Tag Archives: london
UK government criticised for having a short term approach to new home building
The wave of new home building in the UK could harm the longer term housing market as sustainability, design, quality and planning risk being pushed aside in the rush to build new properties, it is claimed. A new report from the House of Lords Built Environment Select Committee Report outlines concerns that the short term approach to building new homes is being carried out at the expense of long term considerations, and criticises the removal of initiatives such as zero carbon homes. It points out that the planning, design, management and maintenance of the built environment has a long term impact upon people and communities and that policy towards the built environment in England should not be the sole preserve of any one Government department. ‘There is an urgent need to co-ordinate and reconcile policy across numerous different areas and priorities. Recently, however, one priority has become dominant in debates concerning built environment policy. Increasing the overall supply of housing, and the speed at which housing is delivered, is a central part of the Government’s policy agenda,’ the report says. ‘When seen in the context of the housing crisis facing many communities across England, this is understandable and, overall, we welcome the Government focus on increasing and speeding up the supply of housing,’ it explains. ‘Restrictions on financial freedoms and flexibilities, however, pose a threat to the ability of local authorities to build houses of their own. The private sector, throughout the post-war period, has very rarely achieved the delivery of 200,000 homes a year. We do not believe the Government can deliver the step change required for housing supply without taking measures to allow local authorities and housing associations each to play their full part in delivering new homes,’ it adds. The report also says that Government initiatives have so far failed to address a further part of the house building problem, which is the gap between planning permissions granted and new homes built. ‘We recommend measures intended to address this, and other, barriers to increasing the number of housing completions. More fundamentally, however, we are concerned that the overall emphasis on speed and quantity of housing supply appears to threaten place making itself, along with sustainable planning for the long-term and the delivery of high quality and design standards,’ the report says. ‘The Government is pursuing a deregulatory agenda as seen, for example, in the introduction of more flexible arrangements for office to residential conversions and the strong policy emphasis placed on the financial viability of new developments. These… Continue reading
Residential rents in England and Wales up 3.6% year on year
Rents in England and Wales increased by 3.6% year on year in January with the East Midlands and the East of England lead rental growth, up 5.9% and 5.8%. This means that rents re growing quicker in these two regions in London and landlords overall have seen total annual returns reach 12% or £21,988 in absolute terms since November 2014. The data from the buy to let index from Your Move and Reeds Rains also shows that the average rent is now £790 per month and the proportion of late rent fell in January to 8.2% compared to 9.3% in December 2015. In London rents rose by 5.7% on an annual basis, marginally slower than 6.3% recorded in December. At the other end of the spectrum rents are lower than a year ago in the South East and North East regions, both seeing a 1% annual fall. Meanwhile the slowest annual rent rises are in Wales, up just 0.6% since January 2015. Six out of 10 regions have witnessed monthly falls in rents, in line with the overall month on month trend across England and Wales. This is led by London, with rents in the capital 0.7% lower than in December. Taking into account both rental income and capital growth, the average landlord in England and Wales has seen total returns of 12% over the 12 months to January, up from 11.2% in the 12 months to December, a 14 month record since total returns stood at 12.3% in the year to November 2014. In absolute terms this means that the average landlord in England and Wales has seen a return of £21,988 over the last 12 months, before any deductions such as property maintenance and mortgage payments. Of this, the average capital gain contributed £13,594 while rental income made up £8,394 over the 12 months to January. Rental yields have so far proved resilient in the face of price rises, the report also shows. The gross yield on a typical rental property in England and Wales, before taking into account factors such as void periods, is steady at 4.9% in January, the same as in December 2015. On an annual basis, this is fractionally lower than the 5% gross yield seen a year ago in January 2015. ‘Buy to let returns are building and property prices are picking up as the housing shortage across the UK intensifies. Landlords’ balance sheets are looking healthier than at any point since 2014, and property investors are looking at an excellent rate of return from their portfolios,’ said Adrian Gill, director of estate agents Reeds Rains and Your Move. ‘With house prices rising rapidly into the New Year, this acceleration will be a welcome addition to the wealth of landlords on paper, while solid rental yields are underpinning total returns pushing well into the double digits,’ he added. He believes that the current fuss over the… Continue reading
Buying is cheaper than renting across most of the UK, new research shows
People looking for their first home in the UK are better off buying than renting with the gap more than doubling over the last five years, new research shows. Indeed, first time buyers are on average £865 or 10% a year better off with their own home compared to those who rent, according to the research by Lloyds Bank. The South East of England is the only region where renting is the cheaper option with average monthly buying costs at £965, some £65 higher than average monthly rental costs of £900. The calculations show that the average monthly buying cost, including mortgage payments, associated with a first time buyer purchasing a three bedroom house stood at £672 in December 2015, some £72 or 10% lower than the typical monthly rent of £744 paid on the same property type. This represents an increase of £105 over the past year compared with the annual saving associated with buying a home instead of renting of £760 in 2014. The difference has grown as average monthly rents have increased more steeply by £24 or 3% compared to a £15 or 2% increase in monthly buying costs. The current financial gap between buying and renting of £865 is more than double the annual saving of £397 in 2010. Over this period, the average rent has grown by 23% or £139 a month from £605 whilst average buying costs have increased by 17% or £100 a month from £572. The research report says that buying has consistently been the cheaper option since 2009, when the average monthly payment was £561 for renting compared with £575 for buying. While buying is more expensive in the South East, the data shows that buying is most affordable compared to renting in cash terms in the North West, where the typical first time buyer is paying £133 a month less than the average renter at £525 against £658. The next most affordable is Scotland where a buyer pays £525 against £645, a saving of £120, and then Wales at £471 against £574, a saving of £103. The number of first-time buyers is estimated to have totalled 310,000 in 2015, largely unchanged from 311,700 in 2014. This represents an increase of 60% since the number of first time buyers fell to a recent low of 193,700 in 2011. The number of first time buyers accounted for 46% of all house purchases made with a mortgage in 2015. This share has grown from 36% at the start of the housing downturn in 2007. ‘We’ve seen a significant shift over the past five years, with people consistently paying less on average per month when owning their property as opposed to renting. In 2015 this gap widened by over £100 to an annual saving of £865,’ said Mike Songer, mortgage director at Lloyds Bank. ‘This has been helped by record low mortgage rates and rising private rents, making owning a home a much more attractive proposition than renting,’… Continue reading
