Since the Brexit referendum has happened, the UK housing market has been experiencing some instability in certain areas. It has been facing major difficulties in the recent months in properties at the higher end of the spectrum and in certain geological areas. This, in turn, has resulted in uncertainty from buyers. Since 2016 the average price in the UK has gone up to over £220,000 per dwelling. Although this pricing has gone up between 2012 and 2017, the earnings growth hasn’t corresponded to this, making it extremely difficult for people to buy houses. Richard talks to us about 3 important aspects of the housing market that you could take advantage off.
A fixed rate mortgage might be the best option for you
• You remain stable for consecutive years.
• Can be used with buy-to-let properties too.
• More properties are being built and are expected to come to the market this year.
• First-time buyers can take advantage of schemes like Help to Buy to further augment choices.
Buy-to-let is still a viable option for investors
• Tax reforms left uncertainty for buy-to-let investors.
• Liverpool has increased in rents at 6.2% PA.
• Nottingham increased in rents at 6.2% PA.
• Cardiff increased in rents at 6% PA.
• Southampton increased in rents at 5.9% PA.
• Greater Manchester increased in rents at 5.9% PA.
• University towns remain a good place to invest in buy-to-let.
Affordable homes are available
• Local councils are working with private developers to make housing assessible for all.
• Shared ownership allows you to part-own or rent part of a home.
• Government schemes including Help to Buy.
• Areas such as the west of the UK are cheaper to live.
• Stamp duty has been abolished for first-time buyers if the property they are buying is less than £300,00.
While there is plenty of negative or ambivalent media attention surrounding the UK property market at the moment, official figures show that there is much to be positive about.
The British Property Federation, which represents developers like Fortitudo Property, as well as property owners and agents has just released the first set of annual figures specifically for the ‘build-to rent’ sector. The figures represent the number of homes in the UK that have been built specifically to be rented out and professionally managed.
Growth in sector
Figures from the report show that the number of build-to-rent homes that have either been completed, are under construction or in the planning pipeline across the UK has gone up by 30% to 117,893 during the 12 months up to the end of March 2018.
This sector has been boosted after the government specifically gave it a more prominent role in the national planning policy. With a strong development pipeline, it’s likely that the build-to-rent sector could double to about 200,000 by 2020.
Completions also grow
The number of houses completed in this sector was 20,863, which is a 45% increase on 2017. The number under construction has increased even more by 47%. But why is this growth happening?
As well as the government’s support for the sector, build-to-rent generally attracts long-term institutional investors as it offers a rental income stream that can pay for things like pension liabilities. And, following the government’s lead, lots of local authorities have also put their weight behind this sector, as the realisation dawns that it offers a realistic way to generate long-term, useful income and will help to meet those all-important housing targets.
Housing associations and councils are collaborating with developers more and more on build-to-rent schemes. At the moment, London has more build-to-rent developments than other regions, but these figures show that everywhere else is catching up.
Regions outside of London account for 62% of the total of build to rent houses under construction. Again, this is partly thanks to more positive and supportive attitudes from local authorities, which are welcoming more rental-focused developments.
Areas outside of the capital that are becoming hotspots for the build-to-rent sector include Liverpool, Manchester and Bristol. London is increasingly being seen as more of a challenge by developers in this sector. This is even though many mortgage owners in London face difficulties due to the lack of affordability and high house prices.
This is because developers of homes they intend to sell can construct and sell in different phases, while a build-to-rent developer must finish the whole site before renting out and seeing returns.
Fast-tracking affordable housing
London’s mayor has backed the policy changes and said that developments that come with a minimum of 35% affordable housing will be fast tracked through the planning process. However, the build-to-rent industry argues that implementing a 35% threshold for developers who are building to sell, and those building to rent, is unfair as it “cannot compete with build-for-sale on land acquisition and pricing”. But, the affordable housing targets in London will stay.
One of the major criticisms often thrown at the build-to-rent sector is that it doesn’t properly address the urgent need for family-sized accommodation, as it concentrates on smaller homes for professionals. However, the research shows that this is starting to change, with 17% of the build-to-rent schemes currently under construction or being planned include decent-sized houses, as well as apartments.
The future is here, at least in terms of houses that do everything for you. Just like we were promised decades ago, houses in 2018 can use technology to take the hassle out of every day life for their owners.
Although most people are aware of smart technology used to control appliances from a smartphone app, or speaking assistants like Alexa and Siri, every day smart homes can seem a far away prospect. While we can assume that millionaires may use technology in ever-increasingly sophisticated ways in their homes, what about the more ordinary houses?
