The tenure trap
Posted: February 25, 2015 Filed under: Housing market, Mortgages, Private renting, Social housing | Tags: English Housing Survey, Generation Rent Leave a commentNew official figures show stunning changes in housing in England. Here are a dozen examples of what’s happening. We already knew that the number of people who own their own home has shrunk rapidly, that the number of private renters has soared and created Generation Rent and that private renting has overtaken social renting. However, the first results from the English Housing Survey 2013/14 show that these trends are not just continuing: they are accelerating. Everywhere you look in the report and the accompanying tables there are stunning new comparisons to be made:
- More people now own their home outright than are buying one with a mortgage. The split between them is not available going back very far but I reckon this must be for the first time since the 1930s, when the inter-war mortgage boom was in full flight. Here are the main tenure trends since 1980:
Helping hand
Posted: February 9, 2015 Filed under: Affordable housing, Civil service, Help to Buy, Housebuilding | Tags: George Osborne Leave a commentSo it turns out that subsidising housebuilders may not have been the best way to boost housebuilding after all.
It’s bad enough that even developers are now arguing that the government has made too many concessions to them. Now it turns out that George Osborne was warned by his own civil servants that Help to Buy could end up going to homes that would have been built anyway.
I’m catching up on a week’s worth of news that shakes the twin pillars of government policy on housebuilding and home ownership: cutting ‘red tape’ to make sites more viable for new homes and funding equity loan and guarantee schemes to persuade people to buy them.
-> Read the rest of this post on Inside Edge 2, my blog for Inside Housing
Winners and losers
Posted: January 12, 2015 Filed under: Buy to let, Housing benefit, Housing market, Mortgages, Private renting | Tags: Financial Times 2 CommentsSo buy to let landlords made £177 billion from rising house prices over the last five years – and that does not include rental income.
A series of linked stories in the Financial Times this morning make clear who the beneficiaries of booming property market have been since 2009, when interest rates fell to a record low. In addition to buy to letters, they are home owners in London (prices up by £563 billion in the last five years) and in Conservative constituencies outside the capital (prices up eight times faster than in Labour seats). Even social landlords get in on the act, with a 20 per cent increase in the value of their stock since 2009.
Yet all the research by Savills and impressive FT data visualisation beg some far bigger questions about what it calls the politics of British housing. Why has this happened? If those are the winners, who are the losers?
Brave new world
Posted: October 27, 2014 Filed under: Affordable housing, Economics, Help to Buy, Housebuilding | Tags: financial instruments, National Audit Office Leave a commentGuess what the total value of government financial instruments to support new homes will be by 2021.
The answer that leapt off the page at me in a report on the department’s performance published by the National Audit Office (NAO) last week is a cool £24 billion. And that is just the direct support that comes under the DCLG and its agencies.
Perhaps the figure should not come as a surprise. After all, ever since the financial crisis we’ve grown used to the government adopting new ways of financing things that do not rely on conventional spending or borrowing.
The three programmes that make up the £24 billion are £10 billion for financial guarantees to housing associations and the private rented sector to help build new homes, £9.7 billion for the Help to Buy equity loan scheme (HTB1) and £4.2 billion for other loans and investments such as Build to Rent and the large sites scheme.
Starter’s orders
Posted: October 3, 2014 Filed under: Help to Buy, Housebuilding, Housing market | Tags: Conservative conference, David Cameron 1 CommentWho did David Cameron have in mind when he talked about the ‘vested interests’ that are blocking new homes?
Given the effort that goes in to honing a conference speech to get the messages exactly right, and the fact that the prime minister was reading from an autocue rather than speaking without notes like Ed Miliband, it seems safe to assume that he meant exactly what he said. Here’s what he told the Conservative conference this week:
‘For those wanting to buy a home, yes – we will help you get on that housing ladder…but only if we take on the vested interests, and build more homes – however hard that is.’
-> Read the rest of this post on Inside Edge, my blog for Inside Housing
About time
Posted: September 1, 2014 Filed under: Garden cities, Housing market, Mortgages | Tags: earnings, house prices Leave a commentSellafield. Parental help. Mortgages lasting 40 years. Welcome to housing affordability in the 21st century.
Exhibit one is a survey by the TUC comparing median house prices and earnings in local authority areas across England. It finds that Copeland in Cumbria, home of the Sellafield nuclear reprocessing facility, is the only one that is easily affordable on less than three times earnings. Nowhere in southern England is affordable at less than five times earnings.
Exhibit two is an opinion poll of parents conducted by the National Housing Federation. It finds that 81 per cent of parents are worried about the impact of rising house prices on the next generation, 69 per cent think their children will not be able to buy without their financial support and 25 per cent are already saving for their children’s first home.
-> Read the rest of this post on Inside Edge, my blog for Inside Housing
Passing the buck
Posted: June 26, 2014 Filed under: Buy to let, Help to Buy, Housing market, Mortgages | Tags: George Osborne, Mark Carney Leave a commentGeorge Osborne has spent so long outsourcing responsibility for the housing market to Mark Carney that it’s easy to forget the Bank of England’s actual brief.
Far from controlling house prices, or tackling affordability or making the market less dysfunctional, the Bank’s Financial Policy Committee (FPC) ‘is charged with a primary objective of identifying, monitoring and taking action to remove or reduce systemic risks with a view to protecting and enhancing the resilience of the UK financial system’ and a secondary objective ‘to support the economic policy of the government’.
So the measures the FPC announced today on high loan to income (LTI) mortgages and a slightly strengthened stress test on lending are about preventing future house prices from increasing household debt to a level that poses risks to the financial system rather than tackling current price levels and affordability.
-> Read the rest of this post on Inside Edge, my blog for Inside Housing
In our blood
Posted: May 29, 2014 Filed under: Help to Buy, Housing market 1 CommentOn a first glance at today’s new figures, the Help to Buy mortgage guarantee scheme is failing to live up to the fears of its critics or the hopes of ministers.
The figures released by the Treasury show 7,313 sales in the first six months of the scheme. Of these, 72 per cent were for homes valued below £250,000 and 80 per cent were to first-time buyers.
Those completions account for around 1.3 per cent of mortgages over the six months so it’s hard to see how the Help to Buy 2 mortgage guarantee (HTB2) on its own can have contributed much to rising property prices.
Jules Birch 