TSI
UK govt announces review to cut red tape for home builders
House builders in the UK are to have their say on red tape in the industry and how ineffective rules are hampering them from building more homes. The government has announced a Cutting Red Tape review which aims to uncover the issues that have the biggest effect on house builders and also wants to gather the views of smaller firms to understand the unique pressures they face. Ministers said that the wide ranging review will capture the experiences of all those involved in building homes, including developers, planners and trade associations. ‘This review will give house builders and smaller construction businesses a powerful voice as part of our £10 billion deregulation drive. Where rules are too complicated, ineffective or poorly enforced, I want to hear about it and the government will take action. Together we can cut red tape and get Britain building,’ said Business Secretary Sajid Javid. He pointed out that previously the Housing and Construction Red Tape Challenge delivered significant reforms and led to a review of local housing standards by the Department for Communities and Local Government. Housing Minister Brandon Lewis said he is determined to remove barriers faced by house builders to ensure more homes can be built to help reach the recently announced new targets for home building. ‘We want to hear the views of firms big and small so we can remove unnecessary red tape and help house builders do what they do best, building the homes we need,’ he added. He explained that the key starting points for the review are based on the priorities raised by the Task Force which include roads and infrastructure rules for new housing developments and environmental requirements, particularly European Union rules such as the Habitats Directive and wider EU environmental permit requirements. It will also look at rules that affect utilities such as electricity, gas and water as well as broadband infrastructure, and the government is also keen to look at the changes made to the Construction, Design and Management Regulations, as well as any examples of EU rules that are being implemented too strictly. John Allan, national chairman of the Federation of Small Businesses, said that the government is right to listen to the needs of smaller businesses. ‘In the 1980s, smaller house builders delivered around two thirds of our new homes. Today, it is less than a third. If the government can encourage small firms back into house building, that would be a major step towards meeting this country’s housing needs,’ he explained. ‘The new Cutting Red Tape review will look at the way the law is enforced, as well as whether the rules themselves are proportionate and fit for purpose. The responses from house builders will lead to government taking concrete steps to remove burdens on business,’ he added. The announcement was also welcomed by Stewart Baseley, executive chairman of the Home Builders Federation. ‘As the industry looks to drive further increases in housing supply we welcome moves to reduce… Continue reading
Uncertainty in financial services sector affecting prime London rental values
Rental values in prime central London declined for the second month in a row in November against the background of continued uncertainty in the financial services sector and a seasonal end of year decline in demand. Values fell 0.3%, which meant annual rental value growth dipped to 1.2%, which is the lowest level since August 2014, while rental yields were flat at 2.95%, according to the latest report from real estate firm Knight Frank. It follows a peak of 4.2% in May this year as a degree of demand moved across from the sales market due to uncertainty over taxation and the general election. ‘Since then, nervousness surrounding global economic events including the slowdown in China means that many companies have reigned in relocation budgets and many banks continue to cut headcount as part of restructuring plans,’ said Tom Bill, head of London residential research at Knight Frank. ‘Furthermore, stock levels have risen as more owners adopt a wait and see approach to pricing trends in the sales market, which has tipped the balance in the favour of tenants and put downwards pressure on rents,’ he pointed out. ‘The result is that the number of tenancies started has dropped since 2014, though remains above the level two years ago. Demand, in the shape of new prospective tenants and viewings, is also down compared to what was a relatively strong 2014, though both remain above 2013 levels,’ he added. He also pointed out that demand remains strong in lower price brackets and at the super prime level of above £5,000 per week amid uncertainty around taxation including recent changes for buy to let investors and second home purchases. ‘The result is a three speed market where demand is stronger in higher and lower price brackets than it is in the middle,’ Bill explained. ‘The changes announced by Chancellor George Osborne mean that buy to let investors and those purchasing second homes will be subject to an extra 3% on the rate of stamp duty from April 2016, which could lead to fewer rental properties, which would put upwards pressure on rental values,’ he added. Continue reading
UK house price growth set to slow in 2016, latest outlook report suggests
House prices in the UK are expected to see growth slow to 4% to 6% due to the increasing difficulty in getting on the housing ladder, together with the prospect of an interest rate rise, according to a new report. The forecast from lender the Halifax comes after a year when activity levels have remained modest by historical standards. A shortage of supply is likely to continue to act as a significant constraint on activity in 2016, it says in its outlook report. Price growth is expected to slow more sharply in London than elsewhere but all regions are expected to experience price rises in 2016 which will be broadly in line with income growth. The report points out that levels of house building remain low, but improvements are expected over the medium term and this would help to bring demand and supply into better balance, helping to constrain upward pressure on house prices. ‘There is little reason to expect any fundamental shift in the key market drivers in the immediate future. As a result, the substantial imbalance between supply and demand is likely to persist, maintaining upward pressure on house prices in 2016,’ said Halifax’s housing economist, Martin Ellis. ‘On average, UK house prices look expensive compared to incomes but valuations are supported by the low levels of property for sale, low levels of house building, and exceptionally low interest rates,’ he explained. ‘Nonetheless, with house prices continuing to increase more quickly than average earnings, it is increasingly difficult to get on the housing ladder. This ongoing development, combined with the growing prospect of an interest rate rise, should start to put the brakes on house price growth during the course of 2016,’ he pointed out. ‘A continuing shortage of supply is likely to continue to act as a significant constraint on activity over the coming year. Sales in 2016 are expected to be modestly higher than this year, but to remain well below the peak of 1.6 million in 2006,’ he added. The report points out that house price growth has been robust throughout 2015. The quarterly rate of increase was 2.8% in October, according to the latest figures, a little above the 2.5% average over the first nine months of the year. The annual rate stood at 9.7% in October, the highest annual rate since August 2014 when it was 9.7%, with the annual rate in a narrow band between 8% and 10% all year. ‘Improving economic conditions with continuing growth and rising employment and strengthening household finances, assisted by increasing real earnings for the first time for several years, have boosted housing demand during 2015. This has been supported further by very low mortgage rates which have fallen over the year,’ Ellis explained. ‘Strengthening demand has combined with very low supply, both in terms of new build and second hand properties for sale, to drive strong underlying house price growth. New instructions by home sellers declined in October for the ninth… Continue reading
