Tag Archives: investment
New home building in UK up 6% year on year but below target
The number of newly built homes in the UK has increased 6% in the past year, according to the latest house building data from the government. Some 139,030 new homes were completed in the year to June and have continued to build gradually over the last two years, according to the figures from the Department of Local Government and Communities. The data also shows that more than 144,280 homes were started in the year to June 2016 but the figures are still below the current target of 220,000 that are needed to meet the housing crisis. Communities Secretary Sajid Javid admitted that more needs to be done. ‘We’ve got the country building again with more new homes started and built than this time last year. This is real progress but there is much more to do. That’s why we are going further and increasing our investment in house building to ensure many more people can benefit,’ he explained. A breakdown of the figures show strong regional growth in London, Swindon and Wakefield, which are all experiencing high levels of completions. Delivery in London saw 24% more homes being built in the year to June 2016 than the previous year with local authorities in Greenwich and Waltham Forest seeing completions increase by 126% and 103% respectively over the same period while in Swindon and Wakefield completions were up 104% and 41% respectively. Figures published last year show that the total number of new homes across the country rose by 25% in 2014 to 2015, when taking in to account all homes, including new builds, houses that have been converted into flats and buildings whose use has been changed to residential. Javid pointed out that the government is committed to building the homes the country needs and investing £8 billion to build 400,000 more affordable homes to rent and buy. He also pointed out that the new Housing and Planning Act will help deliver the ambition to build a million more homes by ensuring councils continue to play a key role in delivery, and through new measures that will allow them to deliver more homes more swiftly. On a quarterly basis, house building starts in England were estimated at 36,400 in the latest quarter, a 2% increase compared to the previous three months and 6% up on a year earlier while completions were estimated at 34,920, some 7% higher than the previous quarter but 2% lower than a year ago. Annual housing starts totalled 144,280 in the year to June 2016, up by 2% compared with the year to June 2015. During the same period, completions totalled 139,030, an increase of 6% compared with last year. Private enterprise housing starts were 4% higher in the June quarter 2016 than the previous quarter whereas completions were 3% higher. Starts by housing associations were 6% lower compared to the last quarter and completions 29% higher. All starts are now 112% above the trough in the March quarter of… Continue reading
UK rents up 2.4% in 12 months to July 2016, latest index shows
Rents in the UK’s private rental sector increased by 2.4% in the 12 months to July 2016, unchanged compared with the year to June 2016, according to the latest index data. The figures from the Office of National Statistics (ONS) shows that rental prices grew by 2.6% in England, 0.2% in Scotland and were unchanged in Wales. Rental prices increased in all the English regions over the year to July 2016, with rental prices increasing the most in the South East at 3.5%, up from 3.4% in June 2016, followed by the East of England at 3.1% and London at 3%, both unchanged from June 2016. Annual rental growth in the South East has surpassed that of London since May 2016. Since the beginning of 2012, English rental prices have shown annual increases ranging between 1.4% and 3% year on year, with July 2016 rental prices being 2.6% higher than July 2015 rental prices. Excluding London, England showed an increase of 2.3% for the same period. The lowest annual rental price increases were in the North East, up 0.9% and up from 0.8% in June 2016, the North West up 1.2% and Yorkshire and The Humber up 1.3%, both unchanged when compared with June 2016. But the lack of movement in Wales meant that rents continue to be well below that of England and the average for the country as a whole while rental growth in Scotland has gradually slowed to 0.2% in the year to July 2016, from a high of 2.1% in the year to June 2015. Looking at data from the UK House Price Index over a longer period shows residential house price growth has typically been stronger than rental price growth for a number of years, with an average 12 month rate of house price inflation between January 2013 and June 2016 of 6%, compared with 2.1% for rental prices. Inflation in the rental market is likely to have been caused by demand in the market outpacing supply, says the ONS report which points out that the Royal Institute of Chartered Surveyors (RICS) Residential Market Survey reported an increase in demand in the three months to July, while tenant demand increased in June according to the Association of Residential Letting Agents (ARLA). On the supply side, RICS reported that new landlord instructions were flat in July and ARLA reported that the supply of rental stock bounced back in June 2016, following a sharp drop in May. It points out that rental prices have been growing at a slightly faster rate than real wages in recent months. Regular pay also grew by 2.3% in the three months to June 2016 compared with the same period last year, continuing a revival of real earnings growth. The annual jump in private rental prices is a stark reminder of the struggles that many people living in private rented homes are facing in saving a deposit to buy their first home, according to Richard Connolly,… Continue reading
UK is running out of bricks to build new homes
A shortage of bricks is a contributing factor in rising house prices in the UK over the past decade with new research suggesting 1.4 billion are needed to meet demand. With demand for new homes growing it means that the number of bricks, the most used traditional building material in the UK, cannot keep up with development, according to research from the National Association of Estate Agents (NAEA) and the Centre for Economics and Business Research (Cebr). The UK’s construction sector would require a total of 1.4 billion bricks in order to resolve the housing shortage in the UK, the equivalent of the total amount which would be needed to build all the houses in Leicestershire. The research report says that between 2006 and 2016, the growing UK population triggered exponential growth in demand, and has now outgrown the number of houses being built. Given that in 2016 the average UK home is made up of 5,180 bricks, resolving the housing shortage of 264,000 units would require 1.4 billion bricks. While house prices are impacted by numerous macroeconomic factors, they are fundamentally driven by the supply and demand of housing units. The shortage of homes has led to sharp house price appreciation and prevented many prospective buyers from getting on to the property ladder. The 1.4 billion bricks deficit could in theory build several of the UK’s famous landmarks several times over including 740 Big Bens, 40 Tower Bridges, 3,090 Manchester Town Halls, 4,540 Warwick Castles and 5,830 Conwy Castles. There are concerns that the impact of Brexit could significantly worsen the issue. In 2015 some 85% of all imported clay and cement which are primary brick components, came from the European Union and the report suggests that depending on how trade negotiations develop, Brexit could have a considerable impact on supply. It also explains that the UK’s brick stock steadily declined between 2008 and 2013 and only partially recovered in 2014 and 2015. Two thirds of small and medium sized construction businesses faced a two month wait for new brick orders last year, with almost a quarter waiting for up to four months and 16% waiting six to eight months. This can partially be explained by the slowdown in building following the recession, it adds, but even although new homes are becoming smaller there are still not enough bricks. Over the past 100 years, the size of the average UK home has shrunk significantly. In the 1920s the average dwelling was 153 square meters and now it is approximately half the size at 83 square meter, meaning homes have shrunk by 46% in the last century. This is partly a result of the fact families are generally smaller, so require less space, however the decrease can also be explained by financial restrictions. As house prices have risen by 45% over the past 10 years house buyers have been forced… Continue reading
