Election update

Election update

The Election rumbles on albeit with the unfortunate interruption caused by recent events in Manchester and London which to the victims and those affected I extend my sympathy and best wishes.

The various political parties are making their individual pledges in regard to housing with all three main parties pledging to build 1 million more homes by 2022 including more social housing. All three main parties have also pledged to streamline planning to speed up the planning process but will this result in more homes of the right type in the right places?   

As the delivery of new homes creeps upwards, where is the new supply being concentrated?

Over the last few years government initiatives, including the Starter Homes Fund, Housing Zones and Get Britain Building to name a few, have been launched to help stimulate the house building industry. This plus a recovery in the housing market has resulted in a pick-up of supply taking both starts and completions in line with each other at about 150,000 in 2015/16.

In 2015/16, private completions accounted for 80% of all completions in England. The proportion of completions that destined for the private sector has been rising each decade since the 70s when they accounted for just 55%. This reflects a trend initiated by the government during the post-war period to increase home ownership, including 'Right to Buy' in the 1980s. The expansion in the availability of credit during the late 1990s and early 2000s due to mortgage securitisation and increased competition between mortgage lenders allowed more households to move into the owner-occupier market. Over the last six years, the percentage of completions that are private has averaged 78%.

New build homes accounted for 10.1% of all property sales across England and Wales (E & W) in 2016, totalling some 101,156, according to Land Registry data which provides a more-timely update of the private new build market.

Government policies aimed at helping first time buyers have no doubt helped to boost numbers, as have persistently low interest rates and rising employment.

Despite government support however, these young (and not so young) buyers are still having to find less-traditional ways to raise their share of the equity. The latest English Housing Survey estimates that 29% of first time buyers had help towards their deposits from family and friends - the so called 'Bank of Mum and Dad' has grown in recent years.

Another way to spread the burden is by extending the period of the loan and 40% of first time buyers secured their property with an initial mortgage term of over 30 years. With the average age of first time buyers at 32, many of these home owners will be paying off mortgage debt well into their 60s . which could impede their ability to help their own children at some date in the future, if they are still paying off debt of their own.

The average price paid by a first time buyer for a homes in England in January 2017 was £196,459 according to the Land Registry. This is 6.2% higher than a year earlier. Those hoping to get their first foot on the ladder may need to act quickly in some areas as average house prices rise faster than they can accumulate a deposit.

I would be happy to discuss any aspect of local housing (selling, buying or renting) so feel free to contact me by phone on 01392254488 or email chris.perring@martinco.com