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UK announces plans for more flexible planning scheme for new homes
Councils in the UK will compete to process planning applications and be able to offer fast track application services under new proposals from the government now out for consultation. Ministers announced a pilot scheme which is the first step towards tackling the lack of incentive for councils to improve and speed up their planning service which has been causing drawn out applications and local frustration for both house builders and individual applicants. The proposals are expected to boost house building and speed up the planning application process by giving applicants the choice of whether to submit their plans to the local council, a competing council or a government approved organisation that would process applications up until the decision point. Councils will also be able to offer the fast track planning application service either through competition pilots or potentially through devolution deals. However, decision making on planning applications would remain with the local council to ensure decisions are taken locally and maintain the democratic link between local people and decision makers. ‘Council planning departments play a vital role in getting local house building off the ground, but for too long they have had no incentive to get things done quickly or better, resulting in drawn out applications and local frustration,’ said Communities Secretary Greg Clark. ‘These proposals will be a boost for house builders looking to build much needed new homes for hard working families and first time buyers, and for local people looking to get a planning permission for home improvements through their local council quicker,’ he added. According to Planning Minister Brandon Lewis many councils are indeed already working hard to improve the services they offer their residents, and across the country people’s satisfaction levels remain high. ‘Now we want to go further by setting out these ambitious proposals to link any future increases in application fees to councils’ performance, and testing more competition including through offering dedicated fast track application services,’ he explained. Historically councils have had a ‘closed market’ in handling planning applications, with limited incentive for innovation and efficiency. However research studies over the last three decades in the UK and abroad suggest there are cost savings of up to a fifth for competitively tendered or shared services. A consultation on the competition pilots and fast track services has been published and it also includes proposals to make any future increases in councils’ fees for processing planning applications dependent on their performance in terms of speed and quality of decisions. Further details on how the pilots will run will be published after the consultation has closed. Change is needed urgently, according to the Federation of Master Builders (FMB). ‘Across the country small house builders continue to be frustrated by a painfully slow planning process that is holding back the delivery of new homes,’ said FMB chief executive Brian Berry. ‘The numerous sources of delays and inefficiencies in the system impact upon house building rates, and act as a major deterrent to small… Continue reading
Buying is cheaper than renting across most of the UK, new research shows
People looking for their first home in the UK are better off buying than renting with the gap more than doubling over the last five years, new research shows. Indeed, first time buyers are on average £865 or 10% a year better off with their own home compared to those who rent, according to the research by Lloyds Bank. The South East of England is the only region where renting is the cheaper option with average monthly buying costs at £965, some £65 higher than average monthly rental costs of £900. The calculations show that the average monthly buying cost, including mortgage payments, associated with a first time buyer purchasing a three bedroom house stood at £672 in December 2015, some £72 or 10% lower than the typical monthly rent of £744 paid on the same property type. This represents an increase of £105 over the past year compared with the annual saving associated with buying a home instead of renting of £760 in 2014. The difference has grown as average monthly rents have increased more steeply by £24 or 3% compared to a £15 or 2% increase in monthly buying costs. The current financial gap between buying and renting of £865 is more than double the annual saving of £397 in 2010. Over this period, the average rent has grown by 23% or £139 a month from £605 whilst average buying costs have increased by 17% or £100 a month from £572. The research report says that buying has consistently been the cheaper option since 2009, when the average monthly payment was £561 for renting compared with £575 for buying. While buying is more expensive in the South East, the data shows that buying is most affordable compared to renting in cash terms in the North West, where the typical first time buyer is paying £133 a month less than the average renter at £525 against £658. The next most affordable is Scotland where a buyer pays £525 against £645, a saving of £120, and then Wales at £471 against £574, a saving of £103. The number of first-time buyers is estimated to have totalled 310,000 in 2015, largely unchanged from 311,700 in 2014. This represents an increase of 60% since the number of first time buyers fell to a recent low of 193,700 in 2011. The number of first time buyers accounted for 46% of all house purchases made with a mortgage in 2015. This share has grown from 36% at the start of the housing downturn in 2007. ‘We’ve seen a significant shift over the past five years, with people consistently paying less on average per month when owning their property as opposed to renting. In 2015 this gap widened by over £100 to an annual saving of £865,’ said Mike Songer, mortgage director at Lloyds Bank. ‘This has been helped by record low mortgage rates and rising private rents, making owning a home a much more attractive proposition than renting,’… Continue reading
Nationally home prices in Canada up 17% year on year
Residential property sales across Canada edged upwards from December to January with annual transactions increasing by 8% compared to a year ago. The data from the Canadian Real Estate Association (CREA) also shows that home prices were up 17% year on year but not everywhere with British Columbia and Ontario seeing values fall slightly. Month on month sales increased by 0.5% and this lifted national sales activity to the highest level since late 2009. The number of local housing markets was almost equally split between those where sales were up from the month before, and those where sales were down. Monthly sales increases in the Greater Toronto Area (GTA) and Lower Mainland of British Columbia fuelled the national sales increase and offset monthly sales declines in Calgary, Edmonton and the Okanagan Region. ‘Single family home buyers in the GTA and Lower Mainland of British Columbia had been expected to bring forward their purchase decisions before tightened mortgage regulations take effect in February 2016,’ said CREA president Pauline Aunger. ‘If listings in these and nearby markets were not in such short supply, January sales activity would likely have reached even greater heights. Meanwhile, other major urban housing markets have an ample supply of listings, particularly where some home buyers have become increasingly cautious amid an uncertain job market outlook,’ she added. CREA chief economist Gregory Klump pointed out that single family homes in the GTA and Greater Vancouver areas were in short supply amid strong demand in contrast to side lined home buyers and ample supply in a number of Alberta housing markets. ‘Tighter mortgage regulations that take effect in February may shrink the pool of prospective home buyers who qualify for mortgage financing and cause national sales activity to ease in the months ahead,’ he added. A breakdown of the figures shot that actual, not seasonally adjusted, is now 2.6% above the 10 year average for the month of January. Activity was up compared to January 2015 among roughly two thirds of all local markets. B.C.’s Lower Mainland and the GTA again contributed most to the national increase. Greater Vancouver saw the biggest rise in annual prices with growth of 20.56% followed by the Fraser Valley up 16.94% and Greater Toronto up 10.69%. Home prices in Victoria increased 7% and were up 5.5% in Vancouver Island. By contrast, home prices fell by 3% in Calgary, by 2% in Saskatoon, and by less than 1% in Regina. While home prices have begun to decline in Calgary and Saskatoon only fairly recently, they have been trending lower in Regina since early 2014. Prices crept higher on a year on year basis in Ottawa by 1.10%, increased by 1.48% in Greater Montreal and were up 6.57% in Greater Moncton. The actual, not seasonally adjusted, national average price for homes sold in January 2016 was $470,297, up 17% year on year but continues to be pulled upward by sales activity in Greater Vancouver and Greater Toronto, which are among Canada’s most… Continue reading
