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Councils in England urged to sell off high value properties to fund more affordable homes
Councils in England should sell vacant buildings and reinvest the money in more affordable homes, according to a government minister. Too many are sitting on multi million pound vacant houses yet the sale of just one high value council house could help fund more affordable house building, increase supply and reduce social housing waiting lists, said Communities Secretary Eric Pickles. He said such a move is part of the government’s long term economic plan to get Britain building and is the latest in a number of measures taken since 2010 to make the best possible use of social housing. Social housing waiting lists have halved since 2010 but Pickles believes that new rules could bring this down even further and from next April, councils will be required to publish the most recent valuation of their social housing stock, annually to ensure it is being put to best use. The information will be published by postcode, listing how much the properties are worth, how many are occupied and how many are standing empty. Pickles explained that this will give people the information they need to ask questions of how their council is managing stock and how selling more expensive properties could provide the funds for councils to build more homes and reduce waiting times. Councils could also sell their higher value empty properties, releasing more money for house building without affecting existing tenants’ rights. And with the numbers of empty homes down by 160,000 since the end of 2009 to a 10 year low, this could reduce the numbers of empty properties even further. For example, Southwark council were able to sell off one of their council homes for a staggering £3 million, helping to fund the building of 20 new properties across the borough. Pickles argued that other councils across the country could follow suit, potentially helping thousands of families by selling their higher value vacant homes. ‘Councils across the country are sitting on millions of pounds which could be put to far better use and get them building elsewhere in the area. This would allow more families to come off social housing waiting lists and get into homes,’ said Pickles. ‘Instead of holding that money as equity in expensive empty properties, the councils should sell up those vacant buildings and reinvest the money to get the country building,’ he added. He pointed out that through the government’s Affordable Homes Programme some £19.5 billion public and private funding has been invested in affordable house building, with a further £23.3 billion investment planned from 2015 to 2018. Over 200,000 new affordable homes have been delivered since 2010. House building is a key part of the government’s long term economic plan and since 2010 a range of measures have been taken to ensure the best possible use of social housing. Continue reading
Home buyers in London borrowing higher amounts, latest CML data shows
More mortgages were completed and a higher amount borrowed in Greater London in the third quarter of this year than in any quarter since 2007, according to the latest data from the Council of Mortgage lenders. House purchase lending to home buyers increased 12% quarter on quarter in London totalling £7.1 billion, a rise of 15% on the second quarter. Compared to the third quarter of 2013, the number of loans increased 3% and value of these loans increased by 13%. This is the highest quarterly volume in London since the fourth quarter 2007, and the highest amount borrowed since the third quarter of 2007. First time buyers took out more loans and borrowed more in total than in any quarter since 2007 totalling 13,300 loans and £3.3 billion. The affordability levels slightly improved with first time buyers typically borrowed 3.86 times their gross income, less than the 3.90 in the previous quarter but above the UK average of 3.41. The typical loan size for first time buyers was £221,997 in the third quarter, up from £212,500 in the previous quarter. The typical gross income of a first time buyer household was £58,000 compared to £55,255 in the second quarter. First time buyers in London have tended to put down larger deposits than in the UK, typically putting down a deposit worth 24% of the property value compared to the UK average of 17%. In the third quarter, first time buyers paid 21% of gross monthly income towards capital and interest payments, a minor change from the second quarter when it was 21.1%. Due to higher house prices within London compared to the UK overall, there was a continued shift in the mix of properties bought by first time buyers in London towards more expensive properties. In the third quarter, 66% of first time buyers bought properties priced at more than £250,000, up from 63% in the second quarter and 54% in the same period last year. This was significantly higher than the UK overall level of 20%. In the third quarter of 2014, lending to home movers saw larger growth quarter on quarter compared to first time buyer lending, but a slight decline in lending volumes when looking at year on year comparisons. Home movers did however borrow more this quarter than any other quarter since 2007 totalling £3.7 billion. Home mover affordability changed fractionally, with home movers typically borrowing 3.69 times their gross income compared to 3.66 in the second quarter and the 3.05 in the UK overall. The typical loan size for home movers was £290,000 in third quarter, up from £281,000 in the previous quarter. The typical gross household income of a home mover was £83,596 in third quarter compared to £82,614 in second quarter. Home movers in Greater London spent 20.8% of their gross income to cover monthly capital and interest payments, slightly changed from 20.6% in the second quarter and less than the 18.8% UK average. The number of loans advanced for… Continue reading
Scottish rent rises outpace rest of UK
Scotland is seeing stronger annual rent growth than England and Wales, with average residential rents up 2.2% compared to a year ago, the latest index shows. In England and Wales monthly rents increased just 1.5% on average in the past year, according to data from lettings agent network Your Move. The average rent in Scotland now stands at £537 per month, back in line with the record set in August this year. Rents climbed a moderate 0.3% in the month to October, recovering from a dip during September. But taking a longer term view, the rate of growth has cooled. Annual rent rises have eased from a 3.2% increase over the year to October 2013. ‘Snags in supply and concerns over potential rent caps are setting the stride in Scotland, but in the longer term, the march of private sector rents is easing back on an annual basis. After years of consistency and incremental adjustments, rent rises quickened rapidly after the changes to lettings legislation made tenancy fees illegal. Instead of facing a one-off payment, tenants saw their monthly rents rise at a much accelerated pace. This market is only just starting to self correct and steady,’ said Christine Campbell, regional managing director of Your Move. ‘The introduction of any further lettings controls or restrictions by the Scottish government could further disrupt what was a healthy and extremely gradual rhythm of rent growth, to the detriment of thousands of renters. Complicating legislation would ostracise existing landlords and discourage new investment in the private rented sector, squeezing the supply of homes to let and simply adding to the bottleneck of the current housing shortage,’ she explained. ‘The private rented sector is the lifeblood of the economy, allowing workers flexibility and accessibility to the jobs market. Tenant demand needs to be balanced by greater availability of homes to let, to protect against unnaturally bloated rent increases,’ she added. A breakdown of the figures shows that on a monthly basis, rents are higher than September across all but one region of Scotland. The biggest month on month increase was recorded in the East, with rents climbing 1.1% between September and October. The data also shows that average rents in Edinburgh and the Lothians set a new peak of £615 per month, following 0.6% growth since September. The only region to experience a price fall on a monthly basis was Glasgow and Clyde where, the average monthly rent dropped £5 or 0.7% in the month to October, to £565. Rents have risen on an annual basis in three out of five regions of Scotland in October. Edinburgh and the Lothians have seen the strongest annual uplift in average monthly rents, rising 5.7% in the 12 months to October. This is followed by a 3.2% annual increase in Glasgow and Clyde, while rents in the East rose 2.2% over the last year. Rental prices dropped across two regions over the year to October. The average monthly rent in the South has fallen 0.5% since October 2013,… Continue reading
