Tag Archives: conservatives
UK property market picks up but shows signs of pricing expectation gap
The UK property market is set to see a pick-up in activity due to an election result that was positive for real estate markets but there is evidence of an ‘expectation gap’ emerging, new research suggests. Buyers and vendors have different expectations when it comes to pricing, according to the latest market update report from property firm Knight Frank. It shows that UK house prices rose by 1% in April, taking the annual increase to 5.1%, while prime central London prices rose by 0.3% in April, an annual uptick of 2.8%, and prime outer London rose by 0.4%, and are up 4.8% year on year. Overall prime country house prices rose in value by 2.5% in the year to March, while prime properties in Scotland climbed 1.2%. Meanwhile, the rental market in prime central London is showing continued growth, outpacing that seen in the sales market with growth of 4.1% while overall UK rents rose 2.1% in the year to March. Rates of growth are not uniform across different areas, for example there has been 6.2% growth in Kensington and just 0.1% in Mayfair. Rents in the Home Counties climbed by 4.7% in the year to the end of March. ‘Uncertainty had been the byword in most corners of the market in the run-up to what was considered the most closely fought election in decades. Now, with a majority government, there is clarity on the way forward on housing policies and a Conservative majority means that the approach is likely to be largely a continuation of what we have seen over the last five years,’ said Grainne Gilmore, head of UK residential research. She pointed out that housing supply will continue to be a priority as the current levels of new homes being delivered is far below the generally agreed target of 240,000 homes a year. Indeed, Knight Frank’s recent house building report revealed the measures house builders and developers think should now be a priority for policymakers to boost development and these include beefing up planning departments and releasing more public sector land. ‘The Conservatives have already pledged to extend the Help to Buy Equity Loan to 2020, something which has encouraged developers to take on larger schemes. Their plans to extend Right to Buy to more Housing Association tenants will provide the opportunity for home ownership among this group,’ explained Gilmore. ‘However in terms of housing supply, the policy of replacing each home purchased with another, new, home available for rent must be implemented, otherwise the scheme will result in a net loss of affordable homes,’ she added. Knight Frank expects sales to pick up. ‘In terms of activity and pricing in the market, it is likely that transactions will pick up now that the uncertainty in many parts of the market, especially the prime market which is no longer dealing with the prospect of a mansion tax,’ said Gilmore. ‘However, there is evidence that an expectation gap in pricing may be starting to… Continue reading
New tenants in UK facing higher rents as demand increases
There is an increase in demand for property in the UK private rental sector with new tenants seeing a rise in monthly rents from a third of lettings agents. Indeed some 31% of letting agents saw an increase in the cost of monthly rent for tenants from January to February, according to the Association of Residential Letting Agents (ARLA) monthly Private Rented Sector Report. The South East of England saw the highest number of landlords increasing rent per calendar month with 41% of agents in the region reporting an increase whereas in contrast in Wales only 13% of agent’s reported uplift in rent prices. An increase in rents may be down to the fierce competition for rental property. ARLA licensed agents reported an average of 40 prospective tenants per branch in February, up from 38 in January. The report points out that whilst only 13% of Welsh tenants saw an increase in rents, they are facing the most competition for housing, with 46 tenants registered per member branch. Tenants in the East of England are also facing fierce competition with an average of 45 house hunters registered at each branch. Overall the report says that supply in the rental market remains steady, with an average of 184 properties managed per member branch, which is the same as last month. The East Midlands boasts the highest level of supply, with an average of 269 properties per branch, whilst supply in London has dropped to an average of 122 per branch, down from 140 in January, increasing already intense competition in the capital. According to David Cox, ARLA managing director, it shows that demand for rented accommodation is still on the increase, and monthly rents are following suit. ‘When demand is high then the premium for a home increases. House prices are still sky high and are unlikely to reduce anytime soon, which means that getting onto the property ladder is a challenging and unlikely task for many, so renting a property is the only option available,’ he explained. Looking ahead to the general election in A RLA Letting agents are strongly against Labour’s proposal to introduce three year tenancy agreements with rent controls and strict rules to make it more difficult to evict tenants The survey found that 70% of agents believe this would result in landlords pulling out of the market and creating a decrease in the supply of rental property, which would have detrimental effects on the industry. Just under half of agents, 46%, argue that three year tenancy agreements would cause them to lose flexibility over the duration of their tenancy agreements and 69% of ARLA agents think point blank that the proposal would not benefit tenants. When it comes to building new homes to help kick start the property market, some 37% of ARLA agents believe that the Conservatives’ pledge to… Continue reading
Farm Bill 2013: Is This Big Agriculture’s Last Gasp?
