Investment
UK govt puts public land up for sale for new home building
The UK Government has published details of 600 acres of surplus public sector land for sale as part of its drive to see tens of thousands of new homes built across the country. Housing Minister Brandon Lewis urged developers to seize the opportunity and look at the sites via the Homes and Communities Agency (HCA). Some 80 public land sites are now for sale and there will be 40 more over the next 18 months. It is estimated these sites will support more than 5,000 homes as well as land for industry and business. Over 20% of the sites already have outline or detailed planning permission. Lewis pointed out that the Government has embarked on the largest house building programme since the 1970s and said that some 160,000 new homes should be built through the sale of surplus public sector land. ‘Using surplus public sector land for housing has helped us get the country building again with the number of new homes up by 25%. Selling off these sites will allow us to go even further, delivering on our ambition to support a further 160,000 homes, while providing a significant boost to local economies and the taxpayer,’ he said. ‘I now want to see developers getting shovels in the ground as quick as possible and build the homes hard working people want and deserve,’ he added. The HCA is the government’s disposal agency for surplus public land, and using its local market knowledge, commercial expertise and experience of managing large portfolios of land, exceeded its contribution to the government’s last land programme by more than 3,000 homes. In total, Whitehall departments released enough public sector land to support more than 109,000 homes during the last parliament, Lewis also pointed out. ‘The sale of surplus public land helps to meet government priorities to build more homes and business premises, while delivering a financial return to the taxpayer,’ said HCA chief executive Andy Rose. ‘We will use our commercial expertise and local market knowledge to make land attractive to house builders, to help get homes built more quickly and meet local priorities. As the government’s disposal agency for surplus public land, we are well placed to support other departments and agencies in meeting their contribution to the government’s land programme,’ he added. A new Land Development and Disposal Plan sets out some key principles of land disposal, which followed a review of the HCA’s processes and were developed in cooperation with the Home Builders Federation and its members. These include clearer objectives for each site prior to sale, early and meaningful market engagement with a transparent pipeline of sites and clearer commercial terms. ‘Public sector land accounts for a significant proportion of potential residential land and can play an important part in helping the country to boost housing numbers,’ said David O’Leary, policy director at the Home Builders Federation. ‘The role of the HCA is critical in helping the government to meet its ambitious targets for releasing public land for… Continue reading
UK lettings agents see surge from buy to let landlords ahead of April tax change
New tenants and rental housing supply fell in the UK in December but agents are seeing buy to let investment demand rise ahead of new tax changes. Overall the number of prospective tenants in the private rental sector dropped 15% last month with agents registering an average of 29 per branch, down from 34 in November. The data from the monthly report from the Association of Residential Letting Agents (ARLA) also shows that a quarter of agents saw an uplift in buy to let investments as landlords rush to get in before the April stamp duty change deadline. It also points out that letting agents expect to see decline of buy to let properties once the extra 3% stamp duty is charged from April. Supply also decreased marginally in December, with an average of 182 properties managed per branch, down from 189 in November. Those looking for rental properties in London in particular continue to struggle, with an average of just 108 properties managed per branch, some 43% less than the national average. Alongside supply and demand, the number of tenants seeing rent hikes also dropped in December with 18% of ARLA letting agents reporting a growth in rent, a drop of 5% compared to November and the lowest reported in 2015. ‘As we’d expect in December, the UK saw a lull in activity, with people putting off any moves until January. The supply of housing stock was down, and fewer tenants were on the hunt for new properties,’ said David Cox, ARLA managing director. ‘It’s reassuring to see the number of agents reporting rent increases is still on the decline, which is some encouraging news for tenants as we start 2016,’ he added. The stamp duty reforms to buy to let properties are causing concern amongst ARLA letting agents. Some 62% of agents predict that the changes from April will push up rent costs, and a further 65% predict the new reforms will push landlords out of the market after April, and decrease supply. However, the announcement is already having an effect on landlords as 24% said that they have seen uplift in interest from buyers looking to invest in buy to let properties before the new changes come into play in April. ‘Buy to let landlords determined to complete purchases before the changes come into force in April are storming the UK housing market, meaning the lull we’d usually see is less significant,’ Cox explained. ‘But subsequently, after April, we’re very likely to see the number of buy to let properties on the market begin to decrease, and this will most certainly have a detrimental effect on renters across the country,’ he added. Continue reading
US residential rents set to slowdown in 2016
Residential rent growth in the United States is expected to level off over the next 12 months, slowing to an annual rate of 1.1% by December 2016. The average at the end of 2016 is projected to be $1,396 compared to $1,381 in December 2015, according to the latest rent forecast from real estate data firm Zillow. The firm is forecasting a decrease in the rate of rental appreciation amid a rental affordability crisis that has renters in some markets spending almost half of their income on rent. Some of the fastest growing metros had double digit annual rental appreciation at the end of 2015 and Zillow expects rental appreciation to slow down most significantly in Nashville, San Francisco, Portland and Denver. Rents in San Francisco saw a 12.5% rise in 2015 and the Zillow forecast is for growth in San Francisco to be 5.9% in 2016, half as fast as in 2015. Even with the slowdown, rents will remain unaffordable in many of the major markets across the US, especially on the West Coast. Renters in San Francisco and Los Angeles can expect to spend 40% of their income on a rental payments. ‘Hot markets are still going to be hot in 2016, but rents won't rise as quickly as they have been. The slowdown in rental appreciation will provide some relief for renters who've been seeing their rents rise dramatically every single year for the past few years. However, the situation remains tough on the ground and rents are still rising and renters are struggling to keep up,’ said Zillow chief economist Dr. Svenja Gudell. She pointed out that the slowdown in rental appreciation indicates that supply of new multi-family homes is catching up to demand. Substantial new housing supply is becoming available in Atlanta, Denver, Portland, Seattle, and other markets. Continue reading
