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2,000 homes planned as Shropshire Council to set up its own house building company

Shropshire Council is to enter the housing business by setting up a company to build more than 2,000 homes across the county in the next ten years.

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Would Small Sites and Small Builders Deliver New Homes Faster?

According to the Federation of Master Builders (FMB), the best way to deliver needed housing more quickly is to enable more small builders to rejoin the market and emphasise the potential of small build sites.

FMB Chief Executive Brian Berry responded to the Prime Minister’s speech on housebuilding in Britain by saying that small build sites are generally completed more quickly and smaller builders, who tend to be more concerned about short-term financing, have a strong incentive to build and sell quickly. If smaller developments receive more opportunities, the result could be a more diverse market, increased capacity, and faster delivery.

Mr. Berry said that the government has evidently recognised this fact and is putting forth national planning policy changes that will make it easier for more small build sites to be used. The FMB is especially appreciative of the move to ensure that smaller sites account for at least 20% of the sites earmarked for housing in local authority plans.

He pointed out that the pace of housebuilding cannot be dictated. Builders have little incentive to simply sit on land. Smaller builders, in particular, have a good reason to build and then sell as quickly as possible, so they can recoup their investment and move on. There are valid reasons why developments can be slowed down or stalled, such as financing problems and downturns in the market. Building a home is an important investment and builders who can’t be sure of selling won’t stay in business for long.

Mr. Berry concluded that developers with a poor delivery track record and those who apply for planning permission purely on a speculative basis deserve push back, but the UK Government needs to prevent rhetoric from dominating reality. It must recognise that any attempt to compel building at a commercially illogical speed could end up slowing down the rate of delivery. This outcome could discourage the newer and smaller builders needed to diversify the market.

Source: CRL

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£1bn loan fund to support housebuilders

Barclays has partnered with the UK government to provide £1bn of loan finance to support small- and medium-sized housing developers.

Support ranging from £5m to £100m will be made available to developers, overseen by Homes England.

The Housing Delivery Fund will support the development of new homes, including social housing, retirement living and apartments for rent, as well as encouraging greater innovation, such as through the use of brownfield land and urban regeneration projects.

It aims to help open up the housing market; currently almost two-thirds of new homes are built by just ten companies.

Housing secretary James Brokenshire said: “My priority as Housing Secretary is to get Britain building the homes our country needs.  This new fund – partnering Homes England with Barclays – is a further important step by giving smaller builders access to the finance they need to get housing developments off the ground.

“This is a fantastic opportunity to not only get more homes built but also promote new and innovative approaches to construction and design that exist across the housing market.”

John McFarlane, Barclays’ chairman, added: “There is a vital need to build more good quality homes across the country.  This £1bn fund is about helping to do exactly that by showing firms in the business of house building that the right finance is available for projects that help meet this urgent need.

“We are very pleased to be working with government to get the country building more homes, more quickly.”

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Give housing developers ‘shot in the arm’ over council tax, ministers told

Housing developers should be given an “enormous shot in the arm” and charged council tax and business rates as soon as planning permission is granted, a Tory former minister has urged.

John Penrose told MPs “the meter should start running” immediately after developers are granted permission in order to ramp up house building.

His comments came after shadow housing secretary John Healey described the Government’s housing policy as a “bit like Groundhog Day” in that there had been “eight years of failure on all fronts”.

Statistics from the National House Building Council (NHBC) revealed last month the number of new houses registered to be built in the first three months of the year had fallen by 14% – the worst percentage fall in one three month period since 2012.

Mr Penrose, speaking in a Commons debate on house building, said: “To get developers building faster, councils should be able to charge business rates and council taxes starting from the day that planning permission is granted rather than when developers finally get round to start building.

“We could give big developers a few months’ grace till they get their crews on site but then the meter should start running so they would have a huge incentive to build and sell promptly rather than taking their time.”

He added: “Equally and importantly the same forces would apply to the hedge funds that own derelict brownfield land in town and city centres too.

“These sites already have old, unused permission so the clock would start ticking immediately. Just think of the enormous shot in the arm, the jolt of adrenaline we’d give to urban regeneration projects everywhere right across the country if the owners couldn’t sit on them for years any more waiting for something to turn up.”

MP portraits
John Penrose MP urged the Government to take action

He said: “After eight years of failure on all fronts, how is the answer more of the same? When since 2010 on home ownership we’ve seen a million fewer under-45s now owning their own home and the lowest level of home ownership for 30 years.

“How can the answer be more of the same on homeless when it’s risen every year since 2010 and we’ve now got 120,000 children growing up with no home. And how can the answer be more of the same when private renters have faced soaring rents, way ahead of income.”

