TSI
A new garden city forms part of major new housing plan from UK govt
Thousands of new homes are to be provided as part of a new range of UK government measures that include the creation of a new garden city. Communities Secretary Eric Pickles said these new measures would support locally led efforts to build on the momentum gathered since 2010 which has seen house building levels rise to a seven year high. The initiatives include a locally led garden town at Bicester, backed by the council and local MP, which will provide up to 13,000 new homes and the provision of 10,000 new homes on surplus public sector land at Northstowe in Cambridgeshire. Also announced is a new target to release enough formerly used surplus public sector land for 150,000 new homes between 2015 and 2020 and government support to provide 11,000 new homes at Barking Riverside in East London, and 7,500 new homes as part of the redevelopment of Brent Cross. The government also announced measures that will provide 275,000 new homes between 2015 and 2020, the fastest rate of affordable house building in two decades and the first four housing estates to be shortlisted for a share of £150 million to kick start their radical regeneration. Pickles said the programme would mean the creation of over 200,000 new homes across the country and added that the government is also committed to expanding existing towns. Mark Hayward, managing director of the National Association of Estate Agents, generally welcomed the announcements. ‘In one respect, the announcement of the 13,000 new homes to be built in Bicester may be seen as a good thing for the area and housing market there. Bicester is already a town which we have seen undergoing development in the last few years, and so new housing in the area will help to support its growth,’ he said. ‘ However, while this is a small and welcome step in the right direction in terms of housing supply, there is still much more needed across the country to meet the demand for housing both now and in the years to come. This need is reflected in the most recent announcement today of further significant building programmes,’ he explained. ‘It would seem that former public sector land now laying idle will form part of a significant plan to improve the number of available homes in the next five years. In addition, it would appear that support to provide new homes at Barking Riverside and Brent Cross is yet another step towards achieving the number of new builds so needed in those areas,’ he added. But he pointed out that whilst infrastructure investment has been mentioned, the lack of capacity, in terms of skills and labour, is currently insufficient to meet the targets announced. ‘In terms of the affordable new homes programme announced, this is extremely good news, however this must be coupled with the availability and achievable accessibility to mortgage funds for first time buyers to enable them to benefit from the initiative,’ he added. Continue reading
First time buyers and renters in UK underestimate their outgoings, research finds
The majority of first time buyers and renters in the UK underestimate their monthly outgoing by almost £200 a month, suggesting they could have problems if their income reduced. Only 14% of first time buyers and renters are able to accurately calculate how much their outgoings will be from the outset, according to ongoing research from discount online firm VoucherCodesPro. It polled 1,673 people aged 18 to 30 from around the UK, each of whom had either bought their first home or rented a property for the first time in the last six months. Respondents were asked about their bills in the early stages of living in their property. Everyone taking part was asked ‘When taking into account the first month after you’d moved in to your current property, did you underestimate, overestimate or accurately calculate what your monthly outgoings would be for bills?’ The majority of respondents, 63%, said they underestimate how much their first round of monthly bills would be. When these people were asked how much they’d underestimated the amount by, the average answer was £198. When asked what bills they’d underestimated, specifically, the most popular answer was 42% gas and electricity, 27% water and 21% entertainment and television. Some 23% of the total respondents said they had overestimated how much their monthly outgoings would be in the initial stages of living in their home, with the average overestimation figure being stated as £167. Just 14% of the respondents said they accurately calculated how much their bills would cost them from the outset. When told to take into account their financial situation at the time of the poll, respondents were asked if they ‘lived comfortably’, ‘just managed to make ends meet’ or ‘struggled’. The majority, 54%, said they ‘just managed to make ends meet’, whilst 31% said they ‘struggled’ with the cost of living and 15% said they ‘lived comfortably’. ‘Moving out of home into your own place for the first time can be a bit of a learning curve, especially when it comes to bills,’ said Nick Swan, the firm’s chief executive officer. ‘Managing your money correctly and making sure you’ve accurately worked out how much everything is going to cost you is really important. When setting budgets and working out the cost of bills, it’s always best to overestimate and then you can put an excess into savings,’ he added. Continue reading
Home price growth in the US continues to moderate
National home price gains in the United States fell to 6.7% year on year and 1% quarter on quarter in November, according to the latest index from Clear Capital. National trends were echoed at the regional level, with the West seeing the strongest moderation across the country and overall growth has slowed now for 11 months in a row. In fact, for the first time since the start of the recovery three years ago, the West’s yearly rates of growth fell below 10%, a sure sign of more moderation to come over the next several months for the nation, according to the firm. At the height of the recovery in 2013, national prices including distressed sales outperformed the performing only sale segment of the market by 4.2%. Now the all sale segment is outperforming the performing only sale segment by 3%. These segments’ rates of growth will likely continue to fall in line with each other as investor engagement dwindles, a result of fewer distressed sale opportunities. As this occurs, markets will be more reliant on performing only sale demand and price growth,’ the index report explains. It also points out that improvements in the broader economic landscape have not instilled confidence in traditional home buyers and the general lack of demand in the performing only segment, coupled with a dwindling supply of distressed inventory, leaves the future of home prices squarely in the hands of traditional home buyers, who have yet to show any signs of re-engaging. It says that performing only sales are not yet strong enough to support recovery sized market growth without distressed sales. The data also shows that it has been a steady descent for national yearly rates of growth. They have dropped 5% from a high of 11.7% in December 2013. This is due in part to the market’s natural normalisation as the correction to the correction subsides and distressed sale inventory dries up. While this is healthy for markets overall, the weakness of price growth in the performing only segment is further cause for concern. Excluding distressed sales, performing only national home price growth over the last year was just 4.4%, down from a recovery high of 7.2%. Even more concerning is the performing only segment’s drop in quarterly growth to 0.6%, nearly cut in half over the last rolling quarter which saw quarterly rates of growth at 1.1%. ‘Reduced reliance on distressed sales and diminishing gains in the performing only sale segment could be too much for the recovery to overcome as we enter winter. The recovery is at a tipping point. Markets need non investor demand to ramp up, and home buyer confidence restored,’ said Alex Villacorta, vice president of research and analytics at Clear Capital. ‘Should this turn into a negative feedback loop, the likelihood for quarterly price declines at the national level could turn into yearly price declines by the end of 2015. Performing only sale trends are a bellwether for what’s to come next year,’ he explained. ‘Think of… Continue reading
