Help to Rent
Posted: November 6, 2013 Filed under: Help to Buy, Housing benefit, Housing market, Private renting Leave a commentFor all today’s headlines about house prices, the most significant claim in new forecasts out today is that private renting will grow by another million households in the next five years.
That is one of the new forecasts for the housing market issued by Savills today and flows from its assumptions on what will happen to house prices. It comes despite the government’s flagship Help to Buy policy that aims to create more owners.
Read the rest of this post on Inside Edge, my blog for Inside Housing
Housing crisis? What housing crisis?
Posted: October 24, 2013 Filed under: Help to Buy, Housing market, Private renting 7 CommentsThe housing minister for England gave his first TV interview yesterday. I think it would be fair to say it did not go too well.
A week ago Kris Hopkins was ‘not available’ to appear on Channel 4 News to debate homelessness and house prices. This week the news peg was a 40 per cent increase in mortgage approvals and a 10 per cent increase in asking prices in London in a single month. He was interviewed as part of a package that asked ‘Is the housing market overheating?’
Interviewer Jon Snow presented him with four ‘key stats’ on completions (up slightly but still down by a third on the pre-crisis peak), house prices (up 5 per cent in a year), foreign home buyers (responsible for half of sales over £1 million in London) and the gap between prices in the north and south (up from £66,000 to £103,000 in the last year).
Here’s how it went with a few comments from me along the way.
Who buys it?
Posted: October 8, 2013 Filed under: Help to Buy, Housing market, Mortgages Leave a commentIt’s under attack from all sides but the strongest arguments for Help to Buy 2 are the ones that ministers cannot mention.
No matter how much David Cameron, George Osborne and the new junior housing minister go on about aspiration and opportunity, the critics refuse to go away. In just the latest example, the all-party Treasury select committeescorns government assurances to repeat its earlier warning that the controversial scheme will boost house prices and be politically impossible for future administrations to exit.
Here’s my analysis of the stated – and unstated – arguments made by ministers:
Read the rest of this post on Inside Edge, my blog for Inside Housing
Export market
Posted: September 21, 2013 Filed under: Affordable housing, Housebuilding, Housing market, Tax Leave a commentWhat price homes for Londoners when new developments are marketed first to overseas investors with a promise that there will be ‘no social housing’?
As The Standard reported yesterday, the ‘fully private’ flats at Capital Towers near the Olympic Park go on sale in Malaysia this weekend in what it dubs a ‘no riff raff row’.
That example comes from a report out today by Darren Johnson, a Green Party London Assembly member, who claims that a third of all buyers of new homes are from overseas and that two-thirds go to investors rather than occupiers.
He accuses mayor Boris Johnson of actively encouraging a process that leads to increasing concentration of housing wealth, a severe social housing shortage and the unnecessary demolition of existing stock and a lifetime of insecure renting for most Londoners.
Read the rest of this post on Inside Edge, my blog for Inside Housing
Silly season
Posted: September 13, 2013 Filed under: Economics, Housing market, Mortgages Leave a commentSilly? Naïve? Bonkers? Proposals by the RICS for managing house price inflation are getting about as warm a welcome in the property industry as the UN got at Conservative HQ.
Some of the reactions are just as self-interested too since an end to house price volatility would be good news for people who want to buy but very bad news for some of those queuing up to say the whole idea is crazy. While some critics point with good reason to the practical difficulties of implementing the idea, others seem personally offended by the very idea of putting a stop to the house price gravy train.
Read the rest of this post on Inside Edge, my blog for Inside Housing
Osborne’s symbol of turning a corner
Posted: September 9, 2013 Filed under: Affordable housing, Economics, Help to Buy, Housing market 5 CommentsThe venue for George Osborne’s speech claiming that the economy is ‘turning a corner’ may turn out to be a symbol of rather more than the economic recovery he had in mind.
The Chancellor was speaking at One Commercial Street, a half-finished 21-storey development of shops, offices and homes on the edge of the City of London and his choice of venue was no accident:
‘You’re probably thinking that a construction site is a strange place to make a speech. But I’ve invited you here for a reason. This development – 1 Commercial Street – began in 2007. The plan was to turn this building into 21 floors of office space, private apartments and affordable housing. Construction began; and continued at a pace. Until in 2008 the work simply stopped. Investors pulled out. Jobs were lost. And the site lay silent for three years.
