Tag Archives: countries
Major UK parties but housing at top of election agenda
Housing has become one of the major issues in the UK’s forthcoming general election with all the major parties making pledges to attract voters. The Conservative party said it will extend the Right to Buy scheme and the Liberal Democrats have announced plans to build 300,000 more homes a year and ensure everyone has a decent place to live. The Labour party says it will build at least 200,000 new homes a year by 2020 with first priority for local first time buyers and introduce three year housing tenancies with a ceiling on excessive rent rises. Prime Minister David Cameron said that the £18billion extension of Margaret Thatcher's Right to Buy scheme will be extended to 1.3million families living in housing association properties. It would be funded by requiring councils to sell off the most expensive social housing when it becomes vacant, replacing it on a one to one basis with more affordable property. The existing Right to Buy allows tenants living in council owned properties local authority tenants to buy houses and flats at a discount of as much as 70% up to a maximum of £102,700 in London and £77,000 across the rest of England. Around 500,000 housing association tenants currently have no purchase rights and 800,000 who qualify only for much less generous discounts of £16,000 or less. But the reaction has been mixed. The Conservative plans will not necessarily boost house building and could weaken the future capacity of the social renting sector to provide a safety net for those who cannot afford to house themselves via the private market, according to Peter Williams, executive director of the Intermediary Mortgage Lenders Association (IMLA). ‘The risk is that in this manifesto along with others we will get more short term initiatives and that politicians will continue to avoid owning up to the need for a fully formed housing strategy that balances support for people across all forms of housing tenure. Delaying the inevitable will only result in more difficulties in the long term,’ he explained. Adam Challis, head of residential research at JLL, described as good politics, but terrible policy. ‘This is exactly the kind of short termist thinking that the countries' 4.7 million households in social housing don’t need, not to mention the same number again of aspiring owners in private renting,’ he said. ‘Right to Buy benefits a select few while condemning the vast majority to longer waiting lists and fewer choices. At a time when we are building barely half the homes this country needs, we need a government that is interested in genuine solutions to the housing crisis rather than cheap vote winners,’ he added. Colleague Richard Petty, head of affordable housing at JLL, said that extending the Right to Buy to housing associations will seriously damage their ability to help the country build its way out of the housing crisis. ‘They rely on private finance to build now, not government grant. The… Continue reading
Prime property market in Dubai sees sales fall
Dubai luxury home prices remain relatively resilient despite a drop-off in sales activity, according to the latest analysis of the Emirate’s residential real estate market. Sales in Dubai’s prime segment, comprising properties worth over AED10 million, hit the lowest level since the end of 2012 in the final three months of 2014, the research document from international real estate firm Knight Frank shows. Despite this however, Knight Frank’s prime residential price index saw a relatively modest fall in the three months to December of 1.2% quarter on quarter, the second consecutive quarterly fall. Indeed an examination of the data shows that these two declines nearly reversed the increases seen in the first half of last year, leaving values just 0.3% higher year on year in the fourth quarter of 2014. Despite the lower level of transactional activity however, the nationalities investing in real estate in Dubai remained diverse. Data from the Dubai Land Department (DLD) shows that, in 2014, more than 140 nationalities bought property in the Emirate. A breakdown of the figures shows that Indians remained the top foreign property investors, spending around AED18.1 billion, while the British and Pakistanis invested AED9.3 billion and AED7.6 billion, respectively. Overall though, the Emiratis spending AED 22.8 billion were the leading real estate investors, accounting for approximately 21% of the total spent last year. Between 2013 and 2014 Indians and Saudis increased their levels of real estate investment in Dubai while the British and Pakistanis, as well as the aggregate of the remaining GCC countries, spent 1% to 12% less. The total level of real estate investment from all other countries also fell in 2014, by almost 5% year on year. An assessment of web traffic to KnightFrank.ae’s website shows that around 44% of the total viewings in 2014 originated from the UAE. But the report points out that a significant proportion of these will have been expats. What’s more, another 18% of those clicking through to Knight Frank’s UAE website were doing so from the UK, while 7% were from India and 4% from the United States. As a proportion of the total, the level of web traffic from Russia also fell year on year in 2014 however, this did not come as a surprise since the rouble has nearly halved against the US dollar, to which the UAE dirham is pegged, since July, making it significantly more expensive for this nationality to buy property in Dubai. Finally, the strengthening of the US dollar and the weakness of the euro also means that demand from European buyers has also begun to wane, in turn adding further downward pressure on residential property prices in Dubai. Continue reading
Central bank to get new powers of direction over UK housing market
The UK government has confirmed that the Bank of England’s Financial Policy Committee will have new powers of direction over the country’s housing market. City Minister Andrea Leadsom confirmed that the FPC will be given new tools to ensure the ongoing stability of the housing market through setting limits on debt to income ratios and loan to value ratios for mortgages. The FPC recommended it be given these powers after the Chancellor announced his intention in his 2014 Mansion House speech to give the FPC the necessary powers to tackle future housing market risks. The government’s announcement follows separate Treasury consultations on granting the Bank of England additional powers to address any emerging risks to financial stability from the housing market. ‘The Bank of England will have further powers to safeguard the stability of Britain’s financial system from any future risks posed by our housing market or banks,’ said Chancellor George Osborne. ‘Curbing Britain’s age-old vulnerability to banking and housing booms is one of the goals I recently set for the next two decades of Britain’s economic policy, and this announcement of new powers for the Bank of England shows our determination to achieve this,’ he explained. The additional powers over the housing market are commonly held by the Bank’s counterparts in other countries. Loan to value limits are used extensively in countries including Canada, New Zealand and Norway. Several other countries, including the Netherlands, Switzerland and the US have already introduced leverage requirements for systemic firms. The legislation sets out the new powers of direction that the government will grant the FPC over loan to value limits and debt to income limits for owner occupied mortgages, as requested by the FPC in October 2014. The government intends to consult separately early in the new Parliament on the FPC’s recommendations for it to have new powers over the buy to let market, with a view to building an in depth evidence base on how the operation of the UK buy to let housing market may carry risks to financial stability. According to Andrew Tyrie MP, chairman of the Treasury Committee and former Chairman of the Parliamentary Commission on Banking Standards, said that the setting of limits on debt to income ratios and loan to value ratios for mortgages could help to tackle the economic and financial stability risks posed by an overheating housing market. ‘However, there are limits to what can be expected of regulators: the identification of the cycle is an inherently extremely tough task. It could turn out to be insuperable. These new powers will affect millions of taxpayers and households across the country. The FPC is still largely unknown to the public and it is therefore crucial that it is transparent about how it reaches its decisions,’ he pointed out. Peter Williams, executive director of the Intermediary Mortgage Lenders Association (IMLA), that the Bank must think very carefully before bringing its new powers of direction to bear on the… Continue reading
