Investment
Views sought on UK Government’s Starter Home regulation
The UK government is seeking views on regulations surrounding its flagship Starter Home programme in England and has issued a consultation document. Under the regulations, which will form part of the Housing and Planning Bill, the government plans to allow build to rent developers to build Starter Homes off-site. ‘We propose that private rented sector developments could contribute to starter home provision and the requirement should be met through an offsite contribution for delivery of starter homes,’ the consultation document says. Overall it proposes a new statutory framework for Starter Homes that will include a general duty on local planning authorities to promote the supply of Starter Homes when carrying out their planning functions. The Bill would include a clause that sets a Starter Home requirement which means that local planning authorities may only grant planning permission for residential developments if the Starter Homes requirement is met. There would be reporting arrangements to ensure local communities, and especially first time buyers, are aware of what action local planning authorities are taking to support the delivery of starter home; and powers for the Secretary of State to intervene if local planning authorities fail to carry out their functions related to Starter Homes. ‘We are taking forward ambitious measures to increase the supply of housing and improve prospects of home ownership for many. We aim to deliver one million new homes to boost housing supply significantly. We want to ensure young people are not denied that which their parents took for granted, the opportunity to buy their own home, settle down and enjoy the security that home ownership brings,’ said Housing and Planning Minister Brandon Lewis. ‘That is why we have committed to building 200,000 high quality Starter Homes exclusively for young first time buyers under 40, to be sold at a minimum of 20% below the open market value. We want to see Starter Homes built on housing sites across the country,’ he explained. ‘The Housing and Planning Bill sets out the statutory framework for the delivery of Starter Homes, and will be supported by changes to national planning policy,’ he pointed out. The Government has already announced a £2.3 billion funding package to support the delivery of up to 60,000 Starter Homes. Of this funding £1.2 billion will, in the first instance, be made available to remediate or assemble brownfield land to deliver at least 30,000 Starter Homes through the Starter Homes Land Fund. The technical consultation document seeks views on the details for the regulations to be made under powers contained in the Housing and Planning Bill, including options for the Starter Homes requirement on reasonably sized sites. ‘We want to hear views so the resulting regulations are feasible, proportionate and effective. I am confident that these reforms will help a generation of young people into home ownership,’ Lewis added. The British Property Federation has been calling for build to rent developments to be exempt from providing an on-site Starter Home provision throughout the… Continue reading
Nonstandard UK home borrowers now more likely to get a loan
More mortgage borrowers are seeing their applications for mortgage loans given the green light as new products emerge to support ‘non-standard’ circumstances, according to new research. Some 26% of brokers reported having no problems sourcing a mortgage for any type of borrower in the second half of 2015, the highest proportion in the post Mortgage Market Review (MMR) era, and a clear sign of improving lending conditions. According to the Intermediary Mortgage Lenders Association (IMLA) report it represents a significant jump from the proportion of brokers experiencing no problems both in the first half of 2015 when it was 15% and the second half of 2014 when it was 16%. However, some areas beyond the ‘mainstream’ mortgage market have been less well-served since 2008/2009, with new regulations introduced to govern lending criteria and fewer products on offer tailored to meet the needs of smaller and less mainstream consumer segments. This includes products to support borrowers seeking lending into retirement, products designed for borrowers with past adverse credit records, and those tailored for self-employed borrowers or those with irregular incomes. However, the IMLA’s research shows fewer brokers are now experiencing problems with sourcing a mortgage for clients in all of these areas, with the most significant improvement seen in sourcing loans for interest only borrowers. The proportion of brokers having difficulties helping this type of client has fallen 15 percentage points year on year to 39%. Similarly, the proportion of brokers unable to source a mortgage for ‘lending into retirement’ borrowers has dropped seven percentage points to 43%. The picture has also improved for self-employed borrowers, with just 40% of brokers reporting problems over the last six months, down six percentage points from a year ago. The most common circumstances where brokers were unable to source mortgages in the second half of 2015 continue to be adverse credit at 46%, lending into retirement at 43%, self-employed at 40% and interest only borrowers at 39% although in each case, the picture has improved. The report points out that these product types are becoming increasingly important, in context of the changing UK demographic. More first time buyers are taking out mortgages with longer terms to spread out their repayments, with 60% now opting for terms that last more than 25 years, meaning more borrowers could be left paying off their debt in retirement. Meanwhile the trend towards more working flexibility alongside sluggish wage growth has boosted self-employment levels in the UK, and 15% of the workforce are now self-employed. Looking ahead, both lenders and brokers identify first time buyers as the market area with the best overall growth prospects for 2016, ahead of other segments. However, when asked about the prospects for product availability, IMLA’s research suggests further improvements could be on their way for other borrower types. More than half of lenders forecast an improvement in mortgage availability for retirement borrowers, near prime borrowers, those who are self-employed or with irregular incomes, and interest… Continue reading
Miami residential property market prices still growing
Residential property in Miami, one of the most popular locations with overseas buyers in the United States is seeing prices continue to rise, the latest index figures show. The median sales price for single family existing homes rose 10.3% year on year in February to $270,221 while that for condominiums increased 9.5% to $206,950, according to the data from the Miami Association of Realtors. However, median prices are still significantly below their peak in 2007 and currently remain around 2004 levels despite some sectors seeing strong growth. For example the condo market has recorded prices rises in 56 of the last 57 months. ‘Miami real estate remains a bargain especially compared to other world class cities, and domestic and international consumers proved that in February as total dollar sales volume in single family homes increased 7% compared to the previous year,’ said Mark Sadek, chairman of the association’s board. Sales, which posted a record year in 2013 and near record years in 2014 and 2015, fell by 5.8% year on year but total sales for February remain in line with Miami historical averages. A breakdown of the figures shows that single family home sales fell by just 0.3% in February while condo sales fell by 10.4%. The index report suggests that this is due to a strong new home construction market. Single family home sales spiked 18.5% year on year in February in the $200,000 to $600,000 sector which represented about 59.6% of all total single family home sales in February 2016. Existing condos priced at $150,000 to $300,000 range experienced an 8.6% jump in February sales, representing about 38% of all total condo home sales in February 2016. The median number of days between the listing and contract dates for Miami single family home sales decreased 6% year on year to 63 days. The median number of days between the listing date and closing date for single-family properties decreased 0.8% to 120 days. For condos, the median time to contract decreased 12% year on year to 72 days. The median number of days between the listing date and closing date decreased 2.4% to 122 days. Miami real estate is selling close to listing price. The median percent of original list price received for single family homes was 95.2% in February 2016, an increase of 0.4%. The median of original list price received for existing condominiums was 93.8%, a 0.2% increase. Only 23.4% of all closed residential sales in Miami were distressed last month, including REO (bank-owned properties) and short sales, compared to 35% in February 2015. Short sales and REOs accounted for 5.7% and 17.8% respectively, of total Miami sales in February. Short sale transactions dropped 25.6% year on year while REOs fell 39.9%. Cash sales in Miami are still twice the national average and due to the high number of overseas buyers. Cash transactions comprised 52.4% of February total sales compared to 58.7% last year. Inventory of single family homes increased 4.7% in February while… Continue reading
