Jennet Siebrits' comments....

Comments, musings and updates from our Head of Residential Research, Jennet Siebrits

The Budget 2016, a view from CBRE...

We are disappointed that the additional 3% stamp duty levy to buy-to-let will also apply to larger investors. The effect of this tax has the potential to deter much needed institutional investment in an embryonic build to rent sector. In turn, it may also further worsen the current fundamental issue of an under supply of housing.

The government should instead look to unlock the issues that house builders both in the private and rental sector experience. With a continued rise in construction costs and an underpinning lack of capacity, we have witnessed a 31% fall in building apprenticeships since 2009.

By better supporting the industry to build more homes, it will allow the Chancellor to meet his targets of over 250,000 new homes each year - the last time this target was achieved was between 1979-1980. We are concerned that today's measures will do little to address this housing shortage, and may in turn have the potential to discourage vital institutional investment right across the UK.

 

17th March 2016

Government to step in unless local authorities agree to build thousands of new homes

Last week David Cameron warned that the government would step in unless local authorities agree on where to build thousands of new homes by 2017. The government will take responsibility for planning away from councils if they fail to agree plans to build thousands more homes.

We welcome any solution aimed to help drive and bolster house building across the UK, however these changes will not be well received by many local authorities and this will in itself cause further delays as another policy requirement is introduced into the negotiations on housing sites.

The measures proposed to create a further 200,000 new "affordable" homes will inevitably help many of today's aspiring home owners to get on to the property ladder sooner. However, we must also look to the rental market to ensure that there is enough appropriate housing for all.

Fundamentally we must build more homes across the country in order to meet an increasing demand. This means that the Government should now look to review many of the underlying causes in the construction industry which can unlock the problems that house builders in both the private and rental problem experience. The rise in construction costs and lack of capacity, where we have seen a 31% fall in building apprenticeships since 2009 is front and centre of this problem.

 

11th October 2015

House prices edge up in July...

Data released today by Nationwide Building Society, show national house prices edged up 0.4% in July. This takes the annual rate of growth to 3.5%, up from 3.3% in June.  This confirms our recent findings that the recent slowdown in growth has now reached a plateau. We expect the market to revert to more normal levels of growth later in the year.

 

4th August 2015

PwC expect generation rent will continue to grow

Having more than doubled since 2001, the number of UK households in the private rented sector is now 5.4 million and PwC predict this trend will continue; by 2025 there will be another 1.8 million private rented households representing 25% of the UK total. The younger generation will be main driver of this trend with more than half of 20-39 year olds living in private rented accommodation in ten years’ time. 

 

23rd July 2015

House market activity on the up

It seems that housing market activity is finally picking up. Latest data from the CML show that Gross mortgage lending in June rose by 29% (compared with May) to an estimated £20.5 billion. The large increase in June is likely to partly reflect a subdued pre-election month in May, but nonetheless all signs now point to a modest recovery being underway.   

 

20th July 2015

Nationwide data released today...

According to Nationwide data released today, the pace of house price growth has slowed further this quarter continuing the gradual downward trend that has been in play since mid 2014.  The price of a typical UK house rose by 1% in Q1 2015 and now stands at £194,258. This monthly increase takes the annual growth rate to 4.1%, which compares with 5.9% last quarter. However, with signs that activity is starting to pick up we think that the moderation in house price growth has probably run its course. 

 

6th July 2015

Heathrow it is then..?

Today, the airports commission announced its long awaited decision and has, as expected, recommended Heathrow as the site for a new runway in London. I agree with my colleague Miles Gibson, who earlier today stated the announcement was excellent news for both the local areas commercial property markets. He stressed there would be particular potential for retail, offices, logistics facilities and hotels to benefit.  It will however, be a long wait; the government now have a 320 day consultation period. This takes us more or less to the Autumn Statement, so expect to hear more then.  

Read more here.

 

1st July 2015 

 

We are just not building enough homes to rent...

Private renting no longer caters just for the needs of the ‘pre-home ownership’ young workers. In particular, people are renting longer and often well into early family years. This, coupled with an increasing population has driven up the share of private rental households in London to 30% (there were an additional 247,000 rental households last year alone). Given this trend we conservatively estimate a demand for 216,000 extra private rental homes in the next six years. However,  this will not be matched by supply.  Although the build-to-let sector is beginning to gather pace, there are still just 99 developments across the city which are earmarked for private rental. These are set to deliver 12,380 units to the rental market.  This, combined with individual investors purchasing units in “for sale” schemes, will bring forward a total pipeline of 160,000 rental units. Around 35% less than is needed…

 

26th June 2015

Land registry data out today...

shows that house prices have remained unchanged over the month. However, this follows a strong gain in April.  Average prices  in England and Wales now stand at £179,696, which is just 1% below the peak in 2007.

 

26th June 2015

According to the latest RICS survey...

the number of buyer enquires has increased this month at the fastest rate for over a year. In contrast, new instructions continue to fall. As a result the supply of housing for sale is at a record low. Unless this dynamic changes, prices will continue to rise significantly especially in the worst affected areas. 

 

11th June 2015