Tag Archives: government
UK needs to build 300,000 homes a year to meet current housing shortfall
The UK Government must lift its home building target by 50% and build 300,000 new homes each year to tackle the current housing crisis, according to a report from the House of Lords Economic Affairs Committee. The report suggests that local authorities and housing associations must be freed to build substantial numbers of homes for rent and for sale and points out that the current targets will fail to meet the demand for new homes or moderate the rate of house price increases. It also says that current policy is restricting local authorities' access to funding to build more social housing and creating uncertainty in the already dysfunctional housing market by frequent changes to tax rules and subsidies for house purchases, reductions in social rents, and the extension of the Right to Buy. All of these changes reduce the supply of homes for those who need low cost rental accommodation and a narrow focus on home ownership neglects those who rent their home, the report adds. The Committee makes wide-ranging recommendations to address the housing crisis, including charging council tax on development that is not completed quickly and not relying solely on private developers to meet the target which the report describes as misguided. Indeed, it points out that the private sector house building market is ‘oligopolistic’ with the eight largest builders building 50% of new homes and their business model is to restrict the volume of house building to maximise their profit margin. To address this the Committee recommends that local authorities are granted the power to levy council tax on developments that are not completed within a set time period. It also suggests that the Government must take decisive steps to build on the very substantial holdings of surplus publicly owned land and that a senior Cabinet minister should be given overall responsibility for identifying and coordinating the release of public land for housing, with a particular focus on providing low cost homes while the National Infrastructure Commission should oversee this process. It also wants local authorities to be given the power to increase planning fees. Local authorities should be able to set and vary planning fees to help fund a more efficient planning system and the upper cap on these charges should be much higher than the current limit. ‘We are facing an acute housing crisis with home ownership, and increasingly renting, being simply unaffordable for a great many people. The only way to address this is to increase supply. The country needs to build 300,000 homes a year for the foreseeable future,’ said Lord Hollick, Chairman of the Committee. ‘The private sector alone cannot deliver that. It has neither the ability nor motivation to do so. We need local government and housing associations to get back into the business of building,’ he pointed out. ‘Local authorities are keen to meet this challenge but they do not have the funds or the ability to borrow to embark on a… Continue reading
Latest data reveals home building boom in New Zealand
Residential and building construction along with infrastructure has reached a new all-time high in New Zealand, reaching $17.8 billion, new figures show. The building consent data from Statistics New Zealand reveals that 28,387 homes were consented in the past year, the highest number in 11 years, and the 9,434 consented in Auckland is continuing the strong growth over the past four years. The 732 for May is also the highest in 11 years. The growth in Auckland for the residential construction centre was 26%, a total of $4.3 billion, and is about as fast as a sector can grow, according to Nick Smith, Building and Housing Minister. He pointed out that this is treble the rate of $1.4 billion since his party came to office and the growth has been particularly dramatic in the past few years, since the Government entered into a Housing Accord with Auckland Council. ‘The construction sector is booming, with strong residential and commercial building activity across the country. The level of residential building activity in Auckland of $4.3 billion and nationwide of $11.4 billion is an all-time high in actual and inflation-adjusted terms,’ he explained. ‘This continues the longest and strongest period of growth in residential construction in New Zealand history. We are on track for 85,000 new homes to be built nationwide in this term of Parliament, up from 60,000 last term. Auckland is heading for an all-time record of 36,000 homes, the largest in any Parliamentary term,’ he added. ‘This record investment in residential construction is welcome because supply is the most important answer to New Zealand’s housing challenges. The Government is working on further initiatives to ensure this growth is maintained,’ he concluded. Continue reading
Decline in farmland values in England slows in second quarter of 2016
English farmland values fell by just 1.7% in the second quarter of 2016 compared with a drop of 3% during the first three months of the year, according to the latest index. The average value of English farmland is now £7,773 an acre, some 6% lower than the record high of £8,306 an acre from last September. But over five years it is up 26%, over 10 years up 160% and over 50 years some 4,763% higher. The Knight Frank Farmland index says this compares strongly with other asset classes and also says that demand remains despite the decision by the UK to leave the European Union. Indeed, the index data was collected after the historic referendum on 23 June. The report points out that in the last decade the top end of the residential market in central London, for example, has increased by 98% over the same period, although a post-Brexit scramble for safe haven assets has seen gold’s 10 year return hit almost 200%. ‘Given that agriculture is the biggest recipient of EU funds via the Common Agricultural Policy (CAP) so many UK farming businesses rely on farm subsidies to break even, it might have been expected that the Brexit vote would have had a bigger effect on prices,’ said Andrew Shirley, head of rural research at Knight Frank. ‘However, there are a number of reasons why this hasn’t happened. According to polls, a majority of farmers backed Brexit so the sector will not be unduly pessimistic following the referendum, he explained. ‘The slide in sterling has also had an immediate upward effect on wheat prices and will help livestock exports. Sterling’s loss also makes UK farmland better value for overseas investors. We have already received a number of enquiries from a wide ranging geographic spread of potential buyers attracted by this currency boost and also farmland’s safe haven status,’ he added. Shirley also pointed out that a new round of potential quantitative easing currently being mooted by a number of central banks could accentuate this trend. ‘Prices should remain steady for the rest of the year, but looking further forward it is harder to judge where they will head,’ he said. ‘Much will depend on the outcome of the UK’s trade negotiations with the EU and the rest of the world, as well as how the government decides to replace the CAP. If any of these changes render some farming businesses unsustainable we will likely see more land come to the market,’ he explained. ‘This could put downwards pressure on values, but it will also present opportunities for entrepreneurial businesses and investors, and demand should remain firm,’ he concluded. Continue reading
