Uk
British PM pledges 200,000 starter homes in next five years
British Prime Minister David Cameron has called for a national crusade to get homes built and promised to change planning rules to boost the number of affordable properties such as starter homes for first time buyers In a speech he said that there will be an overhaul of Whitehall and town hall planning rules which prevent house builders from offering low cost, affordable home ownership. Starter Homes will be sold at a 20% discount to first time buyers under the age of 40 and 200,000 will be delivered by 2020. ‘We need a national crusade to get homes built. That means banks lending, government releasing land, and planning being reformed,’ Cameron said, adding it will be part of a dramatic shift in housing policy. One of the problems, he claimed, has been that until now affordable homes have been for people to rent, not own and developers have been tied by rules regarding what kind of affordable homes can be built. ‘Those old rules which said to developers: you can build on this site, but only if you build affordable homes for rent, we're replacing them with new rules. You can build here and those affordable homes can be available to buy. Yes, from generation rent to generation buy,’ Cameron added. However, the British Property Federation (BPF) has urged the Government to focus on delivery of all housing tenures, not just homes to buy. The organisation has warned that, although initiatives to create more homes for sale are welcome, high house prices and the growing number of private renters in the UK means that more must be done to encourage the purpose built rental sector which it said has £30 billion ready to invest and the potential to deliver a significant number of new homes. ‘Politicians talk about Generation Rent as if it is something to be ashamed of, when this should not be the case. Countries such as Germany and the United States have thriving rental markets, where people happily live in institutionally backed, purpose built, high quality rented accommodation for many years,’ said Melanie Leech, chief executive of the British Property Federation. ‘While we are not against owner occupation, and see Starter Homes as a welcome initiative, we are aware that such a policy is stoking demand for home ownership, rather than focusing on meeting supply. Build to rent has enormous potential to deliver additional homes to the UK, and government must not overlook this in blind pursuit of making us a nation of home owners,’ she added. According to Mark Hayward, managing director of the National Association of Estate Agents (NAEA) 200,000 new homes is not enough. ‘We first heard this pledge in Cameron’s pre-election campaign, and we still support the sentiment. However, other initiatives such as the Help to Buy scheme still remains in place and it boils down to the fact that we are still waiting to see new homes being built; and whilst we wait capacity remains… Continue reading
Property tax changes in England and Scotland weigh on prime country house market
Prime country house prices in the UK rose by 0.7% between July and September, continuing the modest upward trend of growth that started in early 2013, the latest research report shows. Prices have shifted upwards now for 11 consecutive quarters with annual growth also up slightly to 2.7% on average, up from 2.3% in the second quarter but down from a recent high of 5.2% in 2014. The market continues to feel the impact of the increased cost of stamp duty, following the Autumn Statement in December 2014, according to the report from real estate firm Knight Frank. It says that this continues to weigh on both price growth and activity at the top end of the market. In fact, the latest figures from the Land Registry show that between January and July there have been 35% fewer sales with a value above £1.5m outside of London compared to the same period last year. The prime market below £1.5 million has been less affected by these tax changes and prices for homes in this sector have risen by nearly 4% annually over the year to September. In comparison, over the same time properties priced above £1.5 million, the point at which the 12% rate of stamp duty kicks in, have risen by 2%. Under £1.5 million, price growth has generally been underpinned by demand for homes in urban centres. Price growth in town and city markets including Bristol, Bath and Oxford for example, where buyers continue to be attracted by good schooling, amenities and transport links, has outperformed the wider prime market. ‘There remains a significant price differential between property prices in the prime country market and in London, while anecdotal evidence from agents suggests that there is pent up demand from buyers in the Home Counties and the South West. This could help underpin prices and an increase in activity levels across the market as the year progresses,’ the report says. However, the average prime country house price is still 14% below its 2007 peak. In contrast, prime prices in London are, on average, 34% higher than their previous peak values. ‘The rise in London prices in the last few years means that buyers looking to swap the city for the country are able to get a lot more property for their money, with such buyers able to take advantage of the relative discount which currently exists,’ the report adds. In Scotland the country house market has also been affected by tax changes with the new Land and Buildings Transaction Tax (LBTT) being introduced in April 2015. The report shows that as a result prices fell by 0.7% between July and September, the first time that prime prices have fallen on a quarterly basis in over two years. The report points out that the levy, which replaced Stamp Duty Land Tax, has resulted in a significant increase in purchase costs for buyers in the prime market and adds that negotiations between buyer and… Continue reading
Average home price in London set to reach £1 million by 2020
If the current annual rate of price growth in London continues, the average price of a home would be £1 million by the end of 2020, new research has found. The prediction is made as the price of property coming to market in London has rebounded from its holiday season lull to jump by 2.2% or £13,177, according to online property portal Rightmove. Indeed, the average price of a newly marketed home in the capital is at a new all-time high of £620,003, up by 0.8% or £4,888 on the previous record set in July of this year. ‘This month’s 2.2% rise more than reverses the seasonal slowdown over the last two months when the average price of property coming to market fell by 0.6%,’ said Miles Shipside, Rightmove director and housing market analyst. ‘It’s a volatile time of year for average prices however, as potential sellers of higher priced properties tend to refrain from coming to market in the holiday period, but then get on with their home moving plans again in September partly influenced by children going back to school. The back to normal service has resulted in new seller asking prices reaching another milestone, with a new record high,’ he explained. The annual rate of increase is now up to 9.5% as London’s long term supply/demand imbalance and international allure result in underlying upwards price pressure, enabling the capital’s property market to maintain its upward trajectory through temporary upheavals such as the recent election. Rightmove calculates that if the current annual rate of price growth was maintained for the next five years the average price tag of a London home would be £1 million by the end of 2020. ‘The average price tag on a newly-marketed property is £53,923 higher in September this year than last and if this trend were to continue it would hit £1 million in just over five years. While we are not suggesting that this level of growth can or will be maintained, this extrapolation illustrates the desperate need for more building and more affordable housing in and around the capital,’ Shipside added. Lee James Pendleton, director of James Pendleton Estate Agents, confirmed that the summer has been good for London property. The firm has experienced a huge upturn in the market around Wandsworth, Lambeth and Hammersmith and Fulham. ‘While there have been less buyers overall, there are more quality buyers. One example of a place that’s booming is Nine Elms in Battersea, where studios that had been selling for £450,000 are now selling for over £600,000. These new developments have had a ripple effect on Wandsworth in general, with prices up around 15% in some places,’ he pointed out. Continue reading
