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UK housing supply halves in 10 years and first time buyers still struggle
The supply of available housing to buy in the UK has almost halved in 10 years and first time buyers are still struggling to get on the housing ladder, according to estate agents. The average number of properties available per branch in December 2015 fell to 37 properties, the latest housing market report from the National Association of Estate Agents (NAEA) shows. It is the joint lowest figure for 2015 with September, and almost half the number available in December 2005 when there were an average 72 houses per branch. There were 45 houses available in December 2014. While the number of house hunters registered per branch fell to 374 in December from 403 last month, an expected seasonal trend, the number of house hunters per branch has gradually increased year on year. In December 2014, there were 360 potential buyers registered at each branch, up from 302 in December 2005. Low supply affected the number of sales in December, as NAEA members reported an average of seven sales per member branch, an expected seasonal dip, and the lowest recorded in 2015. ‘Whilst we expect figures for supply and demand to be seasonally low in December, 2015 overall does not paint a positive picture for the housing market. Supply of housing is half of what it was 10 years ago,’ said Mark Hayward, NAEA managing director. ‘Yet the number of home buyers on the books has been gradually increasing. When there is such a huge and widening gap between supply and demand, a level playing field seems further out of reach for many would be house buyers,’ he added. The report also suggests that the Government’s recent efforts to help first time buyers enter the property market such as Help to Buy and plans to build new starter homes are yet to take effect. The number of sales to first time buyers stands 24%, a 2% drop from December 2014. It also reveals that the recent 3% increase to stamp duty on buyers’ second properties has created movement in the market. Some 44% of NAEA agents have seen an increase in house buyers trying to beat these reforms, and snap up their properties before they come into force in April. ‘The issue of lack of supply needs to be solved, but it isn’t going to be done anytime soon. We are still waiting to see new homes being built and whilst we wait, house prices continue to rise,’ said Hayward. ‘There is some potential light for first time buyers however, once the new tax rate increase in April is in place we may see less investment from buy to let or second home investors, which may mean less competition for first time buyers,’ he added. Continue reading
Rental prices in Scotland increased at end of 2015, latest index shows
There was a last minute end of year surge in Scottish rent growth with average residential rents up 0.4% in December, the highest monthly rise since June, the latest index report shows. This was uptick from a modest 0.1% rise the previous month and took the average monthly rent in Scotland to £548, just £1 below the summer peak reached in July, according to the data from lettings agent network Your Move. On an annual basis, rent growth is also starting to accelerate. Year on year rent rises had been steadily slowing since June when they stood at 3.1% but Scottish rents are now on average 2.2% higher than a year ago, up from 1.4% in the 12 months to November. The rise is due to a shortage of supply and an improvement in wages means that tenants can afford the rents, according to Brian Moran, lettings director at Your Move Scotland. ‘Outside of the summer months, the New Year often sees the second biggest cycle of new tenancies, and ushers in a busy time for the lettings market. It’s the period where people typically take up fresh career opportunities, and implement new life changes and this wave is already evident in the uptick of rents over November and December, as savvy tenants act quickly to beat the January rush,’ he explained. He pointed out that one major factor likely to affect the market in 2016 include the extra 3% property tax on buy to let properties from April. ‘It is likely to distort the natural flow of the market, with any further buy to let investment likely to be front loaded into the early months of the year. Once that deadline passes, and if investment into the private rented sector becomes more hesitant, tenants’ rents may become much more exposed to the problem of supply,’ added Moran. A breakdown of the figures show that in December, three of five regions saw month on month rent increases. The South saw the biggest with average rents rising 1.3% while Edinburgh and the Lothians saw a rise of 0.7% and Glasgow and the Clyde up by 0.5%. The Highlands and Islands saw the most significant monthly fall in rents in December with a fall of 0.9% while in the East of Scotland they fell by 0.3% month on month. On an annual basis, rents are higher across four of the five regions of Scotland. The biggest rise was in the Highlands and Islands with rents up 4.9%, Edinburgh and the Lothians they increased 4.8%, in Glasgow Clyde rents were up by 0.2% and in the East of Scotland rents dropped 0.7%. The report also shows that while there is typically a seasonal spike in arrears around the Christmas period, tenant arrears in Scotland dropped for the second month in a row in December, with the proportion of rent in arrears falling to 11.9% of… Continue reading
New pilot scheme starts in UK as part of Right to Buy scheme
Housing association tenants in some part of the UK can now move towards home ownership under new government plans to extend their right to buy. They are the first in the country to be able apply to the new Voluntary Right to Buy scheme as part of a pilot that is being run by five housing associations ahead of a national rollout later this year. It is part of a voluntary agreement between the government and the National Housing Federation to extend the Right to Buy to 1.3 million housing association tenants. Under the agreement, every home sold will be replaced nationally with a new affordable home. The existing Right to Buy gives social housing tenants the opportunity to buy their home with a discount of £103,900 in London and £77,900 elsewhere. ‘Thanks to the historic voluntary agreement with the sector a further 1.3 million housing association tenants now have the chance to open the door to their own home, starting with this trailblazing pilot scheme,’ said Communities Secretary, Greg Clark. He explained that the pilot will help inform the design and implementation of the main scheme before it is rolled out across the country following the passage of the Housing and Planning Bill. Applications for the pilot scheme are now open. He added that the government is committed to getting a million more people into home ownership by 2020 and it has recently been announced that investment in housing is doubling to more than £20 billion over the next five years to support the largest housing programme by any government since the 1970s. Continue reading