‘But last year, something exciting happened. Construction began again. Today, 230 people are working here at 1 Commercial Street to complete the development – and it will open its doors next year. I’ve brought you here because this building is a physical reminder of what our economy has been through in the last six years.’
Work on the development did indeed stop in October 2008, when the concrete frame had been built as far as the 11th floor. It took three and a half years and a change of owner before housebuilder Redrow restarted work on the tower in May 2012.
So far, so good for the Osborne narrative. Work stalled by the credit crunch is finally underway but work on what? What does 1 Commercial Street really say about the nature of the recovery he was proclaiming?
Give and take
Posted: August 28, 2013 Filed under: Help to Buy, Housing market, Mortgages Leave a commentFinally I’ve found somebody who thinks that Help to Buy 2 is a good idea: the private equity owners of Foxtons.
I’m obviously exaggerating for effect here (I was just reminded of Simon Jenkins too for starters) but the London estate agent is famous for three things: its flashy sponsored Mini Coopers; the pushiness of its staff; and the timing of its sale in 2007. The founder of the company sold out to private equity firm BC Partners for £360 million just months before house prices and transactions crashed.
After a rare apology from BC Partners to its investors, and a rocky road to recovery, Foxtons is set to return to the stock market next month with a valuation of up to £500 million. That spectacular turnaround may have a bit to do with some canny financial engineering but, as the Financial Times reports this morning, it has far more to do with the fact that its timing could hardly be better.
Read the rest of this post on Inside Edge, my blog for Inside Housing
On the rise
Posted: August 13, 2013 Filed under: Help to Buy, Housing market, Mortgages Leave a commentAs the evidence for a housing market recovery mounts by the day, so is the impression that an old-fashioned dose of house price inflation is now seen as a very good thing by the government.
In a survey out this morning, members of the Royal Institution of Chartered Surveyors (RICS) report that activity is rising around the country and not just in London and the South East and that prices are up for the fourth month in a row. Yesterday, the Council of Mortgage Lenders (CML) reported that the number of loans to first-time buyers was up 30 per cent on a year ago to its highest level since the credit crunch in 2007. On Friday, the CML said buy to let lending topped £5.1 billion in the second quarter of the year, the highest since 2008.
And the DCLG published stats overnight showing that 10,000 people have registered for a help to buy equity loan in the last four months. Whether by coincidence or design, that was neatly calculated to capitalise on a housing market feel-good factor that was sent into overdrive by last week’s forward guidance from Bank of England governor Mark Carney that interest rates will stay at a record low until unemployment falls below 7 per cent (widely interpreted as meaning until 2016 at least).
Read the rest of this post on Inside Edge, my blog for Inside Housing
Home banker
Posted: August 8, 2013 Filed under: Buy to let, Housing market, Mortgages Leave a commentMark Carney’s pledge on interest rates can only make buy to let look even more of a one-way bet for landlords and the banks who lent them a cool £5 billion in the second quarter of 2013.
Figures published by the Council of Mortgage Lenders a day after the Bank of England governor made his announcement show a new surge in loans. In the three months from April to June its members made 40,000 gross advances to buy to let landlords worth £5.1 billion. Both are the highest quarterly figures seen since 2008. The number of loans was up 19 per cent and their combined value was up 21 per cent on the previous quarter. Loans were up 19 per cent by volume and 31 per cent by value on a year ago.
Rock and hard place
Posted: July 26, 2013 Filed under: Help to Buy, Housebuilding, Housing market, Mortgages Leave a commentWith the Institute of Directors on one side and Simon Jenkins on the other, where is a safe place to stand?
I blogged about Help to Buy 2 earlier this week the day before the breakfast meeting at which George Osborne would apparently reveal full details of the mortgage guarantee that will be available in January.
Nothing that happened over the coffee and croissants has changed my view about the dangers of increasing demand for housing while doing nothing about supply. The schemes that it replaces are open to criticism too but at least they were targeted at first-time buyers and new-build homes. Help to Buy 2 will available to all buyers and on secondhand properties too – and it extends state support to people on household incomes of up to £150,000. Will it trigger a boom and bust that leaves the government picking up the bill or (perhaps more likely) give future governments a direct stake in propping up house prices?
Read the rest of this post on Inside Edge, my blog for Inside Housing
Jules Birch 