Sean McElwee in Politics Farm Bill 2013: Is This Big Agriculture’s Last Gasp? The farm bill’s original failure to pass Congress ( it has since been approved by the House without food-stamp aid ) has largely been viewed in light of immigration reform and congressional dysfunction, but it also underlies another specter: the weakening farm lobby. Since our nation’s founding, farmers (originally slave-owners) have had an unequal voice. The Senate, for instance, is made up of two representatives from every state, no matter how large or small. The Electoral College was designed to give small states a voice, and with the development of primaries, farm states like Iowa have become more and more important. Even Republicans, the so-called party against government waste, have traditionally been afraid to touch farm subsidies (just food stamps!). Since Reagan, the Republican Party has been the party of wealth. Reagan happily doled out tax cuts along with spending cuts, but suspiciously, the tax cuts only went to rich people and the spending cuts only hurt poor people. Similarly, Bush’s tax cuts for the rich turned a projected $5 trillion surplus to a $5 trillion deficit, which Republicans like Paul Ryan argue should be paid for by, you guessed it: cutting Medicaid. So here’s a quiz. If the farm bill contains huge subsidies for rich farmers (like Bon Jovi) and food stamps to protect poor people, which half will the Republicans cut? Answer: One of the most effective anti-poverty programs in history. Seriously. Now that I’m done trolling the PolicyMic conservatives, let’s address the real meat of the story here — the farm lobby. The failure of the farm bill indicates that the great hydra agriculture lobby may have only a few ugly heads left to rear. What’s the problem with the farm lobby? Don’t farmers need representation too? Don’t farm subsidies help keep the food market stable? Yes and yes. But, American farm policy may be one of the most incoherently developed and rigidly path-dependent systems in the world. P.J. O’Rourke once noted, “Farm policy can be explained. What it can’t be is believed.” Many of us don’t remember when farming was a killer lobby, able to fight off any representative who questioned the billions funnelled to them. In a supposedly “free-market” country, our ag policy is run like Russia during central planning. Huge tariffs protect the American sugar manufactures from Brazilian competition, to the tune of $3.5 billion a year. That also drives up the demand for high-fructose corn syrup, giving us something to do with the corn we massively overproduce . The big story for the farm bill is that the U.S. government is trimming direct payments and replacing them with an expanded crop insurance program. Crop insurance protects farmers from dramatic drops in the price of crops, but the premiums rarely add up to the payouts. Last year, the crop insurance program paid out $17 billion, three-quarters of which was paid for by Uncle Sam. As any economist knows, such programs (private gain with public risk) encourage moral hazard, and the result is that farmers have taken more risk “by farming on flood plains or steep hills.” The crop insurance program overwhelmingly helps wealthier farmers, but that fact that the lobby couldn’t keep direct payments indicates a level of atrophy. There are other indications of the weakening farm lobby. For instance, last year, the U.S. was hit by its worst drought in 50 years, which was likely exacerbated by climate change . Farmers’ groups sought a bill that would provide relief, but while the bill made it out of committee, it was never brought to a vote on the House floor . Of course, the grand narrative of the bill (i.e. that the Republicans in the House are insane) is also accurate. They’re clearly crazy-level congresso-terrorists, something data showed us long ago and that other conservatives have been hammering them for. The chaos surrounding the farm bill is certainly a reminder that this is the most polarized Congress in a long time , and a harbinger of more inaction (immigration, student loans, tax reform). But it’s also a reminder that while we consume more food, few, if any of us remain attached to nature and very few of us farm. It’s an indication that what used to be a broadly bipartisan issue has now become an area for savage political fighting . That will have increasing political implications in the years to come. Picture Credit: ThinkProgress Continue reading
