Investment
UK housing demand reaches 11 year high
Housing demand in the UK continues to growth, reaching an eleven year high in August, according to the latest monthly report from the National Association of Estate Agents. The number of house hunters registered per branch continued to grow this month, up 5%, to an average of 462 per branch compared to 439 in July. This is the highest recorded since August 2004, when an average 582 house hunters were recorded per NAEA branch. Available housing also increased in July, jumping 25% from an average of 44 properties available per NAEA member branch in June, to 55 in July. These levels have not been seen in almost two years, when 57 houses on average per branch were recorded in September 2013. However, the number of sales made in July remained static from May and June, with just nine per branch, indicating that although housing stock is starting to increase, it remains a struggle to complete a purchase. The July Housing Market Report also reveals that the number of sales made to first time buyers continued to fall in July, with the group now accounting for just 23% sales. This has fallen from 24% in June and 29% in May. However, it is an increase on last year, when only 20% of sales were made to first time buyers in July 2014. ‘Typically, we’d expect to see sales taking longer to complete during the summer months, as buyers and sellers are on holiday. It is alarming however, that the number of sales being made to first time buyers is steadily falling,’ said Mark Hayward, NAEA managing director. ‘Having said that, the fact that there is more housing coming on to the market means that hopefully over the next few months we’ll see activity in the market increasing and more sales completing, to respond to the growing army of house hunters we’ve seen emerging over the last few months,’ he pointed out. ‘The truth of the matter is though, there simply aren’t enough houses to meet growing demand, and until we see more physical bricks and mortar, there may be no hope in solving the housing crisis,’ he explained. ‘It’s also alarming that the number of sales being made to first time buyers is steadily falling; with reports of house prices increasing and expectations of rising in the future, first time buyers will continue to be pushed out of the market,’ he added. Continue reading
First ever rural plan in England will boost homes in villages
Villages and towns in England’s rural communities will be allowed to build starter homes for local residents as part of new plans set out by the government. Under the country’s first ever Rural Productivity Plan the law will be amended to allow Starter Homes to be built on Rural Exception Sites for the first time. This will allow local areas to allocate more sites for Starter Homes specifically for people who already live in the area, or have an existing family or employment connection to the area. It is part of a wide ranging plant to boost productivity and ensure the countryside becomes an even more attractive place for people to live, work, start a business and bring up a family. The plan points out that while a lack of housing is currently a national challenge, in rural areas it is a particular constraint to labour and entrepreneurial mobility, adding that the stock of housing is limited in rural areas relative to demand and house prices are on average 6.7% higher in rural areas than in urban areas. Under the plan the government will increase the availability of housing in rural areas, whilst protecting the Green Belt and countryside. This will include a significant contribution to the 200,000 Starter Homes already announced to be offered at a 20% discount for first time buyers under the age of 40. ‘Through the right combination of measures, the government wants to ensure that any village in England has the freedom to expand in an incremental way, subject to local agreement,’ the report says. Alongside the review of planning the aim is to ensure local authorities put local plans in place for housing according to agreed deadlines and require them to plan proactively for the delivery of Starter Homes. The government will also bring forward proposals to speed up the process of implementing or amending a plan and make it easier for them to establish a neighbourhood plan and allocate land for new homes, including through the use of rural exception sites to deliver Starter Homes. There will be a review the current threshold for agricultural buildings to convert to residential buildings and the introduction of a dispute resolution mechanism for section 106 agreements, to speed up negotiations and allow housing starts to proceed more quickly. Chancellor of the Exchequer George Osborne said that the aim is to create the right conditions for rural communities and businesses to thrive and this means investing in education and skills, improving rural infrastructure, and allowing rural villages to thrive and grow. ‘We’re connecting the countryside to make it just as simple to run a business from Cornwall as it is in Camden. But it’s not just about transport and technology. Our plan will help us create thriving towns and villages where generations of families can open and expand their businesses, buy a home and educate their children at first class schools,’ said Environment Secretary Elizabeth Truss. Communities Secretary Greg Clark that… Continue reading
Average rents in England and Wales reach over £800 for first time
Average residential rents in England and Wales hit a record high above £800 for the first time in July with the fastest month on month increase since records began in 2009. Rents peaked in Yorkshire and the Humber, East and West Midlands, and London, according to the data from the latest buy to let index from Your Move and Reeds Rains. On a monthly basis, rents across England and Wales rose by 1.9% to £804 in July, up from £789 the previous month and up 6.8% year on year, the largest annual rise on record. ‘Just when you think the rental market is accelerating at full throttle, it finds a way to shift into a higher gear. We’re seeing rent rises manage to hit record breaking speeds on both monthly and yearly time frames as far back as our data can go,’ said Adrian Gill, director of estate agents Reeds Rains and Your Move, . He explained that with house prices rising and demand outstripping supply in the sales market the demand for rental properties has also begun to outstrip the available stock and this is driving up rents even faster than house prices. ‘A clear and concerted effort towards new-build properties is the most sensible way to address this issue. It boils down to supply and demand. However, it’s not the only possible response. The government could also ensure that we’re making the most efficient use of our small supply of homes, for instance by doing more to make it easier for people to downsize their properties when they want to,’ he added. A regional breakdown of the figures reveals that four of the 10 regions of England and Wales saw record rent peaks in July; London, Yorkshire and the Humber, and the East and West Midlands while every region saw increases compared to last year. Stronger than usual improvements in the West Midlands saw rents rise 3.6% over the 12 months to July 2015, bringing the average rent in the region up to £583. It’s a similar story in the East Midlands, with a 2.5% annual increase carrying rents up to £584. Yorkshire and the Humber, by comparison, edged its way to a new record with a 2% year on year increase to £582 on average. Rents grew 12% on an annual basis in the East of England, to stand at £838 in July. Though it’s second only to London with growth of 12.1%, in terms of the speed of the 12 month improvement, this is actually the first time in 15 months that the rate of year on year rent increases has not accelerated. Only two regions saw falling rents on a monthly basis with a 0.1% month on month drop in Wales and the East of England. Though rents are at a peak, Yorkshire and the Humber saw a modest 0.3% monthly increase. London took the lead with a 3.3% month on month rental increase…. Continue reading
