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New home building in UK needs to address the needs of older people too, says report
New home building in the UK to cope with the country’s chronic shortage of housing should not concentrate just on the needs of first time buyers and younger people, according to a new report A new report from the International Longevity Centre UK (ILC-UK) whilst the Government’s focus on first time buyers is understandable faster progress in helping these younger generations get on the housing ladder would be made if more energy was put into meeting the housing needs and aspirations of their parents and grandparents. The report calls for more housing to be built by local authorities, a wider range of commissioners of new house building, better rental offers for older people with secure tenancies, more shared ownership options for older people and overall greater choice for older people in general needs housing. The authors argue that the lack of new housing supply has contributed to the rampant increase in house prices in recent decades and this in turn has resulted in housing wealth becoming the principal driver of inequality in the UK. It suggests that providing a better choice of options for older people looking to downsize would unlock substantial equity that could be made available to invest in new homes whilst releasing existing family homes into the market. ‘Finding ways in which local authorities can promote, support, finance and commission new homes will be critical to achieve the Government’s house building targets and in ensuring greater commissioning of homes suitable for older people,’ said Sir Michael Lyons, co-author of the report. ‘We need a better rental offer with secure tenancies and confidence of rent stability to encourage older home owners looking to release capital to provide an income in later years and to help fund housing for their children and grandchildren,’ he explained. ‘The increased opportunities for self-build, of self commissioning that government is promoting could be an attractive option for those who have equity but feel there is a lack of choice to meet their aspirations or those for whom retirement settings do not appeal,’ he added. According to Ben Franklin, head of economics of ageing at ILC-UK, supporting the country’s current and future housing needs must be a key pillar of a new social contract between the state and the individual. ‘For more than a decade we have simply not been building sufficient homes to meet demand. This is having a detrimental impact on the livelihoods and wellbeing of people across all ages,’ he said. ‘Unfortunately this is not going to change any time soon unless we make some radical changes to the system. The UK’s population is growing and is ageing which will only exacerbate the current crisis. In this context, supporting the housing needs of older people can be one important component of a strategy to revitalise the nation’s housing,’ he added. Continue reading
Rents up across most of UK, but down in Wales, latest index shows
Rents in the British private rental sector increased by 2.4% in the 12 months to June 2016, down from 2.5% when compared with the year to May 2016, the latest index shows. Rents increased by 2.5% in England and by 0.1% in Scotland but fell by 0.1% in Wales, according to the data from the Office of National Statistics (ONS). Rental prices increased in all the English regions over the year to June 2016, with rental prices increasing the most in the South East at 3.4%, but overall when London is excluded rents grew by 2%. The index report reveals that since January 2011 England rental prices have increased more than those of Wales and Scotland. The annual rate of change in Wales continues to be well below that of England and the Great Britain average. Meanwhile, rental growth in Scotland has gradually slowed to 0.1% in the year to June 2016, from a high of 2.1% in the year to June 2015. Rental prices in England show three distinct periods; increasing from January 2005 until February 2009, decreasing from July 2009 to February 2010, and increasing from May 2010 onwards. When London is excluded, England shows a similar pattern but with slower rental price increases from around the end of 2010 and since the beginning of 2012, English rental prices have shown annual increases ranging between 1.4% and 3% year on year. The largest annual rental price increases were in the South East with growth of 3.4%, unchanged from May 2016, followed by the East of England up 3.1%, down from 3.2% in May 2016 and London up 3%, down from 3.3%. The lowest annual rental price increases were in the North East at 0.8% and the North West at 1.2%, both unchanged when compared with May 2016 and Yorkshire and The Humber at 1.3%, up from 1.2% over the same period. 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 May 2016 of 5.9%, compared with 2.1% for rental prices. The report suggests that inflation in the rental market is likely to have been caused by demand in the market outpacing supply. On the demand side, the Royal Institute of Chartered Surveyors (RICS) reported an increase in demand in June in their residential market survey, however, demand from prospective tenants decreased marginally in May according to the Association of Residential Letting Agents (ARLA). On the supply side, RICS reported that new landlord instructions fell slightly in June and ARLA reported that the supply of rental stock fell in May 2016 and was lower than in May last year. The report also suggest that with the UK economy… Continue reading
Property price growth in UK set to fall to 5.7% by end of 2016 and 2.2% in 2017
Residential property price growth in the UK will half in the rest of 2016 but house prices are set to by 5.7% over the whole of the year, a new analysis suggests. The fall in growth in the rest of the year will largely be due to the rush of buyers looking to beat April’s stamp duty surcharge having pushed prices up in the middle of the year and Brexit uncertainty now impacting the market. According to the analysis from economic forecaster the Centre of Economics and Business Research (Cebr) London will be most impacted by Brexit uncertainty. Average house price in the capital is expected to increase by 8% in 2016, but fall 5.6% the following year, it predicts. The report suggest that in the medium and long term housing market performance will heavily depend on the economic and immigration policies agreed during the UK’s exit negotiations with the European Union. It points out that average prices increased by 8% year on year in the first quarter of the year so a slowdown will materialise in the second half of the year. As a result of Brexit, Cebr has downgraded its short term house price expectations and now expects prices to grow by just 2.2% over 2017 but expects a smaller impact further down the line. In the medium term Cebr expects house price growth to pick up as exit negotiations with the EU progress and investors and households gain clarity on how post-Brexit UK will look. This expectation is in line with Cebr’s central view of the upcoming post-Brexit negotiations progressing relatively smoothly with the ultimate outcome seeing the UK maintain a close economic relationship with the rest of the continent, without necessarily agreeing to an unrestricted flow of labour or goods and services. The report also says that beyond 2020/2021, housing market developments will depend heavily on the immigration and economic policies the UK negotiates with the EU and the rest of the world. And it explains that although Brexit does have a far reaching impact on housing, it is important to keep in mind that the property market was losing steam even before the referendum. In April, the stamp duty surcharge on second homes was introduced and this is on top of reductions in buy to let tax relief that were announced in the July 2015 Budget. Furthermore, in London, the prime end of the market was showing cracks well before the referendum vote on June 23rd. Also, some of the global regions that many of London’s non-UK buyers come from such as Russia and the Middle East are experiencing economic turmoil and are not as able to invest. ‘Although Brexit has certainly sent shockwaves Cebr expects the housing market to slow down but not plummet. Years of under building mean that demand would have to fall very dramatically to… Continue reading
