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UK report reveals the economic benefits of new home building
House builders in the UK are providing more than just homes with a new report revealing the extent of the benefits. The report from the Home Builders Federation, says that for example, in the South East of England where there is a shortage of new homes, last year some 22,470 homes were started by private house builders, the public sector and housing associations in the sector. But this is just the tip of the iceberg. Based on the findings of the report, the economic footprint of this house building meant that 96,621 jobs were supported, 899 graduates and apprentices positions were created, and 966,210 new trees or shrubs were planted. It also shows that £36,109,290 was contributed towards education in the area, £28,896,420 in extra council tax revenue was generated plus £224,700,000 in other tax contributions, and some £21,031,920 went towards new open spaces, community spaces or sports facilities, or enhancing existing resources through Local Authorities. On top of this 5,168 new affordable homes were built and payments of £497,553,210 were made to local authorities for further provision of new affordable homes. While house building is increasingly being recognised as a key driver of economic growth, there are still not enough new homes being built in the region, the report points out. In the South East, this manifests itself as a shortfall of 12,011 homes every year. If the region was to meet this need, the knock-on economic benefits would be 51,648 jobs created, 480 graduates and apprentices positions created, 516,482 trees and shrubs planted, and £19,301,998 going towards education in the area. There would be £15,446,403 in extra council tax revenue, £120,112,000 in extra tax contributions, £11,242,483 contributed to open spaces, community, sport and leisure facilities, 2,763 affordable homes built and payments of £265,964,002 to local authorities for further provision of new affordable homes. 'House building makes a huge, but largely hidden, social and economic contribution to the South East. And whilst housing output in the region has increased, we are still not delivering anywhere near what is needed' said Stewart Baseley, executive chairman at HBF. 'As well as delivering desperately needed new homes, increasing housing supply would deliver significant additional benefits for everyone living in the region. As well as providing desperately needed new homes, increasing house building would deliver massive additional benefits to communities across the land,' he explained. 'People often don't realise that the new community centre or school or football pitch has been paid for as a direct results of new homes. Ultimately, providing new homes for people also means better facilities for the wider community. These are the very things that turn a collection of houses into communities; brand new places where people want to live,' he added. Neal Hudson, associate director at real estate firm Savills, pointed out that house prices in the South East have risen by 17.3% over the last two years. 'However, the performance of markets within a region can vary substantially. These variations are determined by the economic, demographic and affordability profile of demand… Continue reading
UK housing market sees growth of second charge lending
Up to one in 10 remortgages or home owners seeking further advances in the UK could benefit from taking a second charge loan, it is claimed. Secured lending specialist V Loans believes that a combination of record low rates in the second charge market and the sector’s strong growth since 2011 highlights the benefits for customers and the opportunities for brokers. Customers who would potentially benefit include interest only borrowers, people facing early repayment charges, and people benefiting from lifetime trackers or low fixed rate mortgages who would lose deals by remortgaging, as well as those who may want more flexible terms for their further borrowing. Landlords could also be in line to benefit from increased competition in the buy to let second charge market, leading to significant pricing reductions, making second charge lending an attractive alternative to remortgaging allowing landlords to benefit from the increased equity within their current portfolio. The second charge market, which is on course to lend up to £750 million this year, has achieved year on year growth since 2011 against a background of a subdued remortgage market. Rates have dropped to all-time lows of 4.05% above base rate making the case for borrowers to take out a second charge without disturbing their existing mortgage arrangements. However V Loans estimates just 50% of advisers offer second charges to their clients, and is urging advisers to consider the benefits of second charge loans. 'Remortgaging or taking a further advance is not always in the client’s best interest and therefore it’s essential that all options are considered,' said Marie Grundy, managing director of V Loans. 'Interest only customers, those benefiting from lifetime trackers and low fixed rate deals or those who do not want to incur substantial early repayment charges by remortgaging, including landlords who wish to release trapped equity, could all stand to benefit from second charge finance,' she explained. 'The pending alignment of regulation for first and second charge markets will deliver huge opportunities and innovation to the market allowing advisers to provide better customer outcomes. Intermediaries should seriously consider including second charges within their scope of service ahead of the regulatory changes next year,' she added. Continue reading
Planning consent for new homes in New Zealand up 24% annually
The new build property sector in New Zealand is growing with planning consents up 24% in July compared with a year ago, the latest data shows. Overall there were 2,824 new dwellings consented nationally, the highest number since march 2005, according to the figures from Statistics New Zealand. It was boosted by apartments and town houses, flats, and units and Waikato led the growth with consents up 40% while Auckland saw growth of 31%, well above the national average. The total value of consents for all buildings in July 2015 was $1.4 billion, with some $976 million for residential buildings and $455 million for non-residential buildings. The data also shows that over $4 billion worth of building work was put in place in the June 2015 quarter, up nearly 8% on the June 2014 quarter, the highest quarterly value recorded in the 50 years since the series began, and represents almost $900 worth of building work per person. 'The value of both residential and non-residential building work increased overall. In Auckland, residential work grew, while in Canterbury most of the growth was in non-residential work,' said Statistics New Zealand business indicators manager Neil Kelly. After removing price changes and seasonal variations, the overall volume of building activity increased 1.6% following a 1.8% increase in the March 2015 quarter. Within this, the volume of non-residential work increased 5.2% while residential work fell 1%. The volume trend for non-residential building activity reached a new high in the June 2015 quarter, exceeding levels last seen in the March 2006 quarter. Meanwhile, the residential building activity volume trend is still 8% lower than the June 2004 quarter peak. The overall building activity volume trend grew to a level last seen 10 years ago in the June 2005 quarter, the previous series peak. Continue reading
