Tag Archives: shows
UK govt announces changes to shake up house planning and get more homes built
A series of planning reforms announced today by the UK government aimed at boosting house building have been widely welcomed by the property and construction industries Under the changes planning permission will be granted automatically for homes on brownfield sites, even over ruling wishes of local authorities in England. But experts warned that councils will not like the move although they have been heavily criticised for not creating local plans and taking too long to make decisions. Ministers will also get powers to seize disused land which is suitable for houses and major housing projects are set to be fast tracked through the planning system. There will be penalties for local authorities that make 50% or fewer planning decisions on time in a bid to inject some speed into the planning process. The rules on extensions in London are to be relaxed in terms of building upwards to match neighbouring levels and the Mayors of London and Manchester are to get power over planning in their cities. The British Property Federation (BPF) said the changes have the potential to be an enormous boon to housing supply but it warned that some of the new measures will only work if the government addresses the severe shortage of funds within local authority planning departments. The BPF also urged the government not to over focus on providing new homes for sale and pointed out that there is also a need for more purpose built rental accommodation in order to combat the housing shortage and deliver a more balanced housing market. Melanie Leech, chief executive of the BPF, British Property Federation, called for a dialogue with both the public and private sectors on how to address the severe shortage of funds which is afflicting local planning departments. ‘The private sector will need to play a part in helping to address this funds shortage, and this needs to be explored fully if we want these new measures to work. We would also have liked to have seen some commitment to growing the purpose built rental sector, which has an important part to play in solving the housing crisis and creating a balanced housing market,’ she said. ‘We warmly welcome the government’s recognition of how a functioning and efficient planning system can contribute to the UK’s growth by creating not just new homes, but also the infrastructure that supports great places,’ she added. Leech explained that a lack of dynamism among local authorities on Local Plans should be addressed by the government being able to intervene. ‘Local Plans are fundamental to growth, and we are firm believers in a plan led system. There are still areas, however, without a Local Plan in place, and so we are pleased to see that government is taking steps to ensure that plans are delivered in a timely fashion,’ she said. ‘A number of recalcitrant local authorities have been dragging their feet and producing bloated local plans that are overly long and simply… Continue reading
UK house price growth reaches 11 month high, says RICS survey
House price growth in the UK increased again in June, reaching an 11 month high, according to the latest market report from the Royal Institution of Chartered Surveyors (RICS). It comes at a time when market supply is falling with the survey showing average stock of houses per surveyor has fallen to its lowest since RICS began collecting the data in 1978. The survey also reports that buyer demand has increased in all parts of the UK expect the South East despite a more cautious attitude from lenders. It is the second month in a row that demand has risen. RICS says that one reason for the slight recovery in buyer enquiries is likely to have been a further drop in mortgage rates which is accompanying the ongoing strength of the labour market. The data also shows that 41% more surveyors expect house prices to rise over the next three months, which is the highest proportion since April 2014 and 36% more surveyors expect sales to increase despite the broadly flat trend in newly agreed sales. Across the rental sector, the demand and supply imbalance is also visible and instructions, which have been broadly unchanged for the past couple of years and show no signs of a material increase, are at growing odds with the rising demand that is putting further upward pressure on rents. ‘Although much of the discussion about supply shortages has focused on the owner occupier market, the survey demonstrates in no uncertain terms that the issue, at least at a headline level, is just as visible in the rental sector. This is most clearly reflected in both the house price and rental projections over the medium term which comfortably exceeds the likely growth in wages,’ said Simon Rubinsohn, RICS chief economist. ‘There had been some hope that the removal of political uncertainty following the general election would encourage more properties onto the market but the initial indications are that this is not proving to be the case,’ he explained. ‘Additionally, the recent flat pattern of appraisals by respondents to the survey suggests this is not about to change anytime soon As a result, it is hardly surprising that prices across much of the country are continuing to be squeezed higher with property set to become ever more unaffordable,’ he added. According to Jeremy Blackburn, RICS head of policy, pointed out that the government has its sights set on a long term project to drive owner occupation and property owning but the monthly survey shows that it is not just in this area where there is a marked shortfall in supply. ‘Just as significant is the pressure that is clearly building across the rental sector, through which a large part of our population is housed. It is particularly important for the younger more mobile workforce that it is central to improving our economic productivity,’ he said. He also pointed out that the housing benefit cuts announced the Budget will push many… Continue reading
Warnings over impact of buy to let mortgage tax change announced in UK Budget
The UK property market is set to see a number of impacts as a result of a mini Budget announced in July aimed at stabilising the country’s economy. Perhaps the most controversial announcement by Chancellor of the Exchequer George Osborne was a cut in tax relief on mortgage interest payments for buy to let landlords which some believe will ultimately lead to higher rents. The Chancellor also, as expected, increased the rate at which inheritance tax will be paid on a home to £1 million and increased room rental tax relief to £7,500 per annum. Although phased in from 2017 to 2020, the buy to let tax change will make investment a less attractive proposition for landlords. Indeed, it will discourage investment in the sector which could lead to higher rents and less rental homes available, according to Graham Davidson, managing director of Sequre Property Investment. ‘This is an example of politicians not understanding how the market operates, directly contradicting their apparent goals for an improved private rented sector. Landlords should be free to deduct legitimate costs, just like any other business does,’ he pointed out. Gráinne Gilmore, head of UK residential research at Knight Frank, described it as ‘a significant change in tax status’ for those with a rental portfolio. ‘Those planning to purchase a buy to let property will have to factor these new rules into their calculations, and this could affect the offers they are willing to make,’ she said. 'If the relatively low yield environment seen today, especially in the South of England, is still evident when these changes start to come into force, there could be upward pressure on rents. The need for rental accommodation is strong, and we expect this trend to continue, especially in city centre markets around the UK,’ she added. Jamie Morrison, private client partner at HW Fisher & Company, believes it will lead to higher rents. ‘It will cause many landlords increasing pain which will quickly be passed on to tenants in the form of higher rents. Highly leveraged landlords could pull out of the market too, reducing the supply of rental properties and ratcheting up rents even further,’ he said. According to Russell Quirk, chief executive officer of online estate agent eMoov, landlords are going to be up to 20% worse off as previously enjoyed tax relief rates of up to 45% disappear. ‘Based on the average rent they could be up to £2,000 worse off each year. I can only see the result being an increase in rental prices which in turn further hampers those trying to save to get on the property ladder,’ he explained. Henry Woodcock, Principal Mortgage Consultant at IRESS, pointed out that buy to let has been the key area of growth in the mortgage market and changing its tax treatment is likely to dampen mortgage activity and demand from property investors, which will hit overall lending figures. ‘Equally, we may see a number of landlords leave the… Continue reading
