Tag Archives: real estate
London housing bank being created
The Mayor of London has announced what is described as an innovative new £200 million investment scheme for developers and housing associations that will help accelerate the building of thousands more low cost homes in the city. He said that the London Housing Bank will offer tailored financial support to speed up the construction of homes compared to existing development timetables. This could include building later parts of large multi-phased housing schemes earlier than scheduled. The Bank offers low cost loans starting at 1% interest to incentivise development partners to build up to 4,000 homes on a range of sites, with the condition that these homes will be rented to Londoners at low cost rent with a minimum discount to market of 20 % for at least 7seven years. Boris Johnson said that this will result in homes being delivered several years earlier than traditional house building plans allow. The loan will be available for up to 16 years and after it is repaid, developers will have the option of selling the homes to the current occupiers to support home ownership, selling into the market, or retaining as affordable homes to use as long-term rent. The London Housing Bank prospectus is being launched at the same time as the Government launches a national investment scheme for developers to boost house building, with the initial funding for the Housing Bank being made available to the Greater London Authority by the Government. The Mayor's commitment to fast tracking development with the Housing Bank is part of a package of wider measures he is promoting to stimulate house building. He is on track to see 100,000 low cost homes built over his two terms, with more affordable homes being built this year than since 1980, as well as helping 50,000 Londoners into low cost home ownership and introducing a range of innovative new measures including new Housing Zones and accelerating purpose built rental sites. ‘Through the pioneering London Housing Bank, I'm challenging the capital's developers to get building, and deliver the homes Londoners need, as fast as humanly possible. Loans are available from a £200 million pot to significantly accelerate the pace of development, especially on bigger schemes, and unlock additional supply,’ Johnson explained. ‘Through this exciting new fund we hope to provide thousands of brand new homes many years sooner than would otherwise be possible for hard working Londoners,’ he added. All homes will be advertised on the FIRST STEPS online portal, the Mayor's programme to help low and modest income Londoners to buy or rent in the capital at a price they can afford. A wide range of new and existing housing providers are encouraged to bid for loans as well as private sector organisations including private registered providers and developers. Bidding will be through the Greater London Authority's Investment Management System (IMS). The majority of funding is expected to be low cost interest bearing loans, with equity… Continue reading
Americans more confident about the nation’s housing market, new research shows
Overall Americans are more confident about the housing market than at the start of the year, according to the latest Zillow Housing Confidence Index. The index increased to 64.2 over the summer, up from 63.7 in January, and housing confidence increased among residents in 11 of the 20 major metro areas surveyed. The ZHCI, sponsored by Zillow and developed by Pulsenomics, is measured on a 0 to 100 scale, with readings above 50 indicating positive sentiment. The headline index is comprised of sub-indices which measure prevailing market trends and buying/selling conditions, expected changes in home values, home affordability, the value of home ownership and, household home buying plans and attitudes toward the social value of home ownership. But the analysis also reveals that consumers’ expectation is for more modest home value growth going forward are this is in line with Zillow's predictions for slower home value growth over the next year. The Zillow Home Value Forecast, which predicts home value growth of 3.1% through next August, is down from 6.6% over the past year. The report also shows that overall, housing confidence is higher among home owners than renters, likely owing to historically high rents and favourable home buying conditions. An analysis of data within the 10,000 completed survey questionnaires used to calculate the ZHCI reveals that younger renters are upbeat about their future home buying prospects. Among renters aged 18 to 34 some 82% said they were confident or somewhat confident that they will be able to afford to own a home someday, compared to 64% of those aged 35 to 49 and 48% of those aged 50 to 64. Then younger age group were also far more optimistic about future home value appreciation with 33% saying that they expected home values to rise more than 6% per year over the next decade, compared to 21% of the middle age group and 15% of the older age group. ‘It's heartening to see younger renters express so much confidence in their ability to buy a home in coming years, because today's renters by necessity are tomorrow's buyers,’ said Zillow chief economist Stan Humphries. ‘Cynics might argue that these results represent no more than youthful exuberance, or perhaps some naiveté, but that's missing the point. We need this generation to be confident and wanting to buy, regardless of the difficulties they face,’ he explained. ‘And there are difficulties, including saving for down payments in the face of high rents and high student debt burdens, uncertain job prospects among younger workers and limited entry-level home inventory. But optimism is a necessary first step, and indicates a desire among a very creative generation to find creative solutions that will enable them to achieve home ownership,’ he added. The report suggests that in some respects, younger potential buyer’ views toward housing may be more conventional than older generations. Some 65% said they agreed with the statement that owning a home is necessary to living a good life and is central to the American dream, compared… Continue reading
Research shows UK mortgage holders think they will struggle with interest rises
One in five mortgage holders in the UK have said they would really struggle to find the extra money to cover any increase in repayments, new research has found. Nearly half would find it difficult to cover up to £150 extra per month and over a quarter don’t know what their current mortgage interest rate is,’ according to the Money Advice Service which is urging home owners to plan ahead for anticipated rises in interest rates. The study, of 3,007 UK mortgage holders, found that 56% have no contingency plans should interest rates rise, 47% would find it difficult to meet an increase of up to £150 in monthly repayments and 8% said they were unaware that rates are likely to rise at all, increasing to 16% for those under 35 years old. Many mortgage holders said that their finances are stretched already. Some 69% described themselves as already financially stretched when they took out their existing mortgage and this rises to 77% for those aged under 35. Also 13% admitted they are currently living beyond their means. As a result 19% said they would really struggle to cover any rise in interest rates in their monthly repayments. A significant proportion admitted to little understanding of their current mortgage deal and what impact a rise in rates would have on them. Some 28% of mortgage holders said they didn’t know what their current mortgage interest rate is, with 59% saying they had not calculated the impact that a modest one per cent rise would have on them. And 3% admitted that they didn’t even know what their current monthly mortgage repayments are. The vast majority of respondents, 84%, said an increase in interest rates would impact their finances. Many would therefore have to take immediate action to cover the increase in repayments. Although over half, 56%, admitted they would find the money to cover any increases by cutting back on day to day basics, 35% said they would have to use money from their savings, while 15% would find an extra job, 5% would have to turn to credit cards, and 2% said they would take out a payday loan. ‘Mortgage holders need to be more mindful of the fact that a rise in interest rates is widely predicted, even for those on a fixed rate, as their deal will come to an end sooner or later. Those who purchased their first property in the last five years will have only ever known historically low interest rates, but less than 10 years ago the interest rate set by the Bank of England was 5% higher than today,’ said Nick Hill, a money expert at the Money Advice Service . ‘The smallest increase in mortgage repayments can make a significant impact on a family budget, especially for those people who are already financially stretched. So it’s a good idea to review your personal finances, start looking at where you can cut back, and plan ahead now,’ he pointed out. ‘Unexpected costs often… Continue reading
