strategy. ‘Financial institutions hold lots of Gilts, so big and sudden losses on bonds could reopen systemic uncertainties initially. Also, thinking back on those countries where rates are negative or nearly zero, if UK rates move too far ahead, then carry trade money will flood into British banks, with the risk of creating a future lending bubble,’ he said. ‘Moreover, the MPC’s… Continue reading
