Tag Archives: government
Fewer young people likely to be able to buy their own home in the future
Even if the current plan to build 220,000 new homes in England each year until 2031 is fulfilled young people aged 25 to 34 will still be less able to live in their own home that they did in 2011, according to new research. An analysis report from the Town and Country Planning Association says that currently only 54% of the number of homes needed are being built, putting pressure on prices and rents, and the housing crisis is worse in London and the wider south east where 55% of the homes required need to be located. Even if the homes required are actually built the latest government household projections suggest that young people across the country are struggling more than ever to live independently because of the cost of housing. The research says that the housing requirement to meet projected household formation until 2031 is actually lower than previously anticipated but this is because younger people are already finding they cannot afford to form independent households. Housing shortages and the resultant high prices and rents mean that young people are living with parents or in house shares for longer, rather than forming a household of their own. Rising student debt levels and potential future welfare reform are likely to make their position even more difficult. ‘This research shows that, while it looks as if the projected number of needed homes has dropped, this is because many people now can't afford their own home either to rent or buy and are living with parents or other people longer than they would like to,’ said Kate Henderson, TCPA chief executive. ‘The government needs to see this as a wakeup call. It has already fallen behind on their targets for house building, and this is now having a devastating effect on young people. More needs to be done to build the necessary number of high quality, affordable homes for people who need them,’ she added. Starting in 2011, a minimum of 220,000 homes are needed each year to 2031 if house building is to keep up with projected household growth and even this is not enough to enable couples aged between 25 and 34 to have the same chance of living in their own home as their counterparts in 2011. Of the new homes needed, over half, 55%, are needed in London and the surrounding area. In contrast, in the north east, the number of new households is expected to only rise by 11% over 20 years. Professor Christine Whitehead co-author of the research and Emeritus Professor at the London School of Economics it is a major concern that young people are likely to be less well housed in 2031 than their counterparts in 2011. ‘If house building cannot be increased at least to the projected levels other household groups will find themselves in the same boat,’ she added. The research also shows that the government is already falling short… Continue reading
UK commercial property market set to see record breaking year as confidence rises
Strong investor confidence is set to propel the UK’s commercial property market into a record breaking years with deal volumes at the end of the third quarter already over £50 billion. If, as anticipated, volumes in the fourth quarter of 2015 follow the patterns observed in the final quarters of 2013 and 2014, investment in the UK commercial market this year will break the £70 billion barrier for the first time. According to international real estate advisor Savills it is the strong confidence in the market that is the driving force behind the growth in activity. Its latest report says that despite ongoing uncertainty over Greece’s position in the Eurozone and a slowdown in the Chinese economy, UK property as an asset class continues to outperform investor expectations. Average prime yields have remained at 4.65% for the second successive month, however resurgent retail activity and strong UK institutional interest in south east offices could exert downward pressure on yields in these sectors, the report warns. ‘Last year 59% of investment activity in UK property took place outside London, a trend that is set to continue as investors seek the value afforded by the rental growth prospects in supply constrained regional markets, alongside the opportunity to build scale by acquiring portfolios,’ said Kevin Mofid, research director at Savills . ‘However, regional markets can be more susceptible to Government policy changes than the capital. Investors should therefore consider the potential impact that the extension of commercial to residential permitted development rights could have on rental growth and vacancy rates in regional office and industrial markets,’ he explained. ‘Nonetheless, given that investors currently place UK property head and shoulders above other asset classes, we don’t envisage that these measures will materially affect investment activity going into 2016,’ he added. A separate report from Savills says that non-domestic real estate investment outside of London will reach a record high by the end of 2015 with some £10.5 billion invested in real estate outside the capital by international investors in the first eight months of 2015. Savills predicts that this will rise to £14 billion by the end of 2015, the highest volume since it started collecting data in 2000, and nearly half of all the non-domestic investment in the UK as a whole. In the 12 months to August 2015, portfolio purchases accounted for the majority, 64%, of investments, due to the preference of investors for larger lots which are less common outside of London. Scotland and the South East proved to be the most popular regions, each attracting a 7% share of investment, with the North West and West Midlands in joint second place attracting a 5% share each due to the strong rental growth projections for the Manchester and Birmingham office markets, as well as the comparatively high yields on offer. The most popular sector for investment is retail and leisure, accounting for 57% of investment, driven by several… Continue reading
Property prices in Ireland growing faster outside of Dublin, latest index shows
Property prices in Ireland increased 1.3% nationwide in September and are 8.9% higher year on year, the latest official figures shows. But a breakdown of the data from the Central Statistics Office reveals that prices are now growing faster outside of Dublin than in the capital city which is no longer leading the nation. In Dublin residential property prices rose by 0.9% in September and they are now 6.5% higher than in September 2014. This was the lowest annual increase since June 2013 and contrasts with the 20% rise recorded in April. Dublin house prices rose by 1.1% in September while apartment prices decreased by 0.4%. Experts said that the decline is due to the introduction of lending restrictions by the Central Bank’s lending restrictions and the ending of the Capital Gains Tax (CGT) waiver for property purchases. Outside of Dublin residential property prices rose by 1.6% in September and they are now up 11.4% compared with September 2014. This means that across Ireland prices were 34.6% lower than their peak level in 2007 while in Dublin they were 35.6% lower. Excluding Dublin prices were 47.7% lower. Peter Stafford of Property Industry Ireland, which represents property sector firms, pointed out that the last few months have been relatively stable for house prices, with fairly consistent low level growth. He believes that the slowdown in house price growth in Dublin is largely driven by reduced borrowing capacity because of the new Central Bank mortgage rules and he also pointed out that sales are doing well. Between January and August 2015, there were 29,916 housing sales nationwide compared to 23,626 in the same period of 2014 and 16,462 in January to August 2013. But he warned that there is a severe shortage of affordable homes to buy in many urban areas. ‘Population growth, demographic trends, as well as internal migration, will lead to increased transactions into the future. So it is vital that people looking to move house have a genuine choice of affordable accommodation,’ he added. Stafford also explained that the Irish government missed an opportunity in the recent Budget to boost home building and address the shortage. While the government has pledged 20,000 new homes by 2020 it could do more to encourage private builders by reducing the cost of new housing through a fall in VAT and development levies, the organisation has said. He added that while the delayed revaluation of housing for Local Property Tax to 2019 will help home owners over the short term, more needs to be done as part of a wider overhaul of property tax to create a sustainable, predictable and fair property tax system. Continue reading
