Going up
Posted: July 22, 2013 Filed under: Help to Buy, Housing market Leave a commentIs it too late to mitigate the impact of the impending disaster that is Help to Buy?
As the government prepares to reveal more details of the mortgage guarantee element of the controversial scheme (probably tomorrow), the evidence is already accumulating of the effect of early impact of Help to Buy plus the boost to mortgages delivered by the Funding for Lending scheme.
Mortgage lending is up, asking prices are up for seven months in a row and reservations under the equity loan part of Help to Buy are up by almost three times on the more limited and targeted FirstBuy scheme that it replaced. So too are forecasts of what will happen to prices over the next few years.
Read the rest of this post on Inside Edge, my blog for Inside Housing
Own goal
Posted: June 17, 2013 Filed under: Help to Buy, Housing market, Mortgages Leave a commentAs average asking prices pass £250,000 for the first time, two-thirds of the under-45s seem to have given up on the idea of ever owning a home.
Two surveys out today underline the point that what’s ‘good news’ for existing owners is exactly the opposite for people struggling to get on to the housing ladder.
Rightmove says that the market in the ‘under-priced’ (its word not mine) South East has ‘lifted off’ with asking prices rising by 14.8 per cent in the first six months of 2013 alone. However, the average increase across England and Wales is 10.4 per cent and the increase is even 5.8 per cent in the least buoyant region, the East Midlands.
If anything like that was repeated across the whole 12 months, 2013 would be appear to be set for a boom unlike anything seen since the credit crunch hit in 2007. True these are asking prices and prices actually achieved are still in the relative doldrums but they indicate that existing owners are reacting predictably to the start of Help to Buy by ramping up their demands.
Contrast that with another survey out today from the Halifax.
Read the rest of this post on Inside Edge, my blog for Inside Housing
Too close for comfort
Posted: May 20, 2013 Filed under: Help to Buy, Housing market, Mortgages Leave a commentSir Mervyn King’s weekend criticism of Help to Buy leaves George Osborne looking more isolated than ever in his plan for government mortgage guarantees.
King steps down as governor of the Bank of England at the end of June but even so his comments on Murnaghan on Sky News on Sunday are quite a parting shot. Asked how the Bank of England would end a scheme of which it is the ultimate guarantor, he said that:
‘Well I’m sure that there is no place in the long run for a scheme of this kind, this scheme is a little too close for comfort to a general scheme to guarantee mortgages. We had a very healthy mortgage market with competing lenders attracting borrowers before the crisis and we need to get back to that healthy mortgage market. We do not want what the United States have which is a government guaranteed mortgage market and they are desperately trying to find a way out of that position so we mustn’t let this scheme turn into a permanent scheme.’
Read the rest of this post on Inside Edge, my blog for Inside Housing
Squeezed out
Posted: May 17, 2013 Filed under: Affordable housing, Housing market, Private renting Leave a commentHere are some thoughts on an event I’ve just chaired for the Resolution Foundation yesterday on the scale of the housing crisis and how to fix it.
Rather like most of my blogs, I thought it would be stronger on the first bit than the second, but the debate revealed a new willingness to look for solutions as well as more reasons to be gloomy.
The centerpiece was a sneak preview of some forthcoming research from the Resolution Foundation and Hometrack on the housing plight of low and middle income households. The foundation is a think tank focused on the 5.6 million people caught in the squeezed middle between stagnating wages and rising costs.
Read the rest of this post on Inside Edge, my blog for Inside Housing
Dead cert
Posted: May 10, 2013 Filed under: Buy to let, Housing market, Private renting Leave a commentSo, three years after it was pronounced dead, can anything stop buy to let squeezing out owner-occupation?
Figures from the Council of Mortgage Lenders (CML) yesterday showed that loans to landlords accounted for 13.4 per cent of the £165.6 billion worth of outstanding mortgages in the first quarter of the year. That’s up from 13.0 per cent in the fourth quarter of 2012 and just 9.8 per cent at the start of the credit crunch in 2007.
All of which makes it easy to forget that it was only three years ago when the last rites were being delivered for buy to let by probably its best-known pioneers, Fergus and Judith Wilson. The former teachers built a 700-home empire but by 2010 they were bailing out and telling The Guardian that buy to let was ‘absolutely dead and will never return’.
Read the rest of this post on Inside Edge, my blog for Inside Housing
Wake-up call
Posted: May 3, 2013 Filed under: Housing market, Mortgages Leave a commentThe interest-only mortgage is the housing scandal that just keeps coming back.
In the 1980s it was all about the mis-selling of endowment mortgages. In the 2000s it was about selling as many mortgages as possible without caring too much about whether there was a way to repay them. In the 2010s and 2020s it will be about dealing with the consequences – and who pays for them.
Read the rest of this post on Inside Edge, my blog for Inside Housing
Debating downsizing
Posted: April 24, 2013 Filed under: Housing market, Planning Leave a commentSo it turns out that the Daily Mash has the answer to the housing crisis: build more bungalows but make them stackable.
As ever, Policy Exchange has succeeded in identifying a problem – the distribution of housing between old and young – and coming up with a media-friendly solution that sees planning as the villain of the piece. The ‘return of the bungalow’ for elderly downsizers has duly made all the headlines this week.
The problem with bungalows – and the reason why so few are now built – is that they don’t make financial sense in areas with high land prices where the affordability crisis is most acute. No housebuilder or housing association in their right mind would use scarce and expensive land in such an inefficient way. Existing bungalows tend to cost more than bigger terraced homes but only because of the potential to knock them down and redevelop their large plots. As the RIBA revealed yesterday, the average new-build one-bedroom home is now not the size of a spacious bungalow with a garden but of a London tube train carriage.
Read the rest of this post on Inside Edge, my blog for Inside Housing
Beyond help
Posted: April 21, 2013 Filed under: Budget, Housing market, Mortgages Leave a commentIt’s hard to remember a more damning select committee report than the one just published on Help to Buy – and it has not even started yet.
You don’t even have to read between the lines of the Treasury committee report on the Budget to detect its doubts about a policy announced by chancellor George Osborne last month. It leaves him with a string of questions about how it will work and a list of concerns about unintended consequences.
Read the rest of this post on Inside Edge, my blog for Inside Housing
Buy, buy, buy
Posted: April 9, 2013 Filed under: Housing market, Right to buy Leave a commentThe first part of my analysis of Margaret Thatcher’s housing legacy looks at the right to buy and the property-owning democracy.
The death of the former prime minister got me thinking in what I hope is a dispassionate way about what her time in office meant to housing.
What seems to be undeniable is that the right to buy represented a sea change. Many people would nominate British Gas or British Airways or BT as her greatest privatisation but council housing was bigger than any of them. Some 1.5 million homes were sold between 1979 and 1990 (500,000 of those between 1979 and 1983). Capital receipts from the right to buy totalled £17.6 billion between 1979 and 1989 compared to £23.5 billion from all the other privatisations put together.
It is the one housing policy that is being mentioned in all of the obituaries and hagiographies in the national media but the truth about Thatcher and the right to buy is more complex that you might think.
Jules Birch 