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Latest data shows UK Help to Buy scheme has now helped over 73,000
The majority of sales under the UK government’s Help to Buy equity loan scheme continues to be to first time buyers representing 83% of total sales, the latest figures show. The data from the Department of Communities and Local Government (DCLG) also shows that the average (mean) purchase price was £211,566 in the first 20 months since the scheme was launched. The top six local authorities in terms of completed sales are Wiltshire with 664, Leeds at 628, Central Bedfordshire at 581, Milton Keynes at 516, Peterborough at 512, and Birmingham at 465. These figures firmly but to bed concerns that it would benefit people in London and the South East buy higher priced properties and also shows over 73,000 have benefitted. Figures also show that 30,269 households buying new and existing homes through the Help to Buy mortgage guarantee scheme and 5,518 households were supported into a new build home through the NewBuy scheme. The Help to Buy equity loan scheme was introduced along with other Help to Buy products to support people who can afford a mortgage, but struggle to save the deposits required by lenders in the wake of the financial crisis. ‘Our long term economic plan has turned this country around from the one we inherited, suffering from a crashed economy and a housing market where builders wouldn’t build, lenders wouldn’t lend and buyers couldn’t buy,’ said Housing and Planning Minister Brandon Lewis. ‘Now numbers of first time buyers are at their highest since 2007, house building continues to climb and planning permissions are at record levels. All these measures combined are helping record numbers of people into a new home, including 73,000 households benefiting from Help to Buy and we will keep striving to get that total even higher,’ he added. Continue reading
Private equity investment boosts commercial property market in Northern Ireland
The value of commercial property investment in Northern Ireland reached pre-economic crisis levels in 2014, according to a new report from Savills Northern Ireland. The emergence of private equity in the market resulted in approximately £500 million worth of commercial property deals completed by the end of the year, a 186% increase on 2013. Retail investment was to the fore accounting for 88% or £440.27 million of all deals and according to Savills, resilient jobs growth and positive momentum in occupational markets, particularly in the retail sector, has resulted in attractive returns for investors. Ben Turtle, a director of Savills Northern Ireland, expects this trend to continue in 2015. ‘One of the key drivers of investment activity has been rental growth and we expect both retail and office rents to increase this year,’ he said. ‘As a result, we see strong investor demand continuing into 2015 with £300 million of assets already scheduled for sale. This time last year that figure was £200 million,’ he added. Key investment deals which took place in 2014 included; The Obel, Donegall Quay, Belfast, Shane Retail Park, Belfast and Cityside Retail Park, Belfast. Savills NI transacted 78% of all investment deals in 2014. In the Belfast office market, Savills report that lettings in 2014 reached 348,500 square feet and were driven by improvements in the labour market, with private sector employment increasing by nearly 3.5% in the year to the third quarter of 2014. ‘This has resulted in a significant reduction in the availability of prime office space in Belfast and will result in continued rental increases this year. We estimate that approximately 500,000 square feet is currently required to meet occupational demand and it is expected that rents in the region of £183 per square meter will be agreed for deals in 2015,’ said Neal Morrison, a director of Savills Northern Ireland. The report also says that a strong economic backdrop has led to resurgence in retail activity with a number of new entrants coming into the market, according to Savills. Fashion and footwear and food and catering dominated take up of retail space in 2014, accounting for 61% of all deals in the year. ‘Renewed consumer confidence is now beginning to be reflected in the retail property market. While rents remain below peak levels and the supply of space exceeds demand, new entrants have started taking space in prime and secondary locations. With new arrivals across a variety of sectors, the broad based nature of the recovery is encouraging,’ explained Paul Wilson, a director of Savills Northern Ireland. Looking ahead, Savills say the rating revaluation in April 2015 could have a significant impact with a reduction in rates expected. For example, Donegall Place could experience a reduction of between 40% and 50%. Savills expect that the revaluation will put Belfast on a competitive footing with other UK regions. Limited supply of new housing development, in addition to strong demand, are expected to drive… Continue reading
Call for review of UK housing policy
The UK government needs to review its current housing policy and commit to a managed withdrawal of current property market support as a priority, according to the Intermediary Mortgage Lenders Association (IMLA). It has published its criteria for housing and mortgage policy pledges in the build-up to the 2015 election and says that with owner occupation set to fall from 64% to 59% in the next parliament, an ‘open and frank debate’ is needed about whether conservative lending benefits all. The IMLA argues that a clear overarching housing strategy is an essential requirement for the next government. This would replace a policy focus that has frequently favoured short term, eye catching and also conflicting measures over the last 30 years. As a result, successive governments have prioritised specific market segments at the expense of others rather than following a cohesive strategy across tenures and parliaments. In its paper UK Election 2015 – criteria for housing and mortgage policy pledges, IMLA also asserts that regulators’ response to the financial crisis and lenders’ responses to the new rules and their supervision have created a more conservative mortgage market. With owner-occupation set to fall from 64% to 59% over the next five years over the next parliament, the IMLA calls for the next government to ensure a more appropriate balance of choice and protection for consumers, in place of fragmented policies and regulatory interventions. The document sets out five specific requirements that should be tackled by the next government. These include establishing a programme for a properly managed withdrawal of government measures supporting the housing market and implementing a state or privately backed mortgage indemnity guarantee (MIG) to succeed Help to Buy and support high loan to value (LTV) borrowing in the long term. It also includes introducing measures to support downsizing by older households and increase liquidity in the housing market, carrying out a full review of the cumulative impact of regulatory changes for mortgage lending, including new capital adequacy requirements, macro-prudential rules and affordability assessments and engaging in an open discussion on the role of the sub-prime mortgage market in helping to meet consumer needs. ‘There are difficult and worsening housing problems across most of the UK, which mean the housing and mortgage markets will be a dominant issue in the 2015 election. A number of key agendas demand a response from politicians, and the consequences of their actions are likely to be felt for many generations to come,’ said Peter Williams, IMLA executive director. ‘We need to recognise that tenure patterns are changing and there is a wider diversity of housing needs in modern society than ever before. Home buyers face much greater challenges as a result of house price rises and financial services regulation. Private renters are confronted by high rental inflation and variable quality and social renting no longer provides an adequate safety net for those who cannot afford to house themselves via the market,’ he explained. He pointed out that a… Continue reading
