Following eight months of steady progress the UK’s residential property market is picking up with prices and buyer demand rising, writes property developer Richard Carr.
Property market enjoying post Brexit growth
According to the Royal Institution of Chartered Surveyors (RICS), 8% of surveyors reported an increase in buyer enquires in September 2016, which is a significant turnaround based on June when a net balance of 34% of respondents report a drop.
Despite this small positive there’s still the major use around the supply of new homes. As a result, the number of new instructions being received by agents fell once again meaning the average level of stock on estate agents books remains close to historic lows at just over 45 properties.
Following the announcement that the government is to scrap the Help to Buy mortgage guarantee there has been a significant rise in the number of valuations for first time buyers, writes Poole-based property developer Richard Carr.
First time buyers rush to take advantage of Help to Buy mortgage
According to Connells Survey and Valuation, the number of valuations for first time buyers rose by 18.7% in September on an annual basis.
John Bagshaw of Connells Survey & Valuation believes that many first time buyers are aiming to use the scheme before it closes at the end of December, however he doesn’t think first time buyer activity will suddenly drop at the start of 2017.
Richard Carr hopes that the government are able to benefit first time buyers by building more homes as a result of removing the Help to Buy mortgage guarantee.
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.
Despite the trials and tribulations that many developers and house builders face in the UK, supply in the country’s housing market reached its highest level since March this year, writes property developer Richard Carr.
Property supply on the up – but will it continue?
The number of new homes available to buyers increased by 41% in August, which is the highest level experienced by estate agents since March 2016 when there was an average of 54 properties registered per branch.
This has resulted in there being an increase in the number of first time buyers with the National Association of Estate Agents (NAEA) reporting that the number of sales made to new property owners increased in August from 25% of total sales in July to 28%.
The Federation of Master Builders (FMB) has blamed a lack of available and viable land in the UK as to why small and medium sized builders are struggling to deliver new homes, according to propertywire.com.
Is land really an issue for construction firms?
It’s the second year in a row that a large proportion of SME house builders have cited a lack of land for not building more homes. The FMB’s research found that two thirds of SME house builders believe there isn’t enough viable land in the UK.
Furthermore, they cited problems with the planning system and difficulties accessing finance as other challenges.
Property Developer Richard Carr understands the problems and also agrees with their complaints regarding under resourced local planning authorities, as he believes the government should be doing more to help councils.
Mayor of London Sadiq Khan has given the green light to plans for the single largest regeneration development site in the capital.
How the new scheme will look fully developed
The 10,000 new homes plan on a 180 hectare brownfield site in Barking will deliver approximately 5,000 affordable properties.
The affordable homes, located on the northern banks of the River Thames, will be available to rent and buy for first time buyers.
Khan is keen to offer more affordable homes in the capital and has agreed a scheme that includes a minimum of 35% affordable from the outset, but with provisions to raise this to 50% over time through additional investment and viability reviews.
Developers and the construction industry are continuing to do their upmost to lift the country from the housing crisis with the latest figures revealing that new house building increased in July, up 5.6% on the previous year.
Output is increasing
The amount of orders being placed for new homes increased by a massive 25% between the first and second quarter of 2016, which is the highest increase since 1967 when growth rose to 44.1%.
A major factor in the increase was the amount of new orders being received in the second quarter of the year for private new houses, which increased by 28.2% to a level of £3.5billion. That level is the highest second quarter for nine years when, back in 2007, it was £3.6billion.
Once again, the quarter on quarter increase highlights that the gloomy Brexit predictions are yet to be realised.
Poole-based property developer Richard Carr is annoyed and disappointed to read that developers are being blamed for the country’s housing supply crisis.
Property Developers aren’t to blame for the housing crisis
Richard Carr has been in the industry for three decades and believes the problems start and end with the government and the restrictions that they place on developers, which slow down and prevent properties being built.
However, after analysing recent research independent think-tank Civitas has claimed that councils have granted enough planning consents to meet the government’s target of building one million new homes by 2020.
Civitas’ editorial director, Daniel Bentley, told planningportal.co.uk: “Local authority planning departments have been under enormous pressure in recent years and are frequently blamed by developers for holding up housebuilding.