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New report warns only well-off will be able to afford to buy a home in the UK
Only the wealthiest of the next generation will be able to buy a home if current trends continue in the UK, according to a new report from the National Housing Federation. It shows that first time buyers now have to pay, in real terms, 10 times the deposit needed in the early 1980s as well as earn more, borrow more, and rely more on family wealth than even a generation ago. The average first time buyer today needs a £30,000 deposit, and has an average income of £36,500compared to the average salary for first time buyers in the 1980s of £20,000. A first time buyer has to borrow 3.4 times their annual income on average, compared to first time buyers in 1979 who needed to borrow just 1.7 times their income and two thirds of first time buyers receive financial help from parents, a figure that has doubled in five years. As a result home ownership is being pushed out of reach of average earners including nurses, firefighters and plumbers. And with the number of home owners falling and first time buyers not getting considerably older, it indicates that the pool of those buying homes is shrinking to those with the greatest wealth. The struggle younger generations face is being felt across the country. In separate polling by YouGov on behalf of the National Housing Federation almost 80% of people in England think it's harder to own a home now than it was for their parents' generation. Eight out of 10 people polled also didn't believe any of the main political parties would effectively deal with housing. Younger people whose parents can't help financially, can find themselves stuck living in their childhood bedrooms or paying high private rents that make it almost impossible to save. The National Housing Federation also highlights that fewer first time buyers in the future could slow down the wider housing market and make it harder for 'second steppers' to move up the ladder. ‘With the high salary, and huge deposit younger generations now need to buy even a modest home, home ownership is quickly becoming an exclusive members club. Sadly, it will depend on the wealth of the family you were born into as much as your own hard work,’ said David Orr, chief executive of the National Housing Federation. ‘We've found that eight out of 10 people don't believe any of the main political parties will effectively deal with housing, but they still have the chance to put that right. With a bold long term government plan for house building our housing crisis is solvable. We desperately need politicians from all sides to commit to ending the housing crisis within a generation,’ he explained. Continue reading
UK govt announces new building standards proposals
New measures will save UK house builders and councils £114 million per year by cutting red tape and ensuring homes are built to demanding standards. The current system of rules on how new homes can be built encourages wide differences across the country with councils able to select from a range of standards in a ‘pick and mix’ approach that gives an unlimited number of permutations in local rules. This creates cost, uncertainty, bureaucracy and duplication for house builders. So Communities Minister Stephen Williams has announced that the government is consulting on the details of how it will consolidate this mass of standards into a core range of five standards. ‘We need to build more homes and better quality homes and this government is delivering on both. It’s now time to go further by freeing up house builders from unnecessary red tape and let them get on with the real job building the right homes, in the right places, to help families and first time buyers onto the property ladder,’ said Williams. ‘The current system of housing standards creates a labyrinth of bureaucratic rules for house builders to try and navigate, often of little benefit and significant cost. We are now slashing this mass of unnecessary rules down to just five core standards saving house builders and councils £114 million a year whilst making new homes safer, more accessible to older and disabled people and more sustainable,’ he explained. ‘Current housing standards required of new development can be unworkable, including demands for solar and wind energy sources that can’t physically fit onto the roofs of apartment buildings, or unnecessary including compliance regimes which add thousands to the cost of building a new home without any benefit,’ he added. A national regulation on security standards in all new homes will be introduced with the aim of protecting families from burglary and for the first time ever, a national, cross tenure space standard that local authorities and communities can choose to use to influence the size of new homes in their local area. There will be new optional building regulations for accessible and adaptable mainstream housing to meet the needs of older and disabled people and the introduction for the first time of an optional building regulation setting standards for wheelchair housing. The consultation seeks views on the detailed technical requirements supporting this new approach to housing quality. The government proposal is for the security standards to become a new mandatory regulation, and for councils to be able to decide whether to apply the other remaining standards to developments built in their areas. In addition a new zero carbon homes standard will come into force through the building regulations from 2016, building on the 30% energy efficiency improvements already introduced into building regulations in 2010 and 2013. These will save householders up to £200 on energy bills. Continue reading
New home lending remains steady in Australia
New home lending activity in Australia remained healthy at the start of the new financial year, according to the latest data from the Australian Bureau of Statistics. Although the number of loans to owner occupiers purchasing or constructing new homes slipped by 0.8% in July, over the three months to July the number of these loans continued their upward momentum with an increase of 1.9%. Also, compared with a year earlier, the number of loans in the latest three months is 8.8% higher. ‘In an encouraging sign for new home building, lending activity for much needed new housing appears to be consolidating the recovery of the previous financial year, said Diwa Hopkins, Housing Industry Association economist. ‘Lending to investors constructing new homes made a strong recovery throughout the 2013/2014 financial year and this data reinforces the strength of that improvement. The value of this investment lending component in the three months to July 2014 is 10.5% higher than in the same period in 2013,’ she explained. ‘The figures show that current credit conditions are having the desired impact on residential construction, with both investors and owner occupiers taking advantage of the favourable conditions to add to Australia’s stock of housing, which will aid housing affordability across the spectrum of the housing market,’ she added. She pointed out that policy makers at all levels of government must be acting and coordinating to address existing barriers to further growth in the new housing stock. Examples include excessive taxation, zoning and approvals delays. ‘These impediments need be addressed in order for new home building to gather a further leg of recovery in 2015,’ she said. A breakdown of the figures show a 9% rise in the number of owner occupier loans for new housing in New South Wales. But the number of new home loans fell by 2.8% in Victoria, by 2.9% in Queensland, by 4.2% in South Australia, by 7.6% in Western Australia, by 7.7% in Tasmania, by 14% in the Northern and by 8.4% in the Australian Capital Territory. Over the three months to July 2014, however, lending increased in six out of the eight jurisdictions. Continue reading
