In another rather bold claim, the government announced that it has turned around the housing market making the dream of homeownership a reality, writes Richard Carr.
Home owners on the rise
Has the government turned around the housing market?
Housing Minister Brandon Lewis’ claims are substantiated by the latest figures which show more than a decade-long decline in the number of people owning their home has been turned around with more than 14 million owner occupiers on the UK in 2013.
“Hard-working families across the country are getting the chance to realise their dream of homeownership,” said Lewis.
“In 2010 there was a housing market where buyers couldn’t buy, builders couldn’t build and lenders couldn’t lend.
“Our efforts are turning that around with more than 270,000 families helped into homeownership through government-backed schemes since 2010, while the number of new homes is up 25% over the last year.”
Richard Carr recently spoke about Ministers’ plans to increase planning fees for well performing councils, however experts have thrown doubts upon the claims that developers and planners will benefit from better resourced planning authorities.
Will developers benefit from paying increased planning fees?
The government initially outlined the increases as being a positive for planners who would see the application process quickened thanks to the extra resources available to local planning authorities. However, experts have revealed to planningresource.co.uk that the expectation on councils to reduce the ‘cross subsidy’ planning authorities currently receive from tax payers could mean only small increases in budget.
A Department for Communities and Local Government consultation set out a number of ways in which it proposed the increases could be introduced. Ministers wanted the increases to go to authorities that had performed well over the past few years and also added that another approach could be to limit increases to “those authorities that are in the top 75 per cent of performance for both the speed and quality of their decisions.”
Property developers and building firms could be expected to pay more in planning fees for the first time in England since 2012, following an announcement from the government, writes Property Specialist Richard Carr.
Do application fees need to rise?
The increase wouldn’t be nationwide, but only available for the well performing councils who could put the fees up in line with inflation.
Communities Secretary Greg Clark stated that the government would consult on the plans and he told MPs that the flexibility would be granted to councils: “providing that the revenue reduces the cross-subsidy that the planning function currently gets from council tax payers”.
Back in 2012, planning fees were increased by 15% when Clark was acting as the minister and this latest announcement is the second time in recent weeks that the government has indicated its intent to bolster the resourcing of local planning authorities.
It has been reported in the Financial Times this week that pressure is being piled on the country’s biggest housebuilders by Westminster, writes property developer Richard Carr.
The government has called on housebuilders to speed up construction
At the time, many thought the government’s announcement that it would seek to build 1million homes by 2020 as ambitious – and that sentiment is even stronger a year later.
As a result, the Westminster has turned on Britain’s biggest housebuilders to increase construction speeds to meet the acute shortage of homes. Senior members of the Conservative party have also expressed concerns over the quality of design of new homes and the lack of small and medium-sized housebuilding firms.
A rather unwelcome resolution proposed by the government is to force developers that buy publicly-owned land to commit to rapid construction, an idea Richard strongly disagrees with.
First time buyers are benefitting from the Help to Buy ISA
The initiative, launched in December 2015, has seen over a quarter of million people open up one of the financial products. Encouragingly, more than half of those signups were made my people aged 30 and under.
The scheme allows savers to be given a maximum of £3,000 by the government to help them purchase their first home. Savers can put away £200 a month into the dedicated ISA with the government topping it up by 25%; the first bonus was paid to savers this week who opened up an account in December.
For couples aiming to save for their first home, individual accounts can be opened which amounts to a potential boost of £6,000.
Other Help to Buy schemes such as the mortgage guarantee and equity loan have also proven popular with over 100,000 home buyers involved.
Finally, the government provides developers with some motivation
In a bid to help meet the government’s 2020 target of building 200,000 per year, it has put 600 acres of surplus public sector land on the market. They hope it will deliver tens of thousands of new homes, boosting local growth across the country.
Richard Carr still believes there is more the government can do in terms of policies around planning, but does see the move as a positive step and proof that they are serious about getting the country building again.
Housing Minster Brandon Lewis has urged property developers to use this opportunity to build the homes “hard-working people” want and deserve.
Communities’ secretary Greg Clark last month proposed an amendment to the Housing and Planning Bill would give the government new powers to: “test … the benefits of allowing planning applicants to choose who processes their planning application.”
The process could potentially price planners out of quick permissions: “the competition is expected to create a more diversified offer in terms of the speed and fee of services available to planning applicants”. It suggests that approved providers and local planning authorities participating in pilot schemes “may offer a guarantee to process planning applications more quickly in return for a higher fee (a ‘fast-track’ service).”
That dream of getting on the property ladder for first time buyers across the UK continued to get more expensive during 2015 with gains of £385 billion on British housing stock, writes property developer Richard Carr.
Homes prices have soared in the past year
Research for estate advisors Savills highlights residential property becoming an increasingly important store of wealth. Currently, total equity stands at just under £5 trillion net of borrowing, which is equivalent to over 2.7 times the GDP of the UK.
Since 2005, the total value of the country’s homes has risen by over £1.6 trillion, however 75% of that figure was achieved over the past three years. The rise now means that the UK’s 28.2 million homes now have an average value of £218,474, an 18.9% increase in five years.
Richard Carr believes that this highlights the many barriers that both developers and home building firms currently face. The main hurdle – and one that has plagued the industry for many years – is a dire skills shortage. Last year councils granted 212,478 planning permissions for homes, but a lack of skills, increased costs and cuts to margins has seen building slow down.