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Legal experts says major changes are needed to meet UK’s chronic housing shortage
Seismic changes are needed if any of the top political parties' housing targets in the UK are to be met in the short or long term, it is claimed. Planning permissions, regulatory requirements, funding, the economy and lack of skills have all added to the current housing shortage, according to Rosemary Edwards, partner and head of residential development with corporate solicitors Shulmans LLP, who has acted for many of the UK's top house builders for over two decades. ‘I have heard of many major house builders being accused of land banking but this is patently ridiculous. A house builder's business is entirely based on selling homes. If they can build them and sell them, why would they hold back?’ she said. In reality a house builder will struggle to sell more than say 40 houses a year on any one site, so natural market forces mean that a scheme of 200 houses may take five years to build out. Increased planning and regulatory hurdles have added time and cost, such as the new Community Infrastructure Levy, now effective in some districts, including Leeds. Staff shortages in local authority planning departments can also add to delays,’ she explained. She also pointed out that there is also the problem of mortgage finance. ‘We may say that we need 200,000 new houses or more each year, but not everyone who wants a house can afford one and mortgage eligibility criteria have tightened up considerably in recent years,’ added Edwards. According to Tim Halstead, Shulmans' managing partner and a nationally acknowledged authority on house building, while there's a great deal of talk about building on brownfield sites, doing so throws up as many problems as it supposedly solves. ‘Such sites often have several land owners, so you have to bring them all together or persuade the local authority to exercise compulsory purchase powers. That all takes time and of course you have to build houses, where people want to live which may not be on a former industrial site,’ he said. ‘There is often the added complication of expensive clean-up of contamination or increased costs arising say from digging out old foundations. Those costs can make schemes unviable without subsidy. As long ago as the 1980s we worked on a site in Hull that got a central government grant of £20 million but there just isn't that kind of money around right now,’ he added. Halstead also pointed to a chronic UK skills shortage being another factor in the low numbers of new houses being built. ‘Many skilled construction workers left the industry during the recession. You can't just click your fingers and bring in an endless supply of tradesmen to get new houses built,’ he explained. ‘House builders are now competing, more so than ever before, to recruit skilled labour and to maintain relationships with quality contractors and suppliers. That drives up costs and can cause delays,’ he added. Recent proposals include encouraging small and medium… Continue reading
Edinburgh property market sees strong start to the year
The Edinburgh property market has had a flying start to the year with encouraging levels of demand and high quality property coming to the market, it is claimed. There has also been an increase in property viewings, according to CKD Galbraith, following a year of steady growth for the Scottish property market. The firm’s statistics from the first quarter of 2015 suggest that this trend is set to continue with the firm’s overall sales up 24% compared to the same period last year. As the traditional spring selling season commences the firm’s offices across Scotland are generally reporting rising levels of buyer confidence and activity. CKD Galbraith research reported that the first quarter of 2015, from January to March, saw the number of properties on the Edinburgh market rise by 150% compared to the same quarter of 2014. Buyer interest was also significantly up with a 28% increase in property viewings and an 80% rise in potential buyers registering with the office in comparison to the previous quarter. ‘Edinburgh has experienced an increased demand for high quality city properties and I’m confident that our established team has an unrivalled advantage in the local market to be able to secure and sell such properties,’ said Jamie McNeill, from the Edinburgh office. ‘The statistics demonstrate a healthy market and we forecast this is likely to continue throughout the spring and summer months,’ he added. The data also shows that sales in Edinburgh increased by 50% compared to the last quarter, 62% of sales were completed by local buyers, 25% national and 13% international, and the average time taken by the Edinburgh office to sell property was seven weeks, with the quickest sale conducted in just one week. It found that 62% of purchases were made by cash buyers and there was an increase in the number of high end properties on the market at £400,000, probably due to the introduction of the new LBTT property tax in Scotland in April. The firm has asserted that the new tax system in Scotland, the Land and Buildings Transaction Tax (LBTT), should not put potential buyers from outside Scotland off, the local office’s sales teams are highly experienced in guiding buyers through the process. During the first quarter of the year nearly 10% of the firm’s sales were completed by international buyers. Continue reading
UK house prices up 1% in April, according to latest index
Annual house price growth in the UK edged up to 5.2% in April from 5.1% in March, according to the latest index from the Nationwide building society. The data from the leading lender also shows that house prices rose by 1% in April, taking the average price of a home to £193,048. This is the largest monthly increase since June 2014 and as a result the annual pace of house price growth increased for the first time in seven months, Nationwide chief economist Robert Gardner pointed out. He explained that the pick-up in price growth has occurred even though the pace of activity in the housing market has remained fairly subdued in recent months. ‘Indeed, the number of mortgage approvals is still well below its long run average and 20% below the levels recorded in early 2014. The strength of the economy and relatively subdued pace of activity in the housing market remains something of an anomaly,’ said Gardner. ‘It is possible that heightened uncertainty ahead of the election is weighing on activity, though there is no compelling evidence from previous UK elections to suggest a strong impact. Healthy labour market conditions and continued low mortgage rates should help underpin housing demand in the quarters ahead,’ he added. The Nationwide has also been looking at how the UK housing market compares to the rest of the European Union. ‘The UK is often characterised as a nation of home owners, though compared with our European neighbours, the proportion of the population owning their own home is not particularly high. In fact, it is actually towards the lower end of the range,’ Gardner said. He pointed out that although some other European nations have seen declines in their home ownership rates in recent years, the movement in the UK has been more pronounced. ‘That said, even at its all-time high of 73% in 2007, the UK home ownership rate was not particularly high by EU standards,’ he explained. ‘Since then, there has been significant growth in the private rental sector. Interestingly, while the UK home ownership rate may not be particularly high, the propensity for young adults aged 18 to 34) to live with their parents is relatively low, a trend which has become more pronounced over the past five years,’ he added. Continue reading
