Uk
UK govt announces details of £7 billion house building priority programme
The UK government has announced a £7 billion programme to make house building a priority which includes more than 400,000 affordable homes. Chancellor George Osborne called it the biggest affordable housing programme since the 1970s when he made the announcement as part of his Autumn financial statement. It will include £2.3 billion paid directly to developers to build 200,000 starter homes aimed at first time buyers. They will be offered at a 20% discount on prices up to £450,000 in London and £250,000 across the rest of the country. He also announced £200 million for 10,000 new homes that tenants can live in for five years at reduced rents while they save for a deposit. They will then have the first right to buy the home. Then there will be £400 million to help build 8,000 specialist homes for older people or those with disabilities, the Chancellor also confirmed. But not all of this is new. The starter homes package has already been flagged up and it is well known that the government wants to build millions of home in the next five years. Nevertheless the programme has been widely welcomed, although concerns have been expressed about the focus on home for sale, although the new homes that tenants can buy after five years will also be welcomed. Among those concerned about the lack of help for the rented sector is Adam Challis, head of residential Research at JLL. ‘The Chancellor's support for 400,000 new affordable homes is welcomed at a time when there is a dire need to expand housing construction right across the country,’ he said. ‘This Government's narrow focus on home ownership is a serious concern however. Support for the private rented sector and social housing is vital to protect the financial stability of millions of households, for whom ownership is beyond reach,’ he pointed out. ‘The private rented sector is the fastest growing tenure in the UK and deserves direct support through the planning system and through the release of public land. Social housing investment provides vital security to more vulnerable households, while also reducing the heavy current reliance on temporary accommodation,’ he explained. ‘Housing delivery desperately needs long term planning rather than short term interventions. They are disruptive to construction programmes and ultimately weaken the system of delivery. Housing should be viewed as infrastructure that protects household stability and supports economic growth,’ he added. Developers will welcome the announcement by the Government of funding for new housing including starter and shared ownership homes, according to Claire Fallows, partner at Charles Russell Speechlys. ‘Questions remain, however, as to whether local authorities will continue to insist on the provision of social and affordable rented units on larger housing sites and, if so, whether Housing Associations will have the funding available to acquire those units. Flexibility by authorities will be required to ensure that housing delivery is not stalled,’ she said. Continue reading
Prime central London property market unlikely to see growth until Q3 next year
Potential sellers in central London’s prime property market are staying put and using the money they would have paid in stamp duty on refurbishing their present home, it is suggested. Official statistics show that price growth in this sector of the UK’s property market has slowed with changes to stamp duty announced a year ago blamed. The latest analysis report from Sandfords, a central and North West London agent, confirms that this has been the case. ‘The stamp duty changes that took place towards the end of 2014 have depressed the market across the board in prime central London and forecasts for next year have altered in light of this,’ said Andrew Ellina, the firm’s director. ‘I predict that price increases in the prime central London market in 2016 will be modest with some areas experiencing growth and others seeing prices remaining fairly static,’ he added. He explained that families in particular are choosing to carry out alterations rather than put their home on the market and the firm expects this to continue into the New Year. The biggest price band that has been affected is from £1.5 million to £5 million. For properties below the £1.5 million the stamp duty changes have not been too onerous. For anything above £5 million, purchasers have sufficient funds and are therefore not too bothered about a heavy stamp duty bill. Ellina believes that unless something significant happens that we cannot foresee at the moment, there will not be a crash, but the global economic outlook combined with tax changes in the UK and the perceived high current values will subdue demand and this will take some time to work through. ‘I do not anticipate sustainable growth returning until the third quarter of 2016,’ he said. Regent's Park and Marylebone are still undervalued in comparison to Knightsbridge and Kensington, but are becoming increasingly more fashionable and desirable, the report suggests. Other areas of growth will be in Fitzrovia and Kings Cross which are rapidly changing out of all recognition. ‘The capital is undoubtedly still one of the safest places in the world to live and invest, and will continue to be a top investment location. This year, buyers from all over the world including, the Far East, China, India, Greece and Europe have been heavily spending their money and buying properties in London, and it looks like they will still be big players in 2016,’ Ellina concluded. Continue reading
Scottish residential rent rises have halved in four months
The Scottish residential rental market as seen rents rising at half the speed they were during the summer months, slowing from a 3.1% annual rise in June to 1.6% October. After peaking at record prices in the summer, Scottish rents have been falling in recent months but there are signs that growth is starting to rally again, according to the latest buy to let index from lettings agent network Your Move. They increased by a modest 0.2% between September and October, the first month on month rise since July, and takes the average monthly rent in Scotland to £546, just £1 higher than the previous month in cash terms. Despite widespread recognition that tenant demand is currently outpacing supply of available homes to let, landlords believe that rent rises are likely to continue on a slower trajectory than witnessed earlier this year. Indeed, according to the latest Landlord Survey from Your Move, landlords expect rents to increase by just 1.4% over the next 12 months. Only 32% of landlords are intending to raise their rents next year, with the main motivation being to cover the cost of inflation. ‘There are indications from landlords that this trend will continue until 2016. Ultimately, rents in the private rented sector reflect what people are willing and able to pay, and are delimited by household incomes and monthly earnings,’ said Brian Moran, lettings director at Your Move Scotland. A breakdown of the figures shows that rents are higher year on year in every region of Scotland except Glasgow and Clyde in October. Scotland’s second city has seen a 0.9% drop in rents since October 2014. This means the typical rent in the area now stands at £560, down from a record of £575 in the summer of 2014. Compared to a year ago, the Highlands and Islands has experienced the biggest increase in rents, up 5.7% in 12 months. However this rate of growth is starting to slow after a monthly price drop in October, and rents have come down from their historic peak in September. After this, average rents in the South of Scotland are up 2.6% year on year. Annual rent growth in Edinburgh and the Lothians has increased from 2% in September to 2.5% in October, meaning that rents are now £15 more expensive than a year ago in Scotland’s capital city. Standing at £630 per month, this is a new record for rent prices in the region, and 15% higher than the average rent in Scotland overall. The East of Scotland has experienced a more modest 1% uptick in rent prices in the past 12 months, with monthly rents rising by £5 to £522. Three of the five regions of Scotland have seen rents increase in the past month. The urban centres of Edinburgh and the Lothians and Glasgow and Clyde have seen the strongest month… Continue reading
