TSI
RICS backs idea of older home owners downsizing to boost supply crisis
The Royal Institution of Chartered Surveyors has waded into the debate over housing supply in the UK, saying that measures such as downsizing could help alleviate the current problems. Last week the head of mortgages at the Financial Conduct Authority was criticised for saying that older people should move out of family homes to make way for younger families but RICS appears to also back the idea. In its latest policy review RICS suggest it is one measure that could help the current shortage of supply in the housing market and that more downsizing could release almost three million homes. It also suggests other measures such as the expansion of affordable ownership via planning controls insisting developers offer a percentage of new homes for affordable rent, regulations to oblige second home owners to release their properties for rental, and the creation of Self Invested Personal Pensions which would allow investors to put their money into Build To Let schemes. But it adds that downsizing is considered perhaps the most effective way of improving supply in the market. ‘Britain’s older home owners are understandably reluctant to move out of much loved, but often under occupied family homes,’ said Jeremy Blackburn, head of policy at RICS. ‘Clearly, it’s an emotive issue and one that needs to be treated with sensitivity, but we would like to see central and local government provide older people with the information, practical and financial support they need to downsize if that is their choice,’ he added. He explained that this might include offering a fund to support with moving costs and pointed out that Bristol City council is already piloting a scheme along these lines, and another suggestion is a stamp duty discount for retired people who are downsizing. RICS believes that the most consistent feature of the housing market over the last 18 months has been a shortage of homes on sale with stock levels on surveyors’ books dropping to lows not seen for at least three decades. ‘Almost a third of over 55s have considered downsizing in the last five years yet we know only seven per cent actually did. If we are to get to grips with this country’s housing crisis, we need to look at supply-led measures across government and the wider industry in order to get the market moving,’ Blackburn added. Continue reading
Newly listed properties in UK hits eleven year low
There is no sign of the supply issues in the UK housing market abating with estate agents reporting that the number of new properties has dropped to an eleven year low. The data from the National Association of Estate Agents (NAEA) shows that the number of properties available to buy per estate agent branch fell by a third in the last month. There are now 38 houses available per branch in August, compared to 55 in July. This is the lowest level of supply seen since January 2004, when 38 properties were also available. The NAEA monthly data report also shows that August saw a dip in house hunters, with an average of 408 house hunters registered per member branch, compared to 462 in July, a 12% drop. The number of sales completed in August rose by one to an average of 10 properties per branch in August, however, sales made to first time buyers fell to the lowest level since July 2014. One in five sales, 20%, were made to first time buyers in August, compared to 23% in July and 24% in June, indicating movement in the market is taking place higher up the ladder and it’s second and third steppers pushing through sales. ‘We’ve been banging the drum about the dwindling supply of housing for a while and this month’s report reiterates what we’ve been saying that there simply aren’t enough houses to match demand and we’re reaching crisis point,’ said Mark Hayward, NAEA managing director. ‘There are now 11 house hunters fighting after every available house which isn’t sustainable. First time buyers are finding themselves being squeezed out of the competition, which of course means it’s taking young buyers longer to get their foot on the first step of the ladder, which will in turn increase pressure on the rental market,’ he added. Continue reading
UK private rented market in a healthy state in third quarter of 2015, says new report
Landlords in the UK are preferring high demand property such as terraced houses and flats with the overall private rented sector in a health condition, according to a new trends report. On key indicators such as yields, void periods and tenant demand, the overall picture is one of steady growth, says the latest Private Rented Sector report from Paragon Mortgages covering the third quarter of 2015. The survey reveals that average yields have grown over the last three months from 6.3% to 6.4% and this growth is in line with steady growth observed throughout 2015. When asked about expected growth over the next 12 months, landlords expressed confidence that yields will remain stable and maintain current levels. On the supply side, void periods, the average period of time PRS properties spend unoccupied per annum, remain at historically low levels of just below 2.6 weeks. In conjunction with this, tenant demand is also healthy with more than half of landlords describing demand as ‘stable’ and more than 40% saying that demand is either ‘growing’ or ‘booming’. The prospects for expected demand are also positive, with more than half of landlords expecting demand to increase over the next 12 months, compared to 42% who expect it to remain stable. The survey also shows an increase in young families with children moving into the PRS, and a corresponding decrease in young couples and professionals. Despite this, demand for longer-term rental agreements remains relatively low. ‘The data is indicative of a market growing steadily and sustainably over the long term. With low void periods and steady tenant demand, which is expected to continue growing, yields remain on a gradual upward trend and landlords are confident they will continue to do so,’ said John Heron, the firm’s director of mortgages. ‘The data also reveals the changing demographic of those choosing to live in the PRS. This is reflected in the buying intentions of landlords which seem to be shifting slightly away from investing in multi-occupancy blocks, towards terraced housing, often more suited to young families,’ he added. The research also shows that average void periods, periods of time during which a PRS property is unoccupied, have dipped below 2.6 weeks per annum for the first time since 2002, down from a high of 3.4 weeks during 2010. Requests for longer term tenancies of two years or more remain low with 58% of respondents saying less than one in ten tenants ask for a longer tenancy. Overall some 43% of landlords surveyed indicated they are looking to invest in terraced houses, up from 38% in the previous quarter while the number of landlords seeking semi-detached properties has fallen from 38% to 27%. Continue reading
