TSI
Record number of homes with planning permission not yet built in England
A record 475,647 homes in England which have been given permission to be built have yet to be built, a new study has found, but says that the planning system is not to blame. Figures released by the Local Government Association from research carried out by industry experts Glenigan, shows this bumper backlog has grown at a rapid pace over the past few years. In 2012/2013 the total of unimplemented planning permissions was 381,390 and in 2013/2014 it was 443,265. The LGA said that the figures underline the need for councils to be able to invest in building more homes and also for the skills shortage affecting the construction industry to be addressed. Council leaders also want powers to charge developers full council tax for every unbuilt development from the point that the original planning permission expires. The LGA, which represents more than 370 councils in England and Wales, also revealed that developers are taking longer to complete work on site. It now takes 32 months, on average, from sites receiving planning permission to building work being completed, some12 months longer than in 2007/2008. The number of planning applications being granted planning permission in 2014/2015 was 212,468, up from 187,605 in 2007/2008 and is higher than all previous years and the data shows that councils still approve nine in every 10 applications. The research also points out that while the construction industry's forecasted annual recruitment need is up 54% from 2013, there are 10,000 fewer construction qualifications being awarded by colleges, apprenticeships and universities. Indeed, there were 58% fewer completed construction apprenticeships last year than in 2009. ‘These figures conclusively prove that the planning system is not a barrier to house building. In fact the opposite is true, councils are approving almost half a million more houses than are being built, and this gap is increasing,’ said Peter Box, LGA housing spokesman. ‘While private developers have a key role in solving our chronic housing shortage, they cannot build the 230,000 needed each year on their own. To tackle the new homes backlog and to get Britain building again, councils must have the power to invest in building new homes and to force developers to build homes more quickly,’ he explained. ‘Skills is the greatest barrier to building, not planning. If we are to see the homes desperately needed across the country built and jobs and apprenticeships created, councils must be given a leading role to tackle our growing construction skills shortage, which the industry says is one of the greatest barriers to building,’ he pointed out. ‘Devolving careers advice, post age 16 and adult skills budgets and powers to local areas would allow councils, schools, colleges and employers to work together to help unemployed residents and young people develop the vital skills to build. New homes are badly needed and councils want to get… Continue reading
Buy to let landlords in UK well placed to cope with an interest rate rise
Buy to let landlords in the UK are financially resilient and are well placed to cope with expected higher borrowing costs, according to a new survey. Asked how they would deal with a 1.5% rise in Bank rate, three quarters foresaw no problems in paying their mortgage, says the data from the YouGov survey. More than 60% said their rental income would remain higher than their mortgage payments, and 40% said they already had enough money to cover higher borrowing costs. Meanwhile, according to data from the Council of Mortgage Lenders (CML) lenders have increased the average rate at which they stress test buy to let mortgages and after a strong first quarter, the CML expects buy to let purchases to decline in 2016 but buy to let remortgaging to remain robust. According to the transactional data collected by the CML from lenders accounting for about 90% of new lending, the typical stressed mortgage rate being used by the industry has increased by 50 basis points to between 5.6% and 5.7% over the past year. According to Bob Pannell, CML chief economist, while this is still some way from the rates implied for lending to home owners, a more forced pace of adjustment would risk destabilising the buy to let sector. He also pointed out that landlords identify a range of strategies for coping with higher mortgage costs, including the positive cash flow that rental payments currently provide and ready access to contingency funds. But he also pointed out that a number of tax measures have been announced in recent months, and these are likely to have a dampening effect on future growth prospects for buy to let and the private rented sector. ‘The reduction of tax reliefs available to private landlords from 2017/2018 onwards, announced by the chancellor in the summer 2015 Budget, will adversely affect the future cash flows for affected landlords,’ said Pannell. ‘Landlords should be able to mitigate the direct financial impact in a number of ways. Indeed, the YouGov research corroborates our view that the overall impact will be to lift rents higher and to narrow the availability of homes in the private rented sector,’ he explained. ‘The direct effects appear modest, but are likely to be reinforced by the stamp duty changes, announced in the chancellor’s autumn statement. The rapid succession of recent tax changes also risks having a significant indirect effect on investor sentiment, altering the direction of travel for buy to let lending and the further expansion of the private rented sector,’ he added. The CML’s latest market forecasts envisage house purchase activity by buy to let landlords falling away over 2016 and 2017. Given the significant lags in government housing initiatives stimulating additional housing supply, this raises a question about the future availability of rental accommodation in the face of ongoing demographic pressures. ‘In this context, macro-prudential intervention, if or when it is applied to buy to let lending, carries a significant risk of unintended consequences… Continue reading
Property market in Cyprus is stabilising but recovery unlikely yet in coming months
Residential property prices in Cyprus appear to be stabilising but experts are divided on how the market will pan out over 2016. The most up to date figures from the Cyprus Central Bank’s index covering the third quarter of 2015 shows that prices fell by 0.3%, consistent with the 0.4% and 1% falls during the previous quarters. Year on year prices are down 3.7%, an improvement on the previous quarterly fall of 5% and a breakdown of the figures suggest that apartment prices in some locations, most notably Limassol, Larnaca and Paphos are rising, a further sign of stability in the market. The biggest fall in prices quarter on quarter was in Famagusta with a decrease of 1.6%, followed by Nicosia down 1.3% and Limassol down 0.1%. While prices in Larnaca and Paphos rose by 1.2% and 0.2% respectively. Apartments are showing signs of more resilience. While quarter on quarter apartment prices fell 1.5% in Famagusta and 0.6% in Nicosia but increased by 2.1% in Limassol, 1.5% in Paphos and 0.3% in Larnaca. According to Daryl Fitzgerald, director of Fitzgerald Estates Agency in Paphos, pointed out that sales are also improving. They increased by 64% in Nicosia, by 30% in Paphos, and by 28% in Limassol in October. But fell by 1% in Larnaca. He pointed out that the statistics show that 96% of total property sales in Nicosia were registered to Cypriot nationals whilst only 4% were bought by overseas buyers, suggesting that international buyers are not yet coming back to the market in the city. But in Paphos, which has the largest number of holiday homes registered to overseas owners in the whole of Cyprus, there has been a 103% increase in sales to Cypriots in October. ‘From the brink of the financial and banking abyss, Cyprus is steadily emerging a stronger economy and a stronger nation. The financial restrictions are but a memory, our banks have been upgraded and almost given a clean bill of health, the title deeds issue is being dealt with and the buyers have more and more tools to fight the good fight to get the deeds,’ said Fitzgerald. He believes that what is happening in Paphos is interesting as it was the centre of the property bubble on the Mediterranean island. ‘The sudden interest by Cypriot buyers signals that the prices have reached bottom and are stabilising. Cypriots know this and are taking advantage of this once in a lifetime opportunity,’ he explained. However, the latest report from Resolute Asset Management in Cyprus suggests that 2016 is not set to see a revival of the real estate market. It says that while sales increased by 9% in the first 11 months of 2015 compared to the same period in 2014, compared to 2007 sales are still down by 79%. The firm believes that sales volumes will remain low in 2016. Its report suggests that foreigners who are tempted to buy in Cyprus will be concentrated on… Continue reading
