Uk
Court ruling means UK new home targets are more difficult, it is claimed
A land broker has warned that a recent High Court ruling lessens the likelihood of the UK ever hitting its house building targets. Following a legal challenge by Reading Borough Council and West Berkshire District Council, the ruling by Justice David Holgate forced ministers to scrap guidance which excluded developments of 10 homes or fewer from the requirement to provide or contribute to affordable housing provision. The Department for Communities and Local Government (DCLG) has said it will appeal the High Court’s ruling. However, according to Home Counties land broker Aston Mead it will lead to fewer homes being built as a result. ‘It has already stopped a stack of proposals in their tracks and a lot of sites in our pipeline are now being renegotiated,’ said Aston Mead director Adam Hesse. ‘Sites that may well have been suitable for 10 units will now be reduced to whatever the new threshold is, so full use won’t be made of the brownfield land available. Consequently it will mean less income for districts and boroughs, the very same organisations fighting for a change to the guidance in the first place. It’s utter madness,’ he added. He also pointed out that the contribution that small developers make to the house building programme should not be underestimated. ‘Small sites are the engine rooms of UK development. They are invariably built by small firms who have proportionately higher costs. The economic viability of their schemes is often on a knife-edge, with little ability to challenge local authority demands for affordable housing,’ said Mead. ‘This latest ruling now means that they will simply give up trying to build on certain sites, leading to fewer homes of all types. What’s more, small and little used commercial sites which could be more productively turned over to residential housing won’t even be attempted,’ he explained. ‘The country desperately needs more homes. It is already falling far short of current house building targets. A ruling like this is a significant blow for smaller residential developers and will only serve to ensure that those targets are even harder to meet,’ he concluded. Continue reading
Residential property sales reach a seven year high in Scotland
Home sales reach in Scotland reached a seven year high in July and prices increased by 0.4% compared to the previous month, the latest index data shows. Overall sales were up 6% but annual price growth slipped 0.1%, taking the average house price to £165,162, according to the Your Move index. The report says that the jump in sales is due to buyers capitalising on lower stamp duty under the new Land and Buildings Transaction Tax (LBTT) which was introduced in April of this year. Activity is growing at a time when the supply of new build housing in Scotland reached its highest level since 2010/2011 but there is some hesitation at the higher end of the market which the report says is the reason why prices are now overall 0.1% lower than a year ago. ‘Activity has been picking up speed in recent months. Lower stamp duty for purchases below £325,000 under the (LBTT) first got the ball moving in April. Since then, the conclusion of the general election, supply of new build homes and the favourable mortgage rate environment have only added to this momentum,’ said Christine Campbell, Your Move managing director in Scotland. ‘After a slightly sluggish start to 2015, sales in the first seven months are exceeding those in 2014. It’s the middle and lower end of the housing market where the tempo is really quickening,’ she added. Indeed, the data shows that Stirling saw the biggest leap in property sales month on month in July, up 49%, with the most commonly sold properties flats. ‘Across Scotland overall we’re witnessing fewer top end home sales in 2015 than in 2014, due to the steeper transaction costs now incurred. The proportion of homes in Scotland sold for more than £325,000 has fallen from 9.2% of all property sales in July 2014, to just 7.8% a year later under the revised taxation system,’ said Campbell. ‘At the same time, there’s been a lot of propulsion emanating from the first time buyer market, feeding off a flurry of new build housing. Our analysis shows that the average price of a first-time buyer property has risen 6% from the second quarter of 2014 to the second quarter of 2015 as a result of this burgeoning demand,’ she explained. The data also show that total supply of new build housing in Scotland has reached its highest level since 2010/2011. Glasgow saw the biggest rise in new homes built in the past year followed by Aberdeenshire and Edinburgh, helping these areas become the first port of call for many new buyers looking to climb onto the property ladder. ‘With housing market activity mostly concentrated at the lower rungs of the property ladder, and a dearth of top end property purchases, overall Scottish house prices have dropped marginally year on year. As of July 2015, average house prices in Scotland are down 0.1% annually, equivalent to falling £176 in 12… Continue reading
Lending for UK buyers sees growth, especially for first time buyers
House purchase lending in the UK increased by 9% in July compared to the same time last year with the economic outlook allowing more people to enter the property market, according to the latest data. The figures from the Council of Mortgage Lenders show that first time buyers saw a month on month increase by volume and by value in activity compared to June and a year on year rise compared to July 2014. Home mover lending saw larger monthly and annual increases than first time buyers by volume and by value but home owner remortgage activity saw a slight dip month on month but substantial increases when compared to the same month in 2014. Buy to let continues to grow year on year and month on month, mainly driven by buy to let remortgage activity, the CML data also shows. ‘The market has shown steady growth in house purchase and buy-to-let over the past few months with general improvements in economic factors across the UK allowing for more people to enter the property market,’ said Paul Smee, director general of the CML. ‘This positive direction of travel going into the autumn months reinforces our recent revised forecasts that lending levels should continue to grow gradually over the rest of the year after a subdued beginning of the year,’ he added. House purchase lending in the UK saw its third consecutive month on month growth by volume and by value in July. This was also the second month that volumes and values increased compared to the same month in 2014. As previously reported, UK gross lending in July totalled £21.7 billion, up 8% on June and 12% up on July last year. Overall in July, the value of home owner loans for house purchase accounted for 56% of gross lending, while remortgage activity accounted for 24%. The rise in the number of loans for house purchase in July was driven by both first time buyers and home movers. However, the increase in volume and value terms for home movers was much stronger than for first time buyers. This was the highest monthly lending level by volume since November 2007, and by value the highest monthly level since October 2007. Nevertheless, first time buyers took up 45% of total house purchase lending, which continues to make up a larger proportion of activity than pre-crisis levels when it made up as little as 30% of the number of loans for house purchases. Buy to let as a proportion of total lending was 18% in July. It was the highest monthly first time buyer lending level by volume and value since August 2007. The proportion of first time buyer gross household monthly income in July to service the capital and interest rate payments of their mortgage rose slightly from 18.3% in June to 18.5%. This is still lower than in July 2014 when it was 19.5%, and much lower than… Continue reading
