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House building doubles within 10 years in the West Midlands

The number of homes built in the West Midlands last year doubled compared to the start of the decade, according to official figures.

Nearly 17,000 homes were built during 2018/19 – a 15 per cent rise on the previous year and twice the national average increase. The total compares to just 7,500 homes built in 2011.

The building programme has provided a major boost to housing bosses who are under pressure to create 215,000 homes in the region over the next decade in order to meet demand for the growing population.

The West Midlands Combined Authority (WMCA) has pledged to identify brownfield land for new homes, to regenerate run-down sites and avoid building on open green space where possible.

These sites include Friar Park in Wednesbury where 750 homes will be built on a former sewage works and Steelhouse Lane in Wolverhampton where 150 homes will spring up on industrial land.

Gareth Bradford, WMCA director of housing and regeneration, said the West Midlands economy was growing faster than any other region outside London but this growth and the thousands of new jobs being created was driving ever higher demand for housing.

He said: “These figures are great news for our region and show how the West Midlands is leading a house building revolution in the UK.

“We are turning derelict land into vibrant new communities and developing new modern, construction methods so we can build more homes at pace. At the same time we are training local people in the skills needed to build these new homes.

“Ultimately we want to make sure everyone has the opportunity of a decent home and a worthwhile job but making sure we have enough homes in the future is a major challenge and there is still much to do.

“The good news is that since 2011 we have doubled the number of homes being built each year and these latest figures show how we have already hit the average annual rate we needed to hit in 2031.

“So this collective effort by the region, which has seen councils, local enterprise partnerships and others working together through the WMCA housing and land delivery board, has radically closed the gap between what we planned to deliver and what has actually been delivered while all the time retaining a focus on brownfield land.

“This underpins the commitment we gave to Government in our Housing Deal last year so it’s great to see the region turning ambition into a reality that people can see and touch.”

The need to meet housing targets has also seen counties surrounding the Black Country and Birmingham asked to help meet the demand.

South Staffordshire Council has said it is inevitable some green belt land will have to be built on in order to meet demand.

By Richard Guttridge

Source: Express & Star

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Nearly 200 homes planned for former secondary school site in Wolverhampton

Almost 200 flat-pack homes are set to spring up on the site of a former secondary school in Wolverhampton.

Northicote School in Bushbury was reduced to rubble in July last year.

Now 196 homes could be built in its place in Northwood Park Road with the timber-framed houses built at LoCal Homes in Walsall before being put together on site.

Several meetings were held by Accord Housing Association and WV Living for the future of the site in the aftermath.

And now a planning application has been submitted by WV Living to Wolverhampton Council to kick-start the revamp of the disused site.

It says: “The main objective of the scheme is to address the housing shortage in the area, especially with regard to the offer of new build homes for local residents.”

The proposed houses will be split into 147 for private buyers and 49 which will be socially rented.

Gardens, parking spaces and four access roads will be created at the heart of the development – with the roads connecting with Northwood Park Road.

And two football pitches on Northwood Park will be improved as part of the plan, with new goal posts, surface improvements and markings.

Northicote School closed following a merger with Pendeford School to form the North East Wolverhampton Academy.

It was classed as failing by Ofsted – becoming the first school to receive the rating – before undergoing a turnaround under the guidance of headteacher Sir Geoff Hampton, who was knighted for his role.

By Thomas Parkes

Source: Express and Star

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Brexit uncertainty constrains construction sector optimism, says new RICS survey

The uncertain outlook for the UK economy has led to reduced optimism, according to the results of the Q3 2019 RICS UK Construction and Infrastructure Market Survey, with anecdotal evidence from respondents suggesting that the housing market slowdown, coupled with unrelenting Brexit and political uncertainty, is weighing on investment decisions.

With the country heading towards a third general election in five years, the survey found that the mood in the construction sector is downbeat in the face of financial constraints, skills shortages, and slim margins.

The survey’s key findings include:

  • Workloads fall across most construction sectors in the UK as Brexit impacts investment;
  • Despite a lack of new business enquiries and rising labour costs, firms continue to hire;
  • 40% believe that Build to Rent will be a game-changer in increasing housing supply within ten years;
  • 53% of respondents seeing modern methods of construction feature more prominently in projects over recent years.

The survey results point to a notable deceleration in workloads, this quarter, with only a net balance of +10% reporting an increase in total workloads, down on average from +33% between 2013 and Q2 2016.

Breaking this down, workloads in the commercial and industrial sectors are at a near standstill, with infrastructure reporting the strongest rise, a net balance of +18% more respondents citing an increase rather than a decrease in infrastructure workloads (compared to +20% in Q2).

Activity in both private and public housing has eased with net balances of +14% and +11%, respectively. (Down from +26% and +22% in Q2).

As this seems to suggest it will be difficult to fulfil the current government’s house building ambition, the survey found that 40% believe that build-to-rent will be a game-changer in increasing housing supply within ten years, and 53% of respondents said that modern methods of construction have featured more prominently in the projects they have evaluated or undertaken in the past three years.

Jeffrey Matsu, RICS chief economist, said: “As the country heads to its third general election in five years, the mood music across the sector is relatively downbeat. However, while the pace of construction activity has moderated since the referendum, order books remain full as surveyors work through a backlog of previous projects.

“The outlook has the potential to materially improve, depending on the amount of fiscal spending that is authorised by government in the next spending review. Such pump priming has disproportionately supported construction and infrastructure works in the past.”

