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Research reveals knowledge about self building land register is lacking in UK
One in five people in the UK believe there would be increased public support for the building of new homes if self or custom build properties contributed to a greater proportion of those built, new research shows. Despite the Self Build and Custom Housebuilding Act (also known as the Right to Build Act) coming into force on 01 April 2016, some 77% of people in the UK are unaware councils are now required to keep a register of those looking to buy land in the local area to carry out self or custom build projects. The registers will work alongside measures due to come into force in the upcoming Housing and Planning Bill, which will require authorities to ensure they have sufficient permissioned plots to match the local demand on their register. However, the research from the National Custom and Self Build Association (NaCSBA) and Ipswich Building Society found that one in eight expect to show an interest in self build property within the next year. This figure has remained constant since the annual survey was launched in 2013. However, just 2% of people stated their intention to take specific actions to progress their self build projects, such as purchasing land, submitting a planning application or starting construction, within the next 12 months. ‘At a time when much of the UK is experiencing a housing shortage, more needs to be done to raise awareness of this new legislation and encourage those looking for a new home to consider undertaking self and custom build projects,’ said Paul Winter, chief executive officer of Ipswich Building Society. ‘Due to the complex nature of a self build project, those seeking these specialist mortgages are advised to research the market and seek out a provider, and product, that best suits their individual needs and circumstances,’ he added. According to NaCSBA chairman Michael Holmes the success of the Right to Build Policy initiative, and the delivery of land to meet the huge pent up demand, depends on the registers yet he pointed out that the research shows that 77% of people aren't aware of the registers, nor what their success means to creating better new homes. ‘This figure needs to change. The NaCSBA is working hard to raise the public profile and support councils across the country to ensure that they have the correct measures in place. Currently, only 35% of LPAs have adopted a register and our aim is to get this to 100%,’ he said. Raymond Connor, chief executive of BuildStore, believes that this will change as more people become aware that finding a suitable plot of land has become simpler. ‘The research shows there is a significant gap between those interested in self build and those who intend to take specific action to progress self build projects. However, it is likely this sector will soon grow once more people are aware the main challenge of finding a suitable plot of land has now been simplified,’ he explained. Continue reading
UK parents lending to offspring to help buy a home set to reach £5 billion in 2016
Parents are set to lend over £5 billion to their offspring to buy a home by providing deposits for over 300,000 mortgages, purchasing homes worth £77 billion in 2016, according to new research. It means that the so called Bank of Mum and Dad is the equivalent of a top 10 mortgage lender in the UK and will be involved in 25% of all property transactions that take place in the country this year. Research from financial services group Legal & General and economics consultants says that this is likely to continue as long as the supply problem persists in the UK housing market. ‘The Bank of Mum and Dad plays an increasingly vital role in helping young people take their early steps on the housing ladder,’ said Nigel Wilson, chief executive officer of Legal & General. He pointed out that younger people today don’t have the advantages the baby-boomers had, including cheap housing that delivered windfall gains. ‘People will always want to help family members as it is a natural thing to do. Relying so heavily on the Bank of Mum and Dad however risks increasing inequality as many young people today are not lucky enough to be able to access parental support when buying a home, or can’t afford to buy even with parental help,’ Wilson explained. ‘We have a supply problem in housing as we are simply not building enough houses. We need to build more, especially as the Bank of Mum and Dad could soon start to experience a funding crisis of its own,’ he added. The research also found that the Bank of Mum and Dad’s average financial contribution is £17,500 or 7% of the average purchase price. Some 256,400 purchases are likely to be assisted by parent with a further 22,500 and 27,000 supported by grandparents and other family members or friends respectively. Some 57% of Bank of Mum and Dad contributions are gifts, 18% are loans with no interest and 5% are loans with interest. The report suggests that the Bank of Mum and Dad will not run into a nationwide ‘funding crisis’ for another generation, around 2035, but the regions with the highest and fastest growing house prices will face this problem much sooner. London is already at the tipping point when it comes to such funding. In 2016 London home owners that received some financial assistance from family and friends, got an average of 6.2% of their home’s total purchase price from the Bank of Mum and Dad. This represents 51% of the average Bank of Mum and Dad household net wealth in London, excluding property assets. In the South East, the average family contribution towards a loved one’s home purchase will cross the 50% mark in 2025 while for the East of England this will happen in 2028. Families clearly cannot continue to use all of their net wealth to help their offspring onto the housing ladder without putting their own financial stability at risk. This… Continue reading
Prime commercial property rents seeing steady growth in UK
Rental values for UK prime commercial property grew by 1.4% in the first three months of 2016, matching the post-crisis high of 1.4% in the fourth quarter of 2015. They were boosted by the strong performance of offices, retail warehouses and industrial property, rents across the board sustained the highest level of growth since 2007, according to the latest CBRE Prime Rents and Yields Monitor. Prime Industrial property led the way, with rental growth increasing to 2% in the first quarter, the third steepest quarterly increase the sector has seen since 2001, the data also shows. Yields remained flat at 6%, resulting in a capital value growth of 2.1%. Rental growth was largely attributable to the London market, where demand for industrial space has been robust. In the London industrial sector, rental and capital value growth was by 3.9% in the first quarter alone. The prime office sector also drove up the UK average, with rental growth of 1.8% and capital value growth of 1.7%. The healthy performance was mirrored across the UK, with every region exhibiting either rising or steady rental growth over the first three months of the year. The main growth hotspot was in the West Midlands which saw rental and capital growth of 4.7%, as commitments around HS2 and a growing trend for ‘north shoring’ increased demand for office space in the region. Prime central London offices again showed significant growth of 2.6% across both rents and capital values. The capital also contained most of the nation’s hotspots. Prime offices in the City saw its highest rental growth in six years at 4.6%, while London Docklands saw increases of 5.4%. ‘The sustained health of the office sector shows that businesses remain confident about the UK’s economic prospects, despite the looming European Union referendum vote. London and in particular the City, is seeing sustained rental growth, mostly driven by larger space users committing early prior to key lease events,’ said Chris Vydra, head of City Leasing, CBRE. Overall, UK yields remained relatively flat in the quarter, up slightly from 5.3% to 5.4%, but remaining on a par with the average level for 2015. Retail warehouses saw the highest yield growth, resulting in an average fall of 0.8% in capital values. Continue reading
