Tag Archives: london
Concerns over watering down of affordable housing commitments
Property experts are warning of an affordable housing time bomb in the UK which needs addressing to ensure enough homes are not only built but in the pipeline to cover future demand. It follows a recent case where a new appeal mechanism to remove the obligation of a developer to provide affordable housing was implemented and may open the flood gates for others to follow suit. Prior to the recession, many property developments were granted consent on the basis that, under section 106 agreements, a certain percentage of what was to be built would be earmarked for social housing. However, as the downturn began to bite, many developers found that the projects they were involved in were becoming increasingly unviable and sought to reduce the number of these properties and replace them with dwellings for private sale. Before 2008, local councils were able to stand their ground with regard to social and affordable housing requirements. But as the recession took hold and developers started to withdraw on their affordable housing commitments, councils were held over a barrel. It now seems that a new mechanism introduced through the Growth and Infrastructure Act 2013 is being used by developers to reduce their affordable housing commitments and follows a number of recent cases where the affordable housing requirements were reduced. This includes a development in Gloucestershire where the affordable housing commitment went from 20% on one site and 30% on a second site to 14.1% across the two. Another case in Exeter resulted in the affordable housing provision being reduced to zero. Angus Taylor from property consultants Bruton Knowles now believes that developers and councils need to work closely together before committing to a scheme so that a reasonable balance is struck between the provision of affordable housing stock while allowing developers to make any scheme viable and profitable. ‘Although we’re coming out of the recession, I believe there is going to be more cases where developers appeal on their affordable housing commitments. Coupled with a reduction in the number of affordable houses being built during the recession has made for a perfect storm in affordable housing provision,’ he said. ‘What’s key is that developers undertake stringent viability studies prior to the submission of any planning application. That way they know what the bottom line will be before any work is carried out,’ he explained. ‘Councils also have to be reasonable in their demands on what they’re asking developers to provide, otherwise nothing will get built leaving a shortfall of both private and affordable housing. What we don’t want is for this ruling to turn into a free for all where developers en masse appeal against their prior commitments,’ he added. Continue reading
UK buyers better off than renters after five years, new study has found
Buyers in the UK are better off than renters within five years on average as a result of equity outstripping the value of savings, new research has found. While home owners with mortgages pay £316 more on average per month compared to those renting equivalent properties, they become better off after a few years, according to the study from property website Zoopla. The research also shows that the average monthly rental across the UK currently stands at £865 per month versus an average monthly mortgage repayment of £1,181. But while renters may pay less each month, owners recoup their initial costs and become better off than renters within five years on average as a result of the value of equity outstripping the value of savings. And after seven years, the average owner is £13,850 better off compared to an equivalent tenant. Aberdeen, Dundee and Glasgow are currently the most cost effective towns for buying versus renting, as the average monthly mortgage repayment is less than the average rent. At the other end of the scale, Bournemouth, London and Huddersfield are the most cost-effective places for renters due to higher property prices relative to rents for equivalent properties. London owners pay nearly £1,790 more a month than the average renter in the capital. ‘People who invest in property are playing the long game. While buyers have to swallow the initial upfront costs of purchasing a property, they ultimately reap the benefits over renters down the line,’ said Lawrence Hall of Zoopla. He explained this is due to building up equity in an asset that they will own by the end of the mortgage term. ‘With the strong house price growth we’ve experienced this year and interest rates still low, saving for even a 10% deposit takes its time,’ he added. Continue reading
UK second steppers want a four bed detached home, new research has found
Detached houses are now the property of choice for home owners moving up from their first property, new research shows. In 2010, three bed semi-detached properties were the preferred next step but now they are increasingly looking to move to a bigger four bedroomed detached house, according to the latest report from Lloyds Bank. The research also shows that second steppers spend 19 months longer in their first home than they expected, 37% are increasing their savings and 41% are overpaying their mortgage to fund the £58,000 jump to their next home. In 2010 when three bed semi-detached properties were the preferred option some 60% said that they were looking to move to a semi-detached house, with 48% also saying detached properties would also be an option. Fast forward to 2014 and 54% of Second Steppers stated they would be looking to next move to a detached house, now the most preferred option, with semi-detached properties reducing to 51%. Three bed properties remain the preferred size of house in 2014 at 45%, although this has reduced by 10% since 2010 while four bed properties seeing a significant increase in this time. Some 31% now say they are looking for a four bed house, an increase of 7%. Second steppers are becoming increasingly prepared for their next move and taking their time to make the jump up to a family home. On average, they are spending 19 months longer in their first property than they expected as they continue to save and build up equity. Overall, the average second stepper spends four years and five months in their first home. Only 6% of these people intended on staying put for over six years, however in reality, some 36% have done this. The research also found that 37% have increased their monthly savings in the last year, and 41% are overpaying their mortgage. As a result, the proportion of people concerned about the size of deposit they require to move also fell in the last year, from 50% of second steppers in 2013, to 37% in 2014. This suggests that changing behaviours and increased levels of equity are allowing people to put more towards their next deposit and save for bigger homes. The findings also show that second steppers may be delaying having a family until they can move into a suitable property. Those moving as result of needing more room to start a family have reduced by nine percentage points in two years, to 22%, from 31% in 2012. Value for money remains a key driver for purchasing a property, with 46% of second steppers saying so. This is down 6% in the past year. Finding a nice area to live in is growing in importance and has seen the greatest year on year increase. In the past year, the number of respondents selecting this has risen by 6% to 38%. Both of these changes in the past 12 months suggest a more long term perspective for second steppers looking… Continue reading
