Tag Archives: news
Record number of homes with planning permission not yet built in England
A record 475,647 homes in England which have been given permission to be built have yet to be built, a new study has found, but says that the planning system is not to blame. Figures released by the Local Government Association from research carried out by industry experts Glenigan, shows this bumper backlog has grown at a rapid pace over the past few years. In 2012/2013 the total of unimplemented planning permissions was 381,390 and in 2013/2014 it was 443,265. The LGA said that the figures underline the need for councils to be able to invest in building more homes and also for the skills shortage affecting the construction industry to be addressed. Council leaders also want powers to charge developers full council tax for every unbuilt development from the point that the original planning permission expires. The LGA, which represents more than 370 councils in England and Wales, also revealed that developers are taking longer to complete work on site. It now takes 32 months, on average, from sites receiving planning permission to building work being completed, some12 months longer than in 2007/2008. The number of planning applications being granted planning permission in 2014/2015 was 212,468, up from 187,605 in 2007/2008 and is higher than all previous years and the data shows that councils still approve nine in every 10 applications. The research also points out that while the construction industry's forecasted annual recruitment need is up 54% from 2013, there are 10,000 fewer construction qualifications being awarded by colleges, apprenticeships and universities. Indeed, there were 58% fewer completed construction apprenticeships last year than in 2009. ‘These figures conclusively prove that the planning system is not a barrier to house building. In fact the opposite is true, councils are approving almost half a million more houses than are being built, and this gap is increasing,’ said Peter Box, LGA housing spokesman. ‘While private developers have a key role in solving our chronic housing shortage, they cannot build the 230,000 needed each year on their own. To tackle the new homes backlog and to get Britain building again, councils must have the power to invest in building new homes and to force developers to build homes more quickly,’ he explained. ‘Skills is the greatest barrier to building, not planning. If we are to see the homes desperately needed across the country built and jobs and apprenticeships created, councils must be given a leading role to tackle our growing construction skills shortage, which the industry says is one of the greatest barriers to building,’ he pointed out. ‘Devolving careers advice, post age 16 and adult skills budgets and powers to local areas would allow councils, schools, colleges and employers to work together to help unemployed residents and young people develop the vital skills to build. New homes are badly needed and councils want to get… Continue reading
Buy to let landlords in UK well placed to cope with an interest rate rise
Buy to let landlords in the UK are financially resilient and are well placed to cope with expected higher borrowing costs, according to a new survey. Asked how they would deal with a 1.5% rise in Bank rate, three quarters foresaw no problems in paying their mortgage, says the data from the YouGov survey. More than 60% said their rental income would remain higher than their mortgage payments, and 40% said they already had enough money to cover higher borrowing costs. Meanwhile, according to data from the Council of Mortgage Lenders (CML) lenders have increased the average rate at which they stress test buy to let mortgages and after a strong first quarter, the CML expects buy to let purchases to decline in 2016 but buy to let remortgaging to remain robust. According to the transactional data collected by the CML from lenders accounting for about 90% of new lending, the typical stressed mortgage rate being used by the industry has increased by 50 basis points to between 5.6% and 5.7% over the past year. According to Bob Pannell, CML chief economist, while this is still some way from the rates implied for lending to home owners, a more forced pace of adjustment would risk destabilising the buy to let sector. He also pointed out that landlords identify a range of strategies for coping with higher mortgage costs, including the positive cash flow that rental payments currently provide and ready access to contingency funds. But he also pointed out that a number of tax measures have been announced in recent months, and these are likely to have a dampening effect on future growth prospects for buy to let and the private rented sector. ‘The reduction of tax reliefs available to private landlords from 2017/2018 onwards, announced by the chancellor in the summer 2015 Budget, will adversely affect the future cash flows for affected landlords,’ said Pannell. ‘Landlords should be able to mitigate the direct financial impact in a number of ways. Indeed, the YouGov research corroborates our view that the overall impact will be to lift rents higher and to narrow the availability of homes in the private rented sector,’ he explained. ‘The direct effects appear modest, but are likely to be reinforced by the stamp duty changes, announced in the chancellor’s autumn statement. The rapid succession of recent tax changes also risks having a significant indirect effect on investor sentiment, altering the direction of travel for buy to let lending and the further expansion of the private rented sector,’ he added. The CML’s latest market forecasts envisage house purchase activity by buy to let landlords falling away over 2016 and 2017. Given the significant lags in government housing initiatives stimulating additional housing supply, this raises a question about the future availability of rental accommodation in the face of ongoing demographic pressures. ‘In this context, macro-prudential intervention, if or when it is applied to buy to let lending, carries a significant risk of unintended consequences… Continue reading
Home values in Australian capital cities flat, latest index data shows
Residential property values were flat in capital cities in Australia last month with Sydney, Canberra and Adelaide seeing price falls. The downturn in these cities were offset by values rising across the remaining five capital cities, according to the latest CoreLogic RP Data home value index. The Sydney housing market was the main drag on the December results, with dwelling values down 1.2%, while values were down 1.5% in Adelaide and 1.1% in Canberra. The remaining capitals saw a rise in dwelling values, led by a 2.3% rise in Perth values and a 1% rise in Melbourne over the month. After dwelling values had been broadly rising since June 2012, the December quarter results revealed a 1.4% fall in dwelling values across the combined capitals, the largest quarter on quarter fall since December 2011. Six of the eight capital cities recorded a negative result over the December quarter, with weaker conditions in Sydney and Melbourne acting as the greatest drag on capital city performance, according to CoreLogic RP Data head of research Tim Lawless. The largest quarterly fall was recorded in Sydney, where dwelling values were down 2.3% over the final three months of the year, followed by Melbourne, where dwelling values were 1.9% lower. The only capital cities to show a rise in dwelling values over the December quarter were Brisbane with growth of 1.3% and Adelaide up 0.6%. This was in contrast to the first three quarters of 2015, where capital city dwelling values rose by 9.3%, largely driven by a 14.1% surge in Sydney values and a 13.3% increase in Melbourne. In stark contrast, the final quarter of 2015 showed Sydney as the weakest performer of any capital city, with dwelling values down by 2.3% while Melbourne recorded the second weakest result with a fall of 1.9%. The complete 2015 calendar year results reveal a 7.8% increase in capital city dwelling values which is the lowest rate of capital gain over a calendar year since 2012 when values slipped 0.4% lower over the full year. Highlighting the diversity in the capital city housing markets, dwelling values fell across four of the eight capitals in the 2015 calendar year. The largest of these falls were recorded in Perth, down by 3.7%, and Darwin down by 3.6%. Hobart and Adelaide also showed subtle falls of 0.7% and 0.1%. Despite the recent weakening of housing market conditions in Sydney and Melbourne, the two largest capital city housing markets still recorded much stronger annual gains than all other capital cities, 11.5% in Sydney and 11.2% in Melbourne. Dwelling values in Brisbane and Canberra were up a more sustainable 4.1% over the year. ‘The wealth created from housing in Sydney and Melbourne has been exceptional over the past 12 months. In dollar terms, Sydney home owners have seen approximately $82,000 added to their wealth thanks to the strong capital gains over the year while home owners in Melbourne have seen the value of… Continue reading