Communities Secretary James Brokenshire said housing was the Government’s “top domestic priority”, he said: “It is totally unacceptable that we still have people out on our streets and we must turn this situation around,” adding the pilot projects for Greater Manchester, Liverpool and West Midlands would be an important step.

He added: “Everyone deserves not just a roof over their heads but a safe, secure, affordable place to call home. It is the foundation on which everything is built, it is the Government’s top domestic priority.”

Laura Smith told MPs that she did not own her own home (PA)
Laura Smith told MPs that she did not own her own home (PA)

She said: “I wonder how many of us here have had to struggle to scrape together agency fees, find a deposit to put down on a rental property, find the first month’s rent while still paying all the other basic bills and essentials for their family and all the time whilst doing this dealing with the added pressure of trying to think about how to ever come out of that cycle of renting rather than owning your own property.

“Countless times I myself as a non-homeowner have been advised by well-meaning people that renting is throwing money away and I really ought to be saving for a deposit on my own property.

“Well I think I can speak for most privately renting and say of course that is the preferred route anyone would want but the likelihood of this happening is being made increasingly difficult due to the cost of living compared to income.

“People who rent are faced with significant upfront costs and often very short tenures and they have to pay more fees and find large deposits every single time they move.”

Source: Shropshire Star

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Build-to-rent: the saviour of UK housing?

Predicting a shortfall of 1.8million rental homes by 2025, the Royal Institute of Chartered Surveyors (RICS), announced last year that the UK was on the verge of a rental crisis. The reasons they gave for their dire – but not unexpected – prediction was inevitably the obvious shortage of housing, but they were also quite clear that a major factor was the increased tax burden on landlords and the new Stamp Duty tax on second homes both of which are discouraging further investment in the private rented sector.

The solution to this crisis, RICS insisted, had to be ‘a much bolder and long-term approach.’  Their answer it, appears is Build-to-rent, an approach that has worked on the continent for years (at least France and Germany). In Britain it certainly appears set to revolutionising the industry. We are seeing a steady growth of institutional investors building purpose built facilities for students and we are seeing property developers who would traditionally renovate existing buildings into rental properties turn their attention to new build.

Creating purpose-built rental homes isn’t a new idea for the UK though; the government’s Build-to-rent Fund was created in 2012 with the intention of increasing the number of high quality homes for market rent within the private sector.

The Olympic East Village in Stratford is a great example. Replaced with the Home Building Fund and managed by the Home and Communities Agency, the original Build-to-rent initiative seems to have gone from strength to strength. Recent figures from the Agency point to the fact that around 80,855 homes built specifically for rent under the scheme have been completed or are currently in development.

London leads the charge with Build-to-rent homes

London, with its over-inflated rental market, has been the beneficiary of a number of high-profile Build-to-rent schemes. The largest to date is in Wembley Park in Brent (one of London’s poorest boroughs). But others are planned; a major scheme being in the former Bourbon Biscuits factory in Bermondsey where 11 blocks of homes are planned – some as high as 25 storeys.

There is also a great deal of thought going into tenant needs in these areas with many of the units being let with a 25% discount against market value and are being offered with options for longer term 3 year tenancies with all bills included. Such approaches are often a result of partnership working with the local authority who will help and support the right type developments for their area.

What about the smaller investors?

This type of approach isn’t just reserved for large scale developers and institutional investors. Many smaller investors all around the country have been taking advantage of ‘Permitted development rights’ by converting to commercial buildings into small residential holdings, often of 6 – 10 flats or less. The next logical step for these investors is new build and the appetite is building to acquire small plots of land in order to do small build to let developments.

There will be more Build-to-rent schemes, throughout the UK, thanks to a proposed change in planning rules which will give local authorities the right to offer sites for similar serviced Build to Rent developments. Many within the property industry believe that can only be a good thing by improving standards in the sector as a whole and represents a great opportunity for Landlords and Investors in the private rented sector.

Source: Simple Landlords Insurance

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Labour pledge to build one million affordable homes to end housing ‘crisis’

The rise in homelessness shows there is something “deeply wrong with our country”, Jeremy Corbyn said as he set out Labour plans to build a million “genuinely affordable” properties over 10 years.

The Labour leader promised a “new era of social housing” and a return to a system where a decent home is “not a privilege for the few”.

The plan involves building 100,000 affordable homes a year – with Labour promising to tear up Conservative rules which allow homes worth up to £450,000 to be classed as affordable.

Launching a consultation on Labour’s plans at an event in London, Mr Corbyn said it was a “time of crisis for our housing system”.

“A million on housing waiting lists, tens of thousands of children in temporary accommodation without a home to call their own, homelessness up by 50% since 2010, the indignity of sleeping on our streets at night or sofa-surfing among friends,” he said.

There were “sky high” rents and house prices, and “luxury flats proliferating across our big cities while social housing is starved of investment”.

