Dubai
Builders welcome UK govt plan to commission new homes
The UK Government, which has announced that it will directly commission the building of thousands of new homes, is being urged to offer small sites for the plan. According to the Federation of Master Builders the availability of small sites is the greatest barrier currently faced by SME house builders when it comes to delivering new homes and it hopes the building of 13,000 new homes on public land will alleviate the problem. ‘The Government clearly recognises that we need to bring more small house builders back into the market if we have any hope of addressing the housing shortfall. Directly funding developments on publicly owned land, with planning permission already granted, should encourage growth of smaller builders and new entrants into the market,’ said Brian Berry, chief executive of the FMB. ‘The public land that is being made available through direct commissioning must be broken down into small and micro plots wherever possible. As the Housing Minister himself has recognised, the smaller the site, the quicker it will get built out,’ he explained. ‘If the Government wants to truly tap into the potential of SME house builders, it should bring forward a wide range of packages of land, including those attractive to the smallest of developers, thereby improving both capacity and speed of delivery,’ he pointed out. ‘As positive as this development is however, it remains only one piece of the jigsaw. The on-going skills shortage is as pertinent for local firms as it is for larger contractors. We desperately need more skilled tradespeople in the industry, otherwise even supportive plans such as those announced today will be challenging for builders to deliver. Boosting apprenticeship training among construction SMEs will be crucial to this,’ he added. The move has been welcomed by the Home Builders Federation (HBF) but it added that allowing smaller builders to access publicly owned sites must be part of wider set of measures to assist SME builders and get more 'players on the pitch'. ‘Increasing the amount of developable land with planning permission is essential if we are to increase output further. Bringing forward public land more quickly has long been a priority for successive Governments, so concrete measures to achieve this are welcome,’ said executive chairman Stewart Baseley. ‘Direct commissioning will only be successful if it speeds up the release of public sector land and results in more house building than would have happened using the more traditional methods of public sector land disposal,’ he added. He also pointed out that a lower risk model could allow larger builders to increase their output still further, while also enabling smaller house builders to increase output and both have an essential role to play. It is not a question of either/or. ‘We desperately need to increase supply even further and faster than the current rate of increase, and speeding up delivery of public sector sites can play an important role in achieving this. In addition, if Starter Homes… Continue reading
UK experiencing a crisis in supply of homes for sale
There are 10 buyers for each property for sale in the UK as the supply of homes on the market has fallen again, reaching crisis level according to estate agents. At the same time sales to first time buyers fell in November even although the number of house hunters increased, the latest monthly report from the National Association of Estate Agent (NAEA) shows. After a promising period from July to October in which the number of sales made to first time buyers grew, in November, the percentage of sales made to the group fell by 10%, it also shows. Sales as a whole were down by 1% and while this is typical of this time of year sales to first time buyers are down dramatically and estate agents believe it will only get worse. The Chancellor George Osborne outlined plans to help first time buyers get on the housing ladder during his Autumn Statement but over half, 53%, of NAEA members think the group will continue to feel squeezed out of the market, due to the lack of affordable housing. The lack of supply and growing demand for housing continued to drive the market in to the ground, as the number of house hunters grew by 20% and available stock fell. In October, there were 336 house-hunters on average registered per branch, rising to 403 in November. The report also points out that available housing decreased marginally in November, from 43 properties managed per branch last month, to 41 this month meaning there are now 10 prospective buyers battling it out for each property. ‘It’s very normal at this time of year that demand is high and supply is low. House hunters hoping to find their dream property in the New Year have registered interest with agents, whilst those hoping to sell are holding off putting their properties on the market before January. However, supply is outweighing demand so heavily now that it can’t solely be attributed to seasonality,’ said Mark Hayward, NAEA managing director. ‘It’s clear that we’re faced with a crisis here and the housing market needs addressing as a matter of urgency. Our recent Housing 2025 report compiled with Association of Residential Letting Agents (ARLA) and Centre for Economics and Business Research (Cebr) found that by 2025, house prices are set to rise by 50% – and if we don’t act now, this will impact first time buyers, second steppers and last steppers, forcing many out of home ownership,’ he explained. ‘The Government has made efforts to address the issue of supply and demand, with Osborne outlining plans to build 200,000 new starter homes in his Autumn Statement, but four fifths of our agents think it simply isn’t enough. It’s all very well planning to build houses, but we need to move to action and get and the bricks and mortar on the ground, if… Continue reading
Income producing potential of UK property set to top the agenda for investors in 2016
The income producing potential of various property asset classes is expected to be top of investors’ agendas in 2016, according to a new outlook analysis report. Average UK house prices are set to rise 5% in 2016, but the speed and timing of interest rate rises will dictate the pace and sustainability of price growth, according to the predictions from real estate advisors Savills. In the commercial market, average total returns on UK property investments are likely to slow to approximately 7.5% while in the agricultural market Savills has downgraded its forecasts for the next five years given recent market evidence and the short to medium term expectations for commodity prices and therefore farm profitability. The firm says that income and the ability to unlock the latent value of individual assets through active management are likely to be priorities, due to the current stage of the property cycle and the medium term prospect of interest rate rises, regulation and tax policy in the residential sector, and the outlook for commodity prices in the agricultural sector. In the commercial and residential markets Savills expects a shift towards investment in regional markets, given where recent capital growth has left yields. The referendum on membership of the European Union (EU) presents the greatest uncertainty for UK real estate in 2016/2017, according to Savills, as the outcome has potential implications for all three sectors. The prospects for a pre-referendum investment slowdown may well depend on how close polling companies believe the outcome will be, the report suggests. The report explains that annual house price growth stood at just 3.9% at the end of October, with annual housing transactions appearing to have peaked at 1.2 million per year so the forecast for 2016 is 5% for average UK house prices. It points out that stamp duty changes have left the top end of the London market looking both fully priced and fully taxed suggesting a further delay in the return to trend rates of house price growth. Meanwhile, the mainstream market is more dependent on what happens to the cost of borrowing. ‘Capacity exists for short term price growth if rate rises are delayed further, but rising interest rates will squeeze affordability, making house price growth dependent on earnings and the pace of economic growth,’ the report says. It adds that in some areas in London, for example Ealing, Acton, Greenwich, Lewisham and Waltham Forest, may buck this trend as they attract more affluent buyer groups. Attractive commuter towns will also continue to offer good medium term price growth, particularly where travel times are shortened by rail improvements. Also demand for private rented accommodation will continue to rise. The restriction in tax relief and additional 3% stamp duty charge for buy to let landlords may result in rising private rents and shift investor focus towards higher yielding sectors of the market, particularly key regional cities, it suggests. While Government policy… Continue reading
