October 21, 2017

#23 Your round-up of the latest property market commentary

Housing and homebuilding

Theresa May lays down a challenge for developers: Keen to act on her pledge at Conservative Party Conference to fix the broken housing market, the Prime Minister summoned the largest developers, housing associations and representatives of local authorities to encourage greater sector output. The government said it was in listening mode’, welcoming an opportunity for those in the industry to set out what more they feel the government could, and should, be doing to help the UK’s housing crisis. Read more.

Prospect Magazine: start small to build more homes: With an 80% decline in the number of small housebuilders active since 1988, Prospect and LendInvest hosted a roundtable at Conservative Party Conference exploring the contribution and potential of SMEs. Now more than ever, it is clear that the UK needed to make the political decision that it values its smaller housebuilders and property developers. Read more.

Government responds to parliamentary committee recommendations on housebuilding capacity: The government has set out responses to the Communities and Local Government Committees’ recommendations on measures to improve capacity in the homebuilding industry. Government summarises in its responses how its proposals in the Housing White Paper and other announcements address the recommendations in the Committee’s report. , It didn’t support the recommendation to lift the council borrowing cap.  Full report here.

All government departments have a role to play in solving the housing crisis: The editor of Inside Housing praised the Prime Minister’s initiative to lay down the challenge to housebuilders by calling the largest developers, social housing providers and local authorities in to urge them to do more. Emma Maier argues that to avoid the summit being left as a talking shop, all government departments have a role to play, from the Department of Health to the Business department. In LendInvest’s report, Starting Small to Build More Homes, we recommend that DCLG works with the Small Business Minister to increase competition, and ultimately promote new entrants to the sector. Read more.

HFI says builders should be allowed to build less affordable housing: Builders should be allowed to provide lower percentages of affordable housing, a new report by the Housing Finance Institute has recommended. It’s chair, Sir Mark Boleat, has said that developers are constrained by an onerous planning system and lacking access to land. By allowing developers to build less affordable housing, overall supply could be increased, the report says. The report’s recommendation was criticised by John Healey MP, the Shadow Secretary of State for Housing, calling it “out of order”. Read more.

Dame Barker says homes target may never be met: Author of the influential report from the early ‘00s that urged the government to build 285,000 homes each year has said that government targets may never be met. Dame Kate Barker, formerly a member of the Bank of England’s Monetary Policy Committee, has urged the Government to come up with new policies to help buyers and renters or there will never be enough houses built to keep prices down, she said. Read more.

Property prices

House prices rise 5% a year: ONS data shows the average UK house price rose by £1,000 in August to reach £226,000. The increase took the annualised rate of house price inflation to 5%, up from 4.5% in July and more than double the rate of pay settlements across the country. Read more.

London house prices fall further: Where house prices remain buoyant outside the capital, London has seen prices falling for the sixth consecutive month. If the provisional estimates are confirmed, the average price of a home in the capital was less than 582,000, the lowest since the end of 2015. Read more.

Property taxation

Stamp duty reform expected at Budget:  Chancellor Philip Hammond has signalled that there may be some reform on stamp duty at next month’s budget. He said that intergenerational unfairness would be the focus of the policies announced, sparking speculation that a cut in stamp duty for new homeowners may be on the cards. Read more

Markets

Property transactions fall as interest rate rise expected: According to a RICS survey, home purchases fell in September as expectations of a rate rise increased. When broken down regionally, London and the South East were at the forefront of the decline in sales, but weakness in transactions was widespread during September. In fact, only Wales and the South West were cited to have seen an increase in sales, while all other parts of the UK saw sales flat. Read more.