This is where Sommar Place comes in. The housing development in Milton Keynes looks very ordinary, and that’s the point. The houses are normal, every-day houses, but utilise smart technology as standard.
So, this isn’t a dream home for the future, it’s a home for now. They’re not for the superrich, but affordable homes for expanding families. Using this kind of interconnected technology will very soon be expected as standard for new developments.
The 39 houses were developed by Swedish builder Trivselhus, using Scandinavian energy efficient design along with the most up tod ate smart home tech by Apple.
The system is fully interconnected throughout each property and is both easy to use and fully customisable. People who live in these houses can programme their home to do everything they want. For example, it’s possible to instruct the house to put the kettle on in the morning, programme the lights to come on at a specific time, or warm the towel rails in the bathroom as you’re waking up.
Automated from outside
Residents can also automate the house when they’re out, based on when they’re due to come back. For example, setting a customised programme named ‘coming home’ would make sure the lights come on, the heating is at the correct temperature and music is playing as they arrive home.
An Apple watch and an iPad come with the house, and residents can instruct their house using Siri, as well as Apple TV and HomePod.
What about privacy?
These days, many people are worried about the impact of interconnected technology on their privacy. This system uses end-to-end encrypted security to ensure that whatever residents do remains behind their closed door.
Previously only available in multi-million-pound bespoke homes for the very wealthy, this is the first time integrated smart tech has been used in affordable homes from the outset. While it’s possible to retrofit any home, this development is paving the way for technology to become standard in new developments.
Ken Forster is the MD of Tivselhus. He said: It’s our mission at Trivselhus to develop family homes that have a positive impact on how people live. Technology is essential in easing people’s lives, so it is important that moving forward family homes are designed with smart home technology at their fore.”
Any home of the future built in 2018 also has to consider the environment. Technology is not enough to make it cutting-edge, and these houses are built to sustain extreme climate change due to something called Climate Shield.
This is a mineral wool insulation system that, along with air tightness incorporated into the closed panel timber frame walls, ensures a level of protection that will last into the future. Added to this impressive manufacturing, the houses can be assembled in just one day.
Manual control is also possible, as technology can always go wrong. Day to day, the technology will seamlessly, efficiently and unobtrusively make life easier. This kind of development will one day be standard, and it’s exciting to see it take shape in real terms for people looking for an affordable and future-proof property.
The start of a new year is always a good time for property investors to take stock and decide where their portfolio should go in 2018.
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Successful property design is about far more than just thinking about ROI (return on investment). No matter how stunning a building looks from the outside, it must also fit in with the local environment and complement its surrounding natural beauty. Continue reading →
Blockchain technology underpins the much talked about Bitcoin – the leading cryptocurrency. If you’re not sure what blockchain is, then think of it as a permanent ledger used to record transactions. In addition to being user generated, it’s also tamper proof and therefore represents an unassailable record of proof. And its potential for use in the property sector are wide ranging. Continue reading →
Richard Carr, a Poole-based property developer, believes that investment into new housing should be spread fairly across towns, cities and counties in the UK. The Housing and Finance Institute believes more money should be given to councils in districts that are leading the way as they are currently under resourced.
According to the Institute, large cities in the UK receive higher amounts of investment, however they are responsible for only around 30% of new homes.
The HFI’s report found that around 70% of new homes and granted planning permissions are in the district and unitary councils, who are facing resource problems.
Mayor Sadiq Khan is building on his commitment to provide more affordable homes by launching a new tenancy scheme to help renters save money for their home deposit, writes property developer Richard Carr.
London Living Rent
Can the Mayor help improve the housing situation in London?
The London Mayor made making London more affordable to live in one of his commitments when he took over from Boris Johnson earlier this year. The early details of the London Living Rent outline proposals to help average earners in London save for a deposit by offering them a below market rent based a third of average household incomes in each borough.
Although the scheme is in its infancy, Khan has already began discussions with housing associations and boroughs to kick start the delivery of new homes.
On top of his tenancy scheme, the Mayor has also signalled his intention to protect London’s stock of social housing for those on low incomes.
According to propertywire.com new measures in the UK’s updated Neighbourhood Planning Bill will support more house building and will give local councils more say over housing developments, writes Richard Carr.
Will the new bill speed up the delivery of new housing?
New Housing and Planning Minister Gavin Barwell has promised that the new bill will speed up and strengthen the neighbourhood planning process by making it easier for plans to be revised if local circumstances change.
Barwell told propertywire.com: “We need to build more homes and this Bill is the first of a number of measures to deliver on that. We have already built more than 900,000 homes since 2010 and now this Bill will help speed up delivery of the further new homes our country needs and ensure our foot is still firmly on the pedal.