He said that housing had “become a means of speculation for the wealthy few”.

On the plight of homeless people, he said: “There is something that I think is deeply wrong with our country that we tolerate the idea that several thousand of our citizens should sleep rough on our streets every night, or if a church is open they will sleep on church pews.

“We can, must and will do better than that in the future.”

He promised a Labour government would “immediately purchase enough places so that rough sleeping can end as quickly as we can possibly do it”, while also building more housing and move-on accommodation for people leaving shelters.

As part of the reforms to the housing market, Labour would create a new English Land Sovereign Trust – backed by compulsory purchase powers – to make land available for building more cheaply.

Under the scheme, landowners would lose a slice of the extra value created by the granting of planning permission, which can see the price of agricultural land rocket 100-fold from £21,000 to £2.1 million a hectare outside London.

Labour always make big promises and always fail to deliver them

Housing Minister Dominic Raab

In response to the Grenfell Tower tragedy, Labour would introduce new decent homes targets for social landlords, including fire safety for the first time. And a new independent national organisation and a Commissioner would be created to represent the views of tenants.

Local authorities in every part of England would face a “duty to deliver affordable homes”.

The policies would be driven through by a new Department for Housing and monitored by an independent watchdog.

Labour accused Conservatives of making “bogus” claims on affordable house-building on their watch, by stretching the definition to include properties for sale at up to £450,000 or rented at 80% of market value – more than £1,500 a month in some areas.

A new definition would be linked to local incomes to ensure homes are genuinely affordable. And Labour will suspend the “right to buy” scheme as part of a package of measures to stop the loss of existing social rented homes.

Housing Minister Dominic Raab dismissed the plans, saying: “Labour always make big promises and always fail to deliver them.”

He claimed that Labour would “kick away the housing ladder from everyone living in council houses by taking away their Right to Buy, just as Labour did in Wales”.


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UK Local Government Association calls for new build fibre to the premises kitemark

The UK’s Local Government Association (LGA) has called for housing developers to adopt council proposals for a fibre to the premises (FTTP) kitemark for new build homes to make it clear to prospective buyers what they can from the internet connection in their new property.

Developers currently only have an obligation to connect water and electricity before a property is sold. And, said the LGA, while the government’s new draft of the National Planning Policy Framework aims to help councils encourage developers to provide FTTP connections to existing and new developments, it does not give them powers to hold developers to account. The association believes that introducing a new FTTP kitemark is a common-sense proposal that will make it clear to the public whether or not their new home will have a fully future-proofed internet connection.

Cllr Mark Hawthorne, chairman of the LGA’s people and places board, said: ‘The standard of digital connectivity we provide to our new build homes should reflect our national ambition to roll out world-class digital infrastructure across the country. Residents will no longer tolerate digital connectivity taking a backseat in developers’ plans.

‘We call on the government, homebuilders and the broadband industry to work with us and develop the details of this proposal and give homebuyers the confidence to invest in a new home, knowing they won’t be stuck in the digital slow lane.’

Mark Collins, director strategy and policy at CityFibre has responded to the announcement. He said: ‘Access to high-quality internet access is of enormous importance to UK residents, with around one in three admitting that it has become as important to them as electricity, gas and water, and a quarter going as far as saying that they couldn’t function without it.

‘We also know that having access to next generation internet access delivered over full fibre infrastructure can add significant value to property – a figure that’s been calculated to be worth at least £7 billion nationally over the next 15 years.

‘Full fibre is the only infrastructure capable of delivering the reliable gigabit speed services and futureproofed capacity the UK needs. We fully support the LGA’s call for the launch of a FTTP kitemark, which will give full fibre – the gold standard in internet connectivity – the status and recognition it deserves.

‘Consumers have been misled for decades by advertising practices which allow copper-based broadband products to be advertised as ‘fibre’. The introduction of a kitemark, however, will help consumers know what they are paying for and what standard they should expect.

‘By improving awareness and increasing demand for that gold standard, consumers, government, local authorities and industry can collaboratively drive the roll-out of full fibre across the UK, helping it to catch up with the rest of the world.

‘Ultimately, this isn’t just about residential broadband speeds, this is about driving real and meaningful economic growth in all parts of the country for the long term. The FTTH Council in the USA, has calculated that providing full fibre to just half of all premises in any given location could result in a 1.1 per cent rise in annual GDP. This figure applied to our own research based on 100 UK town and city economies, suggests an economic impact in excess of £120 billion. This is a figure that cannot be ignored.’

Fibre has been high on the agenda for the UK government, with the 2018 Spring statement revealing the first wave of allocated funding under its Local Full Fibre Network (LFFN) scheme, which will provide more than £95 million for 13 areas across the UK (see UK government allocates £95 million for 13 local full-fibre broadband projects in first wave of funding).

Source: Fibre Systems