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Homes for sales in UK slump to 14 year low
The supply of available housing in the UK is at its lowest level in 14 years with buy to let landlords rushing to complete ahead of tax change, new research shows. Property investors are trying to avoid the additional 3% stamp duty charge on buy to let and second homes from 01 April, according to the report from the National Association of Estate Agents (NAEA) but sales to first time buyers are also up. The January Housing Market report shows that the number of properties available per member branch fell to 33 in January, the lowest recorded since December 2002 when just 25 properties were available per member branch. In contrast, demand for housing soared in January, with an average 453 house hunters registered per branch, the highest recorded since July 2015 and a 21% increase from December when there were an average 374 registered, during a seasonal lull in activity. This reflects increased activity from landlords pushing to complete sales ahead of the upcoming buy to let stamp duty surcharge, the report suggests. Indeed, 72% of estate agents reported an increase in interest from landlords, a rise from 44% in December. Almost a third, 29%, of the total sales made in January were to first time buyers, an increase of 5% from December 2015, the report also shows. ‘Our findings this month reflect what we are all seeing across the market which is that landlords are trying to complete on sales ahead of the changes to stamp duty on additional homes in April. It continues to be a sellers’ market as demand outstrips supply,’ said Mark Hayward, NAEA managing director. ‘The number of sales made to firs time buyers has increased this month, and we should expect to see their market share rise after April. The fact that housing supply has reached a 14 year low really highlights the need for the government to push the house building programme to the very top of their agenda and help more first time buyers make their first step on to the housing ladder,’ he added. Continue reading
UK would be less attractive to property investor if it left the EU, new poll suggests
Property investors have warned that the UK would be a less attractive place to invest were it to leave the European Union, according to findings of a new survey. The survey of investor clients by global property advisor CBRE reveals that sentiment has hardened against leaving the EU in the three years that the poll has been taken. This year’s results show a reduction in those who think exiting the EU would make no difference to investment from 33% in 2014 to 21%. The proportion of respondents who think the UK would be a slightly worse place to invest has risen from 32% in 2014 to 46% in the latest poll, bringing the total that think the UK would be a worse place to invest to 73%, up from 69% last year. The UK will hold a referendum on whether to remain in the EU on 23 June and CBRE believes investors and occupiers are likely to behave during the referendum campaign in the same way as they did in Scotland during its 2014 independence referendum by delaying decisions until after the vote. However, after Scotland voted to stay in the UK there was a ‘catch up’ effect and CBRE expects the same for the UK, assuming that it decides to remain in the EU. ‘Property investors have, over the past three years, become increasingly gloomy about the impact of the UK leaving the EU. The UK has experienced record property investment in the last few years and the property investors we surveyed fear that a Brexit would adversely affect the attractiveness of the UK as an inward investment destination,’ said Miles Gibson, head of UK research at CBRE. ‘David Cameron’s reforms are likely to be useful, but not decisive, in affecting public sentiment. The most important concession that the Prime Minister has secured is to ensure that non-Eurozone countries are not discriminated against within the EU’s single market. This aims to ensure that key parts of the UK economy, particularly financial services, can continue to operate from the UK rather than having to move to the Eurozone,’ he added. The report shows that the majority of experts feel that the UK would suffer economically from exit, but estimates of the impact on growth vary substantially. The majority view is that the UK property market would suffer an adverse ‘demand shock’ were it to vote to leave the EU. Finally, the report argues that reductions in labour availability arising from migration controls will vary substantially because some sectors are more dependent on migrant labour than other. The food and hospitality sectors, for example, could be very exposed to labour market restrictions. The financial services sector is also exposed because of the potential change in the regulatory environment, and in terms of trade with the EU. Continue reading
Home building starts in England up 6% in 2015, but planning system sluggish
More than 143,500 new homes were started in England last year, up 6% year on year, nearly double the low point of 2008 and the highest level since 2008, but concerns remain over slowness of planning system. The figures from the Department for Communities and Local Government also show that in the final quarter of 2015 some 37,080 homes were started, a rise of 23% on the same quarter a year earlier and up 91% when compared to June 2009. Completions for the fourth quarter of 2015 are estimated at 37,230, some 6% higher than the previous quarter and up 22% on the same quarter in 2014. Annual housing completions totalled 142,890 in the 12 months to December 2015, an increase of 21% compared with the previous 12 months. Seasonally adjusted starts are now 116% above the trough in the first quarter of 2009 but 24% below the peak in the first quarter of 2007. Completions are 23% below their peak also in the first quarter of 2007. It means both starts and completions for new build homes are at their highest level since 2008 with more than 700,000 new build homes started since April 2010. Meanwhile, the latest figures from the Home Builders Federation show planning permission for 59,875 homes was granted in England during the third quarter of last year, up from 53,409 in the same quarter in 2014, a 12% rise. The data also shows that 242,819 permissions were granted in the 12 months to October, the highest moving annual total since early 2008. However, many of the homes identified in the report still have a significant part of the planning system to navigate before any construction work can start, a process that could still take two or three years. ‘Our reforms to the planning system are delivering the permissions needed and schemes like Help to Buy have given builders the confidence to invest and build, with starts and completions now at their highest since 2008,’ said Communities Secretary Greg Clark. A breakdown of the figures show strong regional growth with Cambridgeshire, Northamptonshire and Leicestershire experiencing high levels of starts along with areas in North Oxfordshire and the Thames estuary. The current projection is to deliver a million new homes by 2020/2021 and Housing Minister Brandon Lewis pointed out that proposals published last week will speed up the planning process. They include dedicated fast track application services. However, the industry remains concerned that the lag of turning permissions into homes is becoming lengthier and the HBF hopes that the planning proposals will have an effect as it says that efficient planning is the best way to ensure that local people have an early say in the future shape of their communities and are able to benefit from the wealth of social and economic benefits that house building brings with it. ‘The house building industry has delivered an unprecedented increase in build rates over the past two years. The largest companies have… Continue reading
