Why are house prices rising around the world?

Posted: August 20, 2021 | Author: | Filed under: Coronavirus, Germany, Housing market, Inequality, Netherlands, USA | Leave a comment

Originally written as a column for insidehousing.co.uk

News that house prices are rising at their fastest rate since 2004 highlights both the perverse effects of the pandemic and long-term problems with affordability.

Average prices across the UK rose by 13.2 per cent in the year to June according to the official UK House Price Index  with Wales and the North of England leading the way.

While a low level of transactions suggests a need for some caution in interpretation, the same pattern has emerged in other house price surveys of double digit inflation led by regions outside London and the South East.

That confounds expectations at the start of the pandemic of recession about a declining market. The stamp duty holiday announced last Summer looks like an expensive mistake that has just helped fuel house price inflation.

In normal circumstances a bust might well follow the boom but continued support for the market will come from the estimated £180 billion in savings  that households have built up during the pandemic and the wealth gap  between housing haves and have-nots seems set to widen still further.

There is evidence of the same pattern emerging in housing markets around the world: annual house price growth across the 38 richest nations has more than doubled during the pandemic to hit 9.4 per cent, according to the OECD.

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Shopping for homes

Posted: August 12, 2021 | Author: | Filed under: Coronavirus, Local government, Permitted development, Planning | Leave a comment

Originally published on August 12 as a column for Inside Housing.

Walk down most High Streets in the country and you’ll see empty shops and offices. What’s the best way to turn them into homes?

That’s the question this month’s extension of permitted development rights (PDR) in England attempts to address but is the answer as simple as the government makes out?  

PDR for residential conversion has applied to some commercial buildings since 2013. But the regime has now been significantly expanded to more types of property and in some cases its demolition and replacement as well as conversion.

The results look they will be significant. Enthusiastic analysis by Nimbus Maps, which advises developers, says that around 31,000 properties and more than 8m sq m of floor space could be converted into 135,000 two-bedroom flats. The combined value of the buildings would almost double from £23 billion with commercial use to £43 billion as residential, it says.

A much more sceptical, but equally dramatic, view comes in research by University College London for the Town and Country Planning Association: based on case studies of Barnet, Crawley, Huntingdonshire and Leicester, it concludes that the total floorspace eligible for residential conversion will double under the new regime.

In terms of housing, the issues may seem straightforward. What’s  the problem if the policy could create so many extra homes in buildings that would otherwise lie empty or under-utilised?

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