Has the government started to turn around the housing market?

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

Richard Carr New Build Homes

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.”

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Will increasing planning fees benefit developers?

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.

Resource

Richard Carr Planning Approved image

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.”

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Application fees likely to rise for first time in four years

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.

Resources

Richard Carr Planning Permission s106

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.

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Do housebuilders need to speed up construction?

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.

Target

Richard Carr Construction Image

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.

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Help to Buy savings account proving a big hit

Property specialist Richard Carr has previously hailed the government’s initiatives to assist first time buyers and is pleased to see people taking advantage of the government’s Help to Buy deposit saving financial product.

250,000 sign ups

Richard Carr First Time Buyers

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.

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Government puts surplus land up for sale

Positive news emanated from the government at the end of January with David Cameron and his team announcing that hundreds of acres of land would be put up for sale to help boost house building in the UK, writes property developer Richard Carr.

600 acres

Richard Carr Starter Homes image

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.

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Premium planning fees set to be piloted

In a radical move by Ministers, private planning providers could be permitted to charge applicants ‘premium’ rates to fast-track the processing of their planning applications under a controversial pilot scheme to open the system up to competition, writes Poole-based property developer Richard Carr.

Picky planners

Richard Carr planning refused

Will ‘premium’ planning fees improve the system?

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).”

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Britain’s housing value hits £6 trillion

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.

Wealth

 

Richard Carr image of UK homes

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.

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Construction costs soaring as London hit the hardest

The recently published International Construction Costs Index has revealed a worrying statistics that could seriously effect development in London, writes development specialist Richard Carr.

Rising costs

Richard Carr Construction Image

Construction costs soaring

The report, commissioned by global design and consultancy business Arcadis, found that London is the most expensive city in Europe and the second most expensive city worldwide in which to build.

Only New York tops London across the globe with the report revealing that cost premiums in the top cities range from 40% to 60% in comparison with other European counterparts.

Cities like Doha and Dubai rank low down in the top 20 thanks to the low cost of labour and energy.

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Where are all the builders?

Another year, but still the same old problems for the construction industry as a skills shortage continues to prevent the industry growing says development specialist Richard Carr.

Planning permissions reach record high

Richard Carr Builders

Where are all the builders?

Based on a study commissioned by the Local Government Association, planning permissions from last year were up 25% on three years ago. However, almost half million approved homes remain empty spaces yet to be constructed upon.

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.

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