Tag Archives: real estate
Review of UK housing and planning policies widely welcomed
Changes need to be made to housing and planning policies in the UK to ensure enough new homes are being built, according to a property market review. The Lyons Housing Review, commissioned by the Labour party, identifies the changes which need to be made to increase the number of new homes to 200,000 a year. It says there must be new powers for local communities to build homes in places people want to live, that councils must produce a home building plan and allocate sufficient land for development and first time buyers should get priority access to new homes. The review says local communities should have the power to build the homes in places people want to live. Councils will be able to designate ‘housing growth areas’ and will have powers to assemble land and give certainty that building will take place. They will also ensure on larger developments the planning gain that results will in part be used to invest in the schools, roads, green spaces and GP surgeries that make developments possible. It also says councils should be compelled to produce a home building plan and allocate sufficient land for development. Labour says if it wins the general election next year it will make it mandatory for local authorities to produce a local plan to meet the housing needs of the community. If they do not allocate sufficient land or present a plan, the planning inspectorate will have powers to step-in to ensure the housing need is not ignored. The third main recommendation is that first time buyers from an area should get priority access to new homes. Councils would be given the power to reserve a proportion of homes built in ‘housing growth areas’ for first time buyers from the area for a period of two months. In addition, local authorities will be able to restrict the sale of homes in these areas so they cannot be sold for buy to let or buy to leave empty properties. The changes identified have been widely welcomed. According to Susan Emmett, residential research director of Savills the recommendations should help boost housing numbers regardless of who is in government next year. ‘The report clearly recognises the need for a long term, more strategic approach to planning for homes, integrating housing with infrastructure and increasing the number of players operating in the market,’ she said. ‘While we expect that large house builders will continue to provide the bulk of new homes, Lyons’ recommendations for supporting smaller builders and helping Local Authorities to build more is crucial if we are to increase overall housing numbers,’ she explained. ‘We also welcome the report’s recognition that we need to be delivering homes across all tenures including homes for rent. We expect to see the number of people renting continue to grow and supporting institutional investors to build to rent is essential to provide the good quality homes needed,’ she added. The British… Continue reading
Chennai residential market proves to be the most resilient in India
The Chennai residential market is one of the steadiest in India and has proved its resilience just after the global economic downturn which was one of the toughest periods for the country’s property market. Between 2008 and 2009 it remained relatively stable in terms of sales volume and price, compared to cities like Mumbai, NCR, Bengaluru and Hyderabad, according to a new analysis from international real estate firm Knight Frank. It explains that new infrastructure projects begun during the second half of 2014 including the building of the Outer Ring Road (ORR) and the Chennai Metro Rail, will lead to the emergence of new residential property growth corridors like Kuthambakkam, Chembarambakkam and Poonamallee along the ORR, and Vadapalani, Ashok Nagar and Alandur along the metro rail link. However, residential development is nonexistent in North Chennai, primarily due to the unavailability of vacant land, narrow arterial roads and lack of employment opportunities. This has compelled developers to look for opportunities in the South and West Chennai markets. According to Hitendra Gupta, a research consultant from Knight Frank India, the emergence of West Chennai as one of the more successful residential micro markets is as a result of affordable pricing, its proximity to the city centre, the presence of employment hubs and a relatively better developed social infrastructure. South Chennai, comprising OMR and GST Road, has been highlighted as the current growth corridor of the city. Its proximity to Chennai International Airport, the presence of arterial roads and the availability of huge vacant land parcels have enabled it to grow rapidly into an emerging residential hub. Gupta points out that the IT and ITeS sectors, the dominant employer in this region, has a positive outlook for business in 2015. This along with a change in economic sentiment, as well as the stable government at the centre, bodes well for new launches and absorption is set to increase by 31% and 14% in West and South Chennai respectively in the second half of 2014. The weighted average price in the Chennai market is forecasted to increase by 3% for 2014 against a 5% increase witnessed in the first half of 2014, the report concludes. Continue reading
All regions of the UK see a year on year rise in residential rents
Rents in the UK have continued to increase steadily throughout the year with the average rent in the third quarter of 2014 reaching £903 per calendar month, according to the latest index. This is an increase of £21 per calendar month, up from £882 per calendar month in the second quarter of 2014, the data from Countrywide Residential Lettings shows. In September, the average UK rent increased to its highest level for 32 months to £916 per calendar month, a growth of 5.2% year on year. All regions saw a year on year increase in rents apart from the Midlands, which saw no increase in the third quarter of 2014 while Greater London saw the greatest increase, up 9.8% on the third quarter of 2013, followed by the East of England which saw an increase of 7.3%. The data also shows that arrears have remained relatively stable with many regions seeing a decrease and some seeing less than a 1% increase. In terms of the size of properties, all properties saw an increase in rent quarter on quarter and year on year. Four bedroom plus properties saw the greatest increase in rent year on year, up 5.8% to £1,524 per calendar month, followed by three bedroom properties up 4.8% to £956 per calendar month. Two bedroom properties saw the smallest growth in rent, up 4.1% to £822 per calendar month. Meanwhile, Countrywide says that the Bank of England’s request for extra powers, in order to direct lenders as to how much buy to let investors are able to borrow, could mean that landlords in the South East and London will have to find a 40% deposit in order to secure mortgage finance. According to an analysis by the firm the powers, if granted, will allow the Financial Policy Committee to ask lenders to stress test how much new landlords can borrow and ensure that the income landlords receive is greater than the interest payments on their mortgages. Lending on investment property is typically secured against the rental income a landlord can generate. For most lenders, landlords are assessed on whether the rent generated from the investment property will cover 125% of the interest component of the mortgage. This gives both the lender a degree of security against interest rate rises and takes into account the money a landlord will reinvest back into the property for general maintenance and improvements. At present, the interest rate against which the borrower’s ability to meet repayments is at the discretion of the lender. Over the past two years, this rate has typically been around 5%, translating into 1.2% above the 3.8% rate at which the average landlord secures their loan. For the average landlord who has purchased during 2014, the rental income from the property covered 205% of the mortgage interest, well inside the 125% limit. Tested against an interest rate of 5%, generally the rate which lenders currently use to test affordability means the rent will cover 165% of the mortgage… Continue reading
