Tag Archives: house
Land agent suggests UK govt target of a million new homes by 2020 is achievable
Land agent Aston Mead has hit back at those who have doubted the ability of the UK to build a million new homes by 2020. The pledge is at the heart of the government’s landmark Housing and Planning Bill, which received Royal Assent earlier this month. However, a recent survey of owners and directors of 389 house builders across England indicated that just over half, some 51%, thought the target would not be met. Aston Mead land planning director Adam Hesse said there is a danger that the planning pessimists out there will create a self-fulfilling prophecy. ‘A million homes by 2020 is perfectly possible as the Home Builders Federation have stated quite clearly. But it will need conviction and commitment, as well as further government policies in favour of development, and help to speed up the planning process,’ he explained. He pointed out that there have already been huge increases in output, with build rates on large sites doubling since 2010. There were more than 180,000 new homes delivered in 2014/2015, with this year’s figure expected to be higher still. ‘By 2019 the big companies will be building double what they did six years ago. Now we need to speed up the momentum even further, so that we ensure we reach the target of one million new homes by 2020,’ he added. Despite his optimism, Hesse believes that the industry needs to see more land coming through the planning system, and processes that support both large and smaller house builders. ‘Several significant advances have happened already. Brownfield sites will now automatically be approved for building, with £10 million worth of funding to help local authorities prepare them. There are also plans to relax the planning rules for smaller house builders, enabling them to gain automatic planning permission on suitable sites. And changes to the section 106 agreement will enable developers to provide affordable homes to buy, instead of affordable homes for rent,’ Hesse explained. He added that it is local councils, who are the largest landowners in the country, which will be key to the success of this project. ‘They must get up-to-date housing plans in place, ensuring that they are robust and evidence-based,’ he said. He also pointed out that councils should review their planning application process and the conditions attached to planning which represent such a major challenge for developers. Plus they need to streamline their planning processes and improve communication so that once approved, building can get underway quickly. ‘For their part, house builders are already investing in their supply chains and have taken on tens of thousands of new workers to ensure there is the capacity and skills required. All we need now is the conviction and commitment to carry it off,’ Hesse concluded. Continue reading
House prices up year on year in all key cities in UK apart from Aberdeen
House prices in key cities in the UK increased by 3.8% in the three months to April 2016 and were up 10.4% year on year, according to the latest index. But there is considerable variation with Cambridge leading the annual growth with prices up 15.8% whereas in Aberdeen prices fell by 6.1% year on year, the data from the Hometrack cities index shows. The report says that this time last year growth was slowing in the run up to the UK’s general election and looking ahead growth could slow again in the run up to June’s referendum on the future of the UK in the European Union. It also points out that a surge in sales ahead of the new 3% stamp duty surcharge for additional homes resulted in most cities registering a spike in the monthly rate of house price growth in March with slower growth recorded in April. Aberdeen remains the city bucking the national trend with prices falling by 6.1% in the last year where the lower oil price continues to impact the economy and demand for housing. Across the remaining cities, the annual growth rate is higher than 12 months ago in 15 out of the 20 cities covered by the index, led by Cambridge with growth of 15.8%, then London up 14.4% and Bristol up 13.8%. Portsmouth and Southampton both saw prices rise by 9% year on year while in Bournemouth prices were up 8.6%, in Birmingham 8.3%, in Manchester 7.8%, in Leicester 7.4%, in Oxford 7.1%, Leeds 6.7%, in Cardiff 6.3%, in Nottingham 5.9%, in Liverpool 5.5%, in Sheffield 4.7%, in Belfast 4.1%, in Edinburgh 4%, in Glasgow 3.5%, and in Newcastle 2.5%. Aberdeen was the only city to see prices fall with a decline of 6.1%. The report says that the implication of the referendum result for businesses operating in housing is the key unknown. ‘The economic impact of Brexit and consequences for interest rates, investment and incomes has direct implications for housing. The consensus appears to be a short economic shock accompanied by a period of uncertainty for consumers and business,’ it explains. It has an analysis of city level house price growth and transactions over the last 20 years which shows that external shocks tend to have a greater impact on market volumes than house prices, especially where there is no accompanying economic downturn. From 1996 to 2007 house prices posted consistent positive year on year growth but this was not the case for sales volumes which were influenced by a mix of external shocks to sentiment and changing domestic factors such as short periods of rising interest rates. In the decade before 2007, sales volumes fell on four occasions in London by as much as 15% highlighting how London is more prone to the impact of external factors from the crisis in emerging economies and collapse of the Long Term Capital Management hedge fund in 1998 to the bursting of the dot… Continue reading
Chartered surveyors in Ireland hit out at high additional costs for new homes
The Irish government needs to address a trend in the country’s housing market which means that actual construction costs for new homes are less than half of the total price paid by buyers. A new report from the Society of Chartered Surveyors has found that the cost of building a three bedroom semi-detached house in the Greater Dublin area, for example, is over €330,000. But the actual cost of building the house, known as hard costs, came to €150,000, which at 45% is less than half of the overall cost of providing that house. This was broken down as land and acquisition costs of €57,500 or 17%, VAT of €39,000 or 12% and a margin of €38,000 or 11% as the main elements of the soft costs which total €180,000. Micheal Mahon of the SCSI said it may come as a surprise to those outside the industry to see that the actual construction costs or hard costs made up less than half of the total costs. He said this was an issue which required urgent and focused attention from Government. ‘The country is experiencing a chronic housing shortage which is contributing significantly to the current homelessness crisis. The findings of this report highlight a number of pressing issues, particularly on the soft cost side. We need to kick start housing supply as soon as possible and to accelerate from the current output of 12,000 units per annum to the 25,000 units which is required,’ he pointed out. The report is based on a detailed study of eight house building projects with a minimum of 30 units in the Greater Dublin area where chartered quantity surveyors were employed as independent cost consultants. It shows that the cost of building a new house in Dublin is now €45,000 more than the median asking price of a three bed semi-detached house in the city according to a recent MyHome.ie/Davy property report. The study found that the cost of building the house from foundations to roof and completing the estate roads and drains etc is €150,000. In addition to the soft costs listed above there were levies of €12,000 or 4%, some €5,500 or 2% for professional fees and sales and marketing costs of €8,000 or 3% to bring total soft costs to €180,000. The report provides an analysis of a number of cost reduction options. Mahon said it is up to policy makers to decide which measures to implement to support the early delivery of supply. ‘Whether they opt to reduce VAT to 9% or to zero as is the situation in Northern Ireland or to reduce finance costs to 5% or to reduce levies to €1,500 or to increase the supply of land, prompt and decisive action is needed. They may well opt for a combination of these measures. However the focus should… Continue reading
