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Research shows fewer homes being built on greenbelt in England
The number of new homes built within the greenbelt in England halves over the last 10 years after peaking in 2001, new research shows. Less than 100,000 have been built on these type of open spaces, which are meant to prevent urban sprawl into the countryside, since 1995, but most are in the area around London. The research from real estate firm Countrywide also shows that the 96,000 greenbelt land homes built in the last decade made up 3.5% of the 2.7 million homes built in England. However, demand for new homes and a shift in development southwards saw 48% of all greenbelt development occurring around London in 2014 while four areas, Blackpool, Gloucester, Burton and Morecambe, have seen no new house building at all since 2011. A breakdown of the figures shows that the number of new homes built on greenbelt each year has halved since the early 2000s, falling from a peak of 6,700 homes in 2001 to 3,248 in 2014. The trend started before the downturn too. Despite a 36% rise in the number of homes built in England between 2001 and 2007, the numbers built on greenbelt fell by 46%. Last year just 3,250 homes or 3% of all homes were built on greenbelt, down on 2013 and the long run average. Over the last five years development on greenbelt has increasingly been on land surrounding growing cities in southern England, which the firm says reflect the demand for housing and a wider trend of new home delivery concentrated in the South of England. In 2014 the 1,575 new homes built on London greenbelt, accounted for 48% of all greenbelt development in England, up from 38% a decade ago. London has also seen the most homes built on greenbelt since 1995 at 39,100. Local authorities can grant permission for development in the greenbelt in special circumstances where the benefit from development outweighs perceived harm to the greenbelt. While there is debate, and conflicting guidance about specifics, broadly these may include significant economic benefits, replacing buildings and in some instances housing or other social need. ‘While development is generally prohibited within the greenbelt a small number of homes are given permission to be built. Many of these development sites would be at odds with common perceptions of greenbelt. Rather than picturesque countryside being concreted over, these sites were either brownfield, infill schemes or unused land with little amenity value,’ said Johnny Morris, group research director at Countrywide. ‘Sustained pressure, particularly in the South, to get more homes built and government plans to take a tougher line on local authorities with out of date plans, will likely see more homes built on greenbelt in future years. Just returning to the rates of development on greenbelt seen in the early noughties would yield an extra 5,000 new homes a year,’ he explained. ‘Research by Countrywide published earlier in 2015 showed around the 80 railway stations in… Continue reading
First time buyers in UK need bigger deposits despite Help to Buy scheme
First time buyers in the UK need a £32,000 deposit to buy their first home as average deposits rise to their highest level in a year, new research shows. Despite Help to Buy providing those with small deposits access to high value LTV mortgages, lending is actually decreasing with the average deposit size up from a low of 16% in October last year to 20% or £31,807 now. The analysis found June’s average deposit of 20% to be the same figure as two years ago) before Help to Buy was introduced. Factoring in house price increases over the last two years also means that in monetary terms, the average deposit has risen by 9%, or £2,557, up from £29,250. The Genworth/Moneyfacts study also shows that current average deposit size is equal to 81% of an average first time buyer’s annual income of £39,065 highlighting the difficulty faced in saving such a substantial amount. Across all buyers, the average LTV for house purchase loans also dropped by 2%, from 77% in May to 75% in June. An average deposit of 25% is therefore required as access to high LTV lending impacts not only first time buyers but also those hoping to move up the property ladder. The research also shows that limited access to high LTV lending across all mortgages heightens the challenge for first time buyers in fulfilling their ambitions of home ownership. The study suggest that already a lack of housing supply is crippling the first time buyer market and making it harder for people hoping to move up the property ladder also means that typical first time buyer properties are not being freed up as often as they should. The price gap between 75% and 95% LTV mortgages has narrowed since the start of the year as a result of lower interest rates over the last few months. In January 2015 the price differential was 71% but has since fallen to 69%. However, this remains very high and means those who are unable to save for a larger deposit are faced with charges 69% higher than those who have access to a 25% deposit. On an average first time buyer property of £159,053, those with a 25% deposit pay a monthly fixed payment of just £500, compared to £846 for those with a 5% deposit, a difference of £346. Similarly, the fixed term cost for buyers with a 95% LTV mortgage is £20,307 and just £12,000 for those with a 75% LTV mortgage, a difference of £8,307 or 69%. The report says that as further evidence of the dominance of low LTV lending, the number of products available for those with larger deposits grew faster than the number of new high LTV products; the number of available products at 75% and 80% LTV rose by 280 and 200 respectively in the year to August… Continue reading
Court ruling means UK new home targets are more difficult, it is claimed
A land broker has warned that a recent High Court ruling lessens the likelihood of the UK ever hitting its house building targets. Following a legal challenge by Reading Borough Council and West Berkshire District Council, the ruling by Justice David Holgate forced ministers to scrap guidance which excluded developments of 10 homes or fewer from the requirement to provide or contribute to affordable housing provision. The Department for Communities and Local Government (DCLG) has said it will appeal the High Court’s ruling. However, according to Home Counties land broker Aston Mead it will lead to fewer homes being built as a result. ‘It has already stopped a stack of proposals in their tracks and a lot of sites in our pipeline are now being renegotiated,’ said Aston Mead director Adam Hesse. ‘Sites that may well have been suitable for 10 units will now be reduced to whatever the new threshold is, so full use won’t be made of the brownfield land available. Consequently it will mean less income for districts and boroughs, the very same organisations fighting for a change to the guidance in the first place. It’s utter madness,’ he added. He also pointed out that the contribution that small developers make to the house building programme should not be underestimated. ‘Small sites are the engine rooms of UK development. They are invariably built by small firms who have proportionately higher costs. The economic viability of their schemes is often on a knife-edge, with little ability to challenge local authority demands for affordable housing,’ said Mead. ‘This latest ruling now means that they will simply give up trying to build on certain sites, leading to fewer homes of all types. What’s more, small and little used commercial sites which could be more productively turned over to residential housing won’t even be attempted,’ he explained. ‘The country desperately needs more homes. It is already falling far short of current house building targets. A ruling like this is a significant blow for smaller residential developers and will only serve to ensure that those targets are even harder to meet,’ he concluded. Continue reading
