Tag Archives: london
Rent controls would not work in UK, research suggests
Rent controls and similar policies which are thought to work well in other countries cannot be easily replicated in the UK’s private rented sector, according to findings from a new interim report. The interim report by the London School of Economics and Political Science (LSE) and commissioned by the National Landlords Association (NLA) looks at evidence from the UK as well as from other countries where stronger regulatory policies are already in place, including Germany, Ireland, San Francisco, New York and the Netherlands. It suggests that in Ireland, which apparently provided the model for the Labour Party’s proposals in the run up to last month’s UK general election, controls introduced in the last few years have had very limited effect. The country is experiencing a housing crisis, with rapidly rising rents and a near standstill in new housing production. In Germany, often cited as the best example of a country with a stable private rental sector, the system of indefinite security and in-tenancy rent stabilisation has in the past been cushioned by low house prices and demand. Moreover, initial rents can be well above current market levels in high-demand areas. It also says that in San Francisco and New York the main beneficiaries are older middle class households and the young hardly get a look in. ‘The report is required reading for those such as the Labour leadership and London Mayor hopefuls, who seem to be ignoring both academic evidence and the overwhelming rejection of similar policies by the electorate last month,’ said Carolyn Uphill, chairman of the NLA. ‘Private rented sectors in many countries, regulated or not, are facing major problems in high demand areas. Market fundamentals cannot just be regulated away,’ she added Kath Scanlon of LSE London said the research found clear evidence that inflexible controls reduce supply. ‘But the strongest message was that what may work in one country cannot simply be transferred to a different market and institutional environment,’ she added. During the election there were also calls to abolish business tax relief for buy to let, alongside the introduction of rent controls. However, the LSE report found that where rent controls are already in place the negative impacts are usually offset by a more favourable tax treatment of landlords, an area which the UK falls behind in comparison with other countries. ‘The taxation of buy to let is a touchy subject for some, even though landlords in the UK receive no special treatment compared to other businesses. This report reinforces why successive governments have chosen to treat landlords as businesses. Doing so encourages best practice and, above all, helps to ease the housing crisis,’ Uphill concluded. The full details of the report are due to be published later this year and will include more detail on London. Continue reading
A short commute and sports facilities nearby are what UK buyers want, research suggests
Location is still important for home buyers in the UK with new research suggesting that a short commute to work and having access to sports facilities, green space, bars and restaurants are increasingly important. The research has also found that home buyers would pay a premium for peace of mind, stumping up £7,000 to move to a safer neighbourhood along with an extra £5,900 for living alongside nicer neighbours. And the home itself is becoming less important, with decreases in those valuing having more space, a garage or parking space, a south facing garden or private outdoor area, according to the survey from Santander Mortgages. Cutting the daily commute is the most important factor for home buyers, with 33% looking to buy a home citing closeness to work as essential and 28% naming proximity to public transport as a key factor, more than any other categories. House hunters are increasingly looking to maximise their free time by buying properties near leisure facilities, with increases in the number of those naming proximity to bars and restaurants since the research was last conducted in 2011 at 8%, up from 6%. Those wanting sports facilities increased from 2% to 5%. In contrast, features inside the home are becoming less important to prospective home buyers, with decreases in those valuing more space down from 29% to 27%. Having a garage or parking was down from 18% to 15%, a south facing garden fell from 18% to 12% and a private outdoor area from 14% to 11%. Those seeking to buy are also shunning their nearest and dearest in favour of increasing the quantity and quality of their leisure time, with closeness to family and friends both seeing decreases in the percentage of home buyers who see them as essential. While moving into an area with strong broadband signal has increased in importance over the past four years, it is still only an essential factor for 10% of home movers. ‘We are becoming a recreation nation as we look to minimise the amount of time we spend travelling to and from work, and maximise the time we can spend enjoying ourselves playing sports, enjoying green spaces and socialising in bars and restaurants,’ said Miguel Sard, managing director of mortgages for Santander UK. The findings also reveal 26% are looking to buy a new home in the next five years. On average they would pay £6,297 extra to live closer to work. The average buyer would pay over £6,900 to move to a safer neighbourhood, a 4% premium on the average UK house price. This compares to around £6,400 to be close to shops, £5,900 for nicer neighbours and over £6,300 to have eco-features such as solar panels, nearly twice what they would have paid four years ago. Continue reading
UK flagship Help to Buy reaches 131 new home owners a day
The UK government’s flagship Help to Buy schemes have created 131 new home owners every day since April 2013, according to the latest figures to be released. Housing Minister Brandon Lewis said that the data shows Help to Buy is an important part of the government’s efforts to ensure anyone that works hard and aspires to own their own home has the opportunity to do so. Since the launch of the schemes, over 100,000 people have used the Help to Buy equity loan, mortgage guarantee and NewBuy schemes at a fraction of the deposit they would normally require. The data also shows that four out of the five of these were first time buyers and 94% of the sales were outside of London, alleviating concerns expressed at the launch of the schemes that they would not reach out to the most needy. Launched in 2013, the Help to Buy: equity loan and Help to Buy: mortgage guarantee schemes were set up to support people who could pay a mortgage, but struggle to save the deposits required by lenders following the financial crisis. The Help to Buy: NewBuy scheme offers 95% mortgages for those buying new build homes and the number of new home owners has reached 101,972. Overall since 2010, over 225,000 households have been helped to buy and reserve a new home through government-backed schemes. ‘The figures clearly show the continuing success of the Help to Buy scheme in supporting many credit worthy, hardworking people who want to buy their own home. Our long term economic plan has turned this country around from the one we inherited, now numbers of first time buyers are at their highest since 2007, house building continues to climb and over 225,000 households have been helped to buy or reserve property since 2010 through government backed schemes,’ said Lewis. According to Stewart Baseley, executive chairman of the Home Builders Federation, Help to Buy continues to drive demand for new homes, and its extension to 2020 is a huge boost. ‘That demand is being met by the house building industry which is increasing output at the highest rate for decades,’ he said. ‘With this support for buyers in place, house builders are planning greater investment in land, labour and supply chains to maintain and sustain this increased level of activity. Delivering more, high quality houses will provide the next generation with decent homes, create jobs and boost local economies across the country,’ he added. The data also shows that the average price of homes under the scheme is £213,954, well below the £271,000 UK average. The scheme has also brought down the average deposit needed. Some of the main towns and cities benefiting from the Help to Buy schemes include Leeds with 1,477 sales, Birmingham with 1,301 sales, Wiltshire with 1,242 sales, County Durham with 1,169 sales and Bedfordshire with 1,128 sales. The government has already announced the extension of the Help to Buy: Equity Loan scheme to 2020, to help… Continue reading
