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Buy to let lending grew in 2015 at expense of first time buyers
The rapid growth of the buy to let market in the UK during 2015 was at the expense of first time buyers despite Government initiatives to encourage home ownership, new research has found. The proportion of buy to let mortgage enquiries grew by 4.4% to 18.2% during 2015 compared with 2014, whereas the proportion of enquiries for first time buyers fell by 3.7% to 23.5%. According to price comparison website comparethemarket.com the inverse correlation indicates that the buy to let market has gained a chokehold over first time buyers, as many struggle to get out of rented accommodation and on to the housing ladder. January showed no signs of a reducing market, as the first month in 2016 showed year on year growth of over 16% and 62% increase compared to December, reinforcing the sentiment that the current buy to let market may be unsustainable. Evidence indicates that if the market continues in its current direction, the number of enquiries for buy to let mortgages will outstrip the number for first time buyer enquiries, which would be a blow to the Government’s home ownership drive. Overall the buy to let market saw growth during of over 23% in enquiries on the website in 2015 and the initial cut on tax relief also did little to reduce the swelling of the buy to let market as enquiries rose by 14% in the three months after the announcement made by the Chancellor at the Summer Budget, compared to the three months before. However, with the new stamp duty on buy-to-let properties, announced at the Autumn Statement, coming into effect this spring, many expect the market will finally dampen. Elsewhere, January proved to be a particularly buoyant month for the mortgage market as the number of enquiries rose by more than 8% compared to 2015. It seems that January is the time that consumers get their respective houses in order with a recent study by comparethemarket.com finding that 44% of consumers used the month to ‘sort out’ their finances. ‘The buy to let market has been subject to both extensive discussion and criticism over the past year with even the Bank of England’s Financial Policy Committee labelling it a risk to the UK’s financial stability,’ said Jody Baker, head of money for comparethemarket. ‘This data only reinforces the view that over the past year, families and others looking to get a foot on the housing ladder are being priced out by landlords. It was great to see the Government take action in the Autumn Statement but time will tell as to what the material impact will be on the market after 01 April,’ Baker added. Continue reading
Home sales in Canada up 0.8% in first weeks of 2016
National home sales in Canada rose by 0.8% from January to February while average prices were up by 16.4% year on year, the latest index shows. But prices fell in some regions, most notably British Columbia and Ontario with a fall of 1.4%, according to the data from the Canadian Real Estate Association also shows. The number of newly listed homes edged up by 0.5% from January to February and the CREA report says that the Canadian housing market has tightened but remains balanced overall. The monthly increase lifted national sales activity to the highest level since June 2007 but a greater number of local housing markets posted a monthly decline in sales activity than posted a monthly increase. However, the latter accounted for a larger share of national transactions. The Greater Toronto Area (GTA), Okanagan Region and Fraser Valley made the largest contribution to the monthly increase in national sales activity, offsetting monthly sales declines in Edmonton, Greater Moncton and Montreal. ‘Two of Canada’s hottest housing markets look set to stay that way heading into the spring home buying season. Meanwhile, other major urban markets elsewhere in Canada are well balanced or have ample supply,’ said CREA president Pauline Aunger. Actual, not seasonally adjusted, sales activity rose 18.7% year on year in February, some 12.7% above the 10 year average for the month. Activity increased above year ago levels in about three quarters of all local markets. BC’s Lower Mainland, the GTA and Montreal contributed most to the year on year increase in national activity. Gregory Klump, CREA chief economist pointed out that the number of single family home sales above one million dollars is rising in Greater Vancouver and the GTA. ‘Tightened mortgage regulations apply to homes selling above $500,000 and below a million dollars. The tighter regulations combined with a short supply of single family homes will restrain transactions below one million dollars,’ he explained. ‘If recent trends continue, home sales above one million dollars will account for a greater share of activity and will further fuel year on year average price increases in these markets. Meanwhile, price growth will remain more modest in other housing markets that don’t have an ongoing or developing supply shortage like the kind we’re seeing in the Lower Mainland of British Columbia or around the GTA,’ Klump added. The number of newly listed homes edged up 0.5% in February 2016 compared to January. The rise in new listings in the Lower Mainland of British Columbia, York and Mississauga Regions of the GTA and Hamilton-Burlington helped to push the national figure higher. Monthly increases in new listings in these housing markets were offset by monthly declines in Central Toronto, Calgary and Montreal. The national sales to new listings ratio rose to 59.5% in February 2016 versus 59.3% the previous month. This marks the ratio’s highest reading since November 2009. A sales to new listings ratio between 40% and 60% is generally consistent with balanced housing market… Continue reading
Pilot programme underway in UK for new homes on derelict and underused land
Pioneering councils are to help lead the way in bringing forward derelict and underused land for new homes in the UK, it has been announced. Some 73 councils across England will pilot one of the new brownfield registers, which will provide house builders with up to date and publicly available information on all brownfield sites available for housing locally. According to Communities Secretary Greg Clark the registers will help house builders identify suitable sites quickly, speeding up the construction of new homes and they will also allow communities to draw attention to local sites for listing, including in some cases derelict buildings and eyesores that are primed for redevelopment and that could attract investment to the area. The government has pledged one million more homes and to get planning permission in place on 90% of suitable brownfield sites for housing. This move ramps up the brownfield land building commitment. ‘A key part of our ambition to build a million homes is to get work started on brownfield sites across the country, many of which are currently nothing more than blight on a community’s landscape,’ said Clark. ‘These councils will be at the forefront of these efforts to list land and encourage builders to deliver new homes for aspiring home owners. But this is just the first step and I would urge councils to continue to offer up brownfield sites to deliver the homes their residents want and need,’ he added. Housing Minister Brandon Lewis explained that the councils taking part in the brownfield pilots will inform future government policy and guidance on the operation of the brownfield registers. ‘Registers will eventually become mandatory for all councils under proposals going through Parliament in the Housing and Planning Bill,’ he said, adding that other measures in the Housing and Planning Bill will enable ‘permission in principle’ to be granted for housing led development sites listed on the new brownfield registers. ‘This will mean developers building new homes on brownfield land will have a greater degree of certainty in relation to location, use and the amount of development,’ he explained. Each council agreeing to be part of the pilot project will receive £10,000 government funding to help the establishment of their brownfield registers. The 15 councils with the most brownfield land taking part in the brownfield register pilot project are: Cherwell, County Durham, Huntingdonshire, Leeds, Liverpool, Manchester, Medway, Newcastle upon Tyne, Peterborough, Selby, Sheffield, South Cambridgeshire, Sunderland, Tonbridge and Malling and Wigan. These have the most brownfield land in England, as identified in the final complete publication of National Land Use Database statistics. A further 36 areas made up of 58 councils (some bids are joint) were selected on a competitive basis. Continue reading
