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Number of new affordable homes built in UK up 55% year on year
The latest figures show 66,640 new affordable homes were delivered in the UK in the last year, 55% more than the previous year and the fastest rate of growth since 1993. Communities Secretary Greg Clark said this was further proof of the government’s commitment to get more homes built. He announced that the number of social and affordable rented homes has increased by nearly two thirds, and the number of affordable homes to buy rose by 41% over the same time period. ‘We are far from complacent and the doubling of government investment in house building announced at the recent Spending Review reaffirms our commitment to deliver a million new homes by 2020,’ said Clark. He pointed out that affordable homes to rent and buy are a key part of that, helping to give young people and families across the country the best possible start in life. Housing Minister Brandon Lewis said it showed that house building efforts are paying off. ‘This is real progress but there is more to do. That’s why we are going further and increasing our investment in these homes to ensure many more people can benefit,’ he added. The figures mean that over 270,000 new affordable homes have been delivered since 2010. At the Spending Review last week, the government announced plans to double investment in house building to £8 billion, to help towards delivering one million homes by 2020 and to deliver the largest affordable housebuilding programme since the 1970s. This includes 135,000 new homes to buy through a new Help to Buy: Shared Ownership scheme, a new London Help to Buy, to help aspiring home owners in the capital to buy with a fraction of the deposit they would normally require and 200,000 new Starter Homes, which will be available at a 20% discount to young first time buyers. This is on top of measures included in the Housing and Planning Bill currently going through Parliament, including ensuring new Starter Homes are included on all reasonably sized development sites. The Bill will also mean giving communities the power to grant permission in principle on sites identified in local plans and on brownfield registers, to speed up the planning system while at the same time protecting the green belt and planning reforms to support small builders, with a requirement for councils to offer shovel ready sites for custom build homes. Continue reading
Continued uncertainty over tax still affecting prime central London property
Annual price growth in prime central London fell to 0.9% in November, against the background of prolonged uncertainty surrounding the impact of property tax, according to the latest analysis report. Annual growth was at its lowest level since October 2009, with a monthly decline of 0.3% contributing to the slowdown, says the report from international real estate firm Knight Frank. In the six months to October, when asking prices fell by 10% to 20%, exchanges took an average of 24 weeks but viewing levels in October were the third highest since the start of 2014, it also shows. It points out that the Autumn Statement from Chancellor George Osborne which announce that buy to let investors and those purchasing second homes face paying an extra 3% in stamp duty tax from next April came as tentative signs began to emerge that buyers and sellers are adjusting to previous stamp duty changes introduced in December 2014. ‘After a year under the new system, which raised rates for properties worth more than £1.1 million, a growing number of vendors have begun to set asking prices that reflect the more subdued level of demand and heightened sensitivity to pricing among buyers,’ said Tom Bill, head of London residential research at Knight Frank. He explained that Knight Frank sales data for the six months to October shows properties sold at an incrementally slower pace as the achieved price fell below the asking price. In instances where the achieved price was 80% to 90% of the asking price, where the asking price came down by between 10% and 20%, exchanges took an average of 24 weeks. This compared to nine weeks where the asking price and the achieved price are the same, that is to say where no reduction was necessary. ‘It demonstrates the strength of underlying demand, which is reflected in the fact viewing levels have increased in recent months. Viewings in October were at the third highest level since the start of 2014,’ Bill added. November also saw the release of Knight Frank’s global tax report, which showed London was in the middle of the pack compared to other major global cities in relation to prime property tax and holding costs. ‘The latest stamp duty changes appear unlikely to alter this position materially,’ said Bill. Continue reading
Property price growth in Australian capital cities continues to fall
Home price growth in Australian capital cities fell in November with the slowdown recorded the previous month in Sydney and Melbourne in particular continuing, according to the latest CoreLogic RP Data index. Over the month, Melbourne values fell by 3.5% while Sydney values were down 1.4%. Hobart dwelling values dropped by 2.4%, Darwin values were down 1.3% and down 0.5% in Canberra. Values rose in the remaining three capital cities, with Adelaide showing the highest month on month growth rate at 0.7%, followed by Brisbane with growth of 0.6% and Perth up 0.3%. Overall the combined capitals housing index has seen dwelling values drop by 1.5% over November, taking the rolling quarterly rate of change to -0.5%. Head of research Tim Lawless pointed out that the latest results are now placing downwards pressure on the annual change in dwelling values. The annual rate of growth across the combined capitals index peaked at 11.5% back in April 2014, and has since reduced to 8.7%. Sydney maintained the highest annual growth rate at 12.8%, which is down from a peak rate of annual growth of 18.4% in July earlier this year, while Melbourne’s annual growth rate has reduced from a recent peak of 14.2% to 11.8% over the 12 months ending November this year. The only capital cities where values have declined over the past year are Darwin with a fall of 4.2% and Perth with a fall of 4.1%, where weaker economic conditions and a slowdown in population growth contributed to an early peak in housing market conditions in December last year. The equivalent peak in the cycle for Darwin was May 2014. Since that time, Perth values are down a cumulative 5.9% and Darwin values have fallen by a larger 6.8%. ‘The fact that mortgage rates have risen independently of the cash rate has, in all likelihood, become a contributor to the slowdown in housing market conditions, as well as tighter lending practices evidenced by a recent reduction in lender risk appetite for investment loans and high loan to valuation ratio mortgages. Tighter mortgage servicing criteria across the board and affordability constraints in the Sydney and Melbourne markets are also having an impact on market demand,’ said Lawless. As a consequence of the tighter lending environment for investors, as well as gross rental yields being at near record lows, participation in the housing market from investors has reduced from 54.1% of all new mortgages in May 2015 to 45.4% at the end of September, which is the lowest level since July 2013. The 1.5% decline in capital city dwelling values over the month, coupled with a 0.3% rise in weekly rents, has seen the average gross yield record a subtle improvement over the month. This follows a trend towards lower rental yields which commenced in May 2013, Lawless pointed out. Gross yields remain close to record lows for houses in Melbourne at an average of 3% while Sydney has overtaken Melbourne… Continue reading