Hew Edgar, RICS head of government affairs, said: “The UK’s construction sector has shown resilience in its contribution to the economy over a difficult decade. We are, however, at a national level seeing issues such as financial constraints, skills shortages, stagnant productivity, variable quality, output lagging behind target, and slim margins. Whilst not the panacea to resolve all these problems, off-site manufacture and modern methods of construction represent an opportunity to address many of these issues.”

By Rob O’Connor

Source: Infrastructure Intelligence

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How could development finance help tackle the housing crisis?

The ongoing Brexit saga has had a ripple effect on most, if not all, UK industries. If we are to narrow in on the finance sector, we have seen the economic and political uncertainty act as an incentive for investors to explore alternative markets that are not just safer, but also offer stronger returns.

Playing perhaps the most important role here are the low interest rates, which have remained at 0.75% since August 2018.

As a result, particular avenues of investment such as development finance have grown in popularity; not only can this form of investment typically offer reliable returns, but it also makes investors’ money work harder without requiring them to commit to long-term investments. But the benefits naturally extend beyond the investors themselves. Indeed, they have the potential to support housebuilding efforts across the country and ultimately help address the ongoing housing crisis.

With the real estate market feeling the strain of Brexit uncertainty, development finance could be the stabilising force needed to buoy the sector.

In saying this, however, there is still a distinct lack of awareness amongst investors and consumers alike, in terms of the potential returns on offer from development finance. So how, then, can development finance help support the ambitions of investors, whilst also offering a boost to the wider UK property market?

What does development finance have to offer?

As the term suggests, property development finance describes a form of loan used for property development – whether this is refurbishing an existing house or building a new development from the ground up. In general, such loans are typically offered on a short-term basis and have a pre-defined exit strategy. One type of development finance in particular that is quickly growing in popularity is debt investment.

At FJP Investment, we’ve witnessed first-hand the increasing number of people moving to debt investment as a means of achieving regular, fixed returns. Indeed, 30% of the 950 UK investors we recently surveyed said that it was precisely these characteristics that they considered the main strength of debt investment.

To offer some more insight, loan notes (the instrument by which debt investments are agreed) have a predetermined date of maturity, meaning that investors don’t have to worry about a sophisticated exit strategy. Rather, the capital is provided to the developer upfront and the principal is repaid, with interest, by a set date. This means that investors can expect reliable returns and a clearly defined exit strategy.

What is the role of development finance in solving the housing crisis?
While Brexit has naturally dominated the headlines in recent years, the unresolved issue of the housing crisis remains festering beneath the surface. According to current forecasts, the UK needs to build approximately 300,000 new homes a year by the mid-2020’s if we hope to address the chronic undersupply of housing.

One of the most pervasive reasons why demand continues to outstrip supply is that developers – particularly SME developers – cannot access the finance required to drive housebuilding projects. According to a recent survey, 57% of small developers identified access to finance as the biggest obstacle they currently face. This comes in amidst a climate where many traditional lenders like banks and other high street lenders are reticent to loan money, with developers like these unable to get the funding they need to carry out these vital construction efforts.

This shortfall in investment for construction projects and property developments suggests that the market is yearning for alternative sources of finance – a gap that development finance is primed to fill. This financial instrument allows developers to access private finance, using it to construct more homes and scale their operations to the benefit of the wider public.

At the same time, development finance can be employed to utilise existing housing stock and make the most of homes that would otherwise sit empty.

Development finance is commonly used for refurbishment purposes in order to repair properties that sit in a derelict state – with the hopes of then putting them back onto the market to resell at profit. The incentive for investors is clear, but it also represents a way to make use of existing housing without having to rely solely on the completion of new-builds to meet targets.

Development finance shows real promise in terms of its potential to stabilise the real estate sector. It’s positive to note, therefore, that its popularity is growing steadily; according to the aforementioned FJP Investment research, 9% of UK investors currently hold some form of debt investment, with 20% considering doing so in the coming 12 months. Could this offer some much-needed relief to the property sector and ultimately work to support nationwide housebuilding efforts?

By Jamie Johnson

Source: The Armchair Trader

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Plans to build 600 new homes in East Renfrewshire given green light

MAJOR plans to deliver more than 600 homes for social rent have been backed by council chiefs.

East Renfrewshire Council’s cabinet members approved proposals which lay out how affordable housing will be provided across the area between 2020 and 2025.

The plan includes building 561 social rented houses and the purchase of 50 homes for social rent to support the council’s new build projects.

It is based on funding from the Scottish Government’s affordable housing supply programme and will see the authority work with social landlords and private developers.

The programme aims to deliver 50,000 affordable homes by 2021, with East Renfrewshire set to receive £6.3m of funding in 2019/20 and £6.7m in 2020/21.

Councillor Danny Devlin, housing and maintenance services convener, said: “The approval of our plan is good news for the people of East Renfrewshire.

“It highlights our ongoing commitment to the delivery of more homes for social rent, including our own new council homes, and ensuring that those with a range of needs will be provided with a safe and accessible home.

“Our new build housing programme has been a fantastic achievement with families, those facing homelessness, and tenants requiring adaptions moving into their brand new homes in Barrhead. I look forward to seeing this ambitious project continue.”

Since works began in 2018, 45 three-bed homes and one-bed flats, including fully adapted wheelchair flats, have been completed and are now home to families, elderly and those who faced homelessness.

The scheme, know as the strategic housing investment plan, will run beyond the government funding currently announced.

“However, Scottish Government guidance advises that councils should plan for funding to continue at the 2019 funding level,” a report to cabinet members revealed.

The council will prioritise developments with the “greatest certainty over timing and deliver-ability”.

Now the plans have been submitted, the government will set out the agreed projects to be funded in East Renfrewshire over the next three years.

Source: Barrhead News