New figures indicate that average British residential property rental values rose significantly within the year to July 2016.
Many Britons are finding it increasingly hard to step onto the property ladder. According to Letting Agent Today, Tony Williams of property consultancy Building Value recently noted that at present, “the house price to earnings ratio remains around 5.5 times against a long term average of 4.25 times.”
Previous research shows that despite Brexit, the UK’s housing market remained strong in June 2016. A new study from CBRE, a leading commercial property adviser, indicates that sturdy economic fundamentals will support British house price growth throughout 2016.
Encouraging price growth
Property Wire writes that CBRE sees current British house value growth of 5.1% as encouraging. The commercial property adviser added that UK residential property prices should expand by an average of 3% in 2016. In the second quarter of 2016, house price growth was strongest in the Outer Metropolitan area (12.4%) and London (9.9%), but weakest in the North (1%), year-on-year.
Despite the many warnings and concerns that were raised ahead of the UK’s referendum in June about a possible collapse of the housing market, the industry has remained strong according to the latest analysis.
The majority of property planners believe that a more stable planning system would provide greater certainty for developers and communities and help get the country building again.
According to recent research from the Royal Town Planning Institute (RTPI) an overwhelming majority of planners blame decades of planning changes for their ability to work effectively and deliver new homes.
TheDelivering the Value of Planning report showed that a massive 73% of planners believe “constant changes” to planning rules have “hindered their ability to deliver good places”. Richard Carr, a property developer in the south of England, understands the problems and believes the government needs to loosen its grip on the system and make it easier for planners to deliver new developments.
Over half of respondents said that government policy changes had provided obstacles to the delivery of new homes, whilst almost 75% said that the profession had a reduced capacity to deliver.
The finger has been pointed at many possible reasons, but who or what is responsible for the current state of the country’s housing shortage?
Who is to blame for the housing shortage?
Poole-based property developer Richard Carr has worked in the industry for 30 years and has seen just about everything. He’s currently managing a number of high profile developments in the south of England including the £100m redevelopment of Salterns Marina in Poole.
New analysis produced by the London School of Economics has pointed the finger squarely at the government for the housing crisis, explaining that decades of planning policies that constrain the supply of houses and land and turn them into something like gold is to blame.
RIBS believes that housing policy along isn’t enough to solve the UK’s problem as the demand for homes continues to outstrip the supply. They believe that as one the private and public sector can promote, enable and finance new homes and improve the final quality.
Along with the crippling shortage of homes, homebuilders have come under pressure for the standard to which new homes are being produced.
RIBS’ report said that high quality design needs to be at the heart of the solution: “Without it, we’ll be solving one problem by storing up further challenges for the future,” they said.
New PM Theresa May is believed to be considering paying Community Infrastructure Levy (CIL) directly to local residents in a bid to gain support for new developments, writes property developer Richard Carr.
Is CIL damaging house building?
The news comes after she announced proposals for cash from a scheme to share the proceeds of shale gas revenues to be handed straight to households.
The move is a step away from the first announcement in last year’s Autumn Statement when it was understood that shale revenues would go to community trusts and local authorities.
But Number 10 said that the new government has “changed the consultation to ensure a greater focus on control for local communities – including insisting on proposals to transfer funds directly to households rather than local authorities”.
There has been more good news for the property market this week with new data showing that the number of planning application approvals for new homes in London has increased by 46% on last quarter, writes property developer Richard Carr.
Planning approvals on the rise in the capital
Richard Carr believes this rapid increase shows that there is plenty of confidence in the market at the moment with planners putting more applications in and authorities working quicker and more effectively to get them approved.
If the government are to have any chance of getting the country out of the current housing crisis this has to continue.
In the second quarter of 2016 some 6,310 new homes were approved out of a possible 8,280 applications, an approval rate of 76%, according to the London New Homes Monitor from estate agents Stirling Ackroyd.
Real Estate firm Savills believes that the UK’s decision to leave the European Union has potentially opened up profitable opportunities for overseas investors, writes property development expert Richard Carr.
Although Brexit created some uncertainty for farm land values in the UK, Savills believes that the weak pound creates a favourable buying environment for overseas investors, whilst the reduction of supply may help to support values.
“The full impact of Brexit on all of the UK’s property markets will be very dependent on the macroeconomic background and the evolution of the story over the next two to three years. We must stress it is early days and there are many unknowns,” said Ian Bailey, head of rural research at Savills.
“Uncertainty is the key factor and it is very likely that farmland market activity in the second half of this year will be more subdued as potential sellers wait and see. Our research shows just over 100,000 acres were publicly marketed across Great Britain in the first half of 2016, which was on a par with activity for the same period of 2015.”