Property Briefing- A daily roundup of key property news
Posted by The Oracle Group on 13th June 2019 -
INDUSTRY
Three-fifths of help to buy users did not need scheme
More than half of people using the government's help-to-buy loan scheme did not actually require the assistance, as they were already in a position to have purchased a home without support from the state, the National Audit Office has revealed. Furthermore, 5% of the people who used the scheme last year had household incomes of more than £100,000. Since the launch of the policy, 10% of buyers had household incomes of more than £80,000, or more than £90,000 in London. Whitehall’s spending watchdog said the scheme, under which the government has lent more than £11bn to 211,000 homebuyers in five years, had exposed the government to "significant market risk" if property values fell. However, the NAO conceded that the scheme had helped to boost housing supply, as the number of new-build properties sold each year in England has increased from 61,357 to 104,245 since the scheme began and almost 40% of sales of new-build properties were supported by Help to Buy. Gareth Davies, head of the NAO, said: "Until we can observe its longer-term effects on the property market and whether the department has recovered its substantial investment, we cannot say whether the scheme has delivered value for money."
Brokenshire: expand leasehold inquiry
Housing Secretary James Brokenshire has called on the Competitions and Markets Authority to widen its investigation into the mis-selling of leasehold homes. The competition watchdog formally launched an investigation into the scandal this week after coming under pressure from ministers. However, Mr Brokenshire said that a wider investigation was needed to ensure that freeholders were more transparent, making sure that they inform leaseholders when their freehold was sold on. He added that the CMA should "follow" the lead of the Ministry of Housing, Communities and Local Government, which secured an industry pledge from housebuilders - including Taylor Wimpey and Barratt Developments - which called on freeholders to release the same information.
Boris Johnson’s tax proposal to benefit landlords
Tory Leadership hopeful Boris Johnson’s pledge to raise the 40% tax threshold to £80,000 would be a boon to landlords, according to broadcaster and financial commentator Paul Lewis. “Boris Johnson’s tax plan will benefit landlords twice as much as anyone else. People who make a living through rents, dividends and pensions do not pay NICs, which will result in them gaining £6,000, over the salaried and self-employed who will make £3,000 a year,” explains Mr Lewis. “For landlords who earn £50,000 a year this proposal is good news, but for the landlords who generate over £80,000 a year through renters, this is great news.”
Londoners paying £43k premium for homes close to Underground
Homebuyers in London are prepared to pay an average of £43,000 more for properties within a five-minute walk of a Tube or railway station, research has revealed. An analysis by Nationwide compared prices of homes within 500 metres of a station — equivalent to a five-minute brisk walk — with those of a similar property nearly a mile away. On average buyers were prepared to pay 9.4% more for easy access to public transport, equivalent to a £42,900 premium. In contrast, Mancunians were only prepared to pay 7.8 % more to be close to a Metrolink or railway station, while Glaswegians would stump up only an extra 3.8% to be close to a rail or subway station.
Homes & Property
HOUSING
MPs call for revision of “affordable housing” definition
MPs have called upon the government to redefine the term “affordable housing”, shifting its meaning from referring to market house prices to average earnings. Conservative MP for Newton Abbot Anne Marie Morris told the Commons the current affordability targets were “not strong enough”. “On affordability, I do not think that any hon. Member present disagrees that 80% of the market [value] frankly does not represent anything affordable,” she continued. Labour MP for Mitcham and Morden Siobhain McDonagh also highlighted housing issues during the debate, adding “since 2010, housebuilding has fallen to its lowest level since the 1920s. Rough sleeping has risen every year, rents have shot up faster than incomes, there are almost 200,000 fewer homeowners and new affordable housebuilding is at a 24-year low.”
Removing Brexit uncertainty will not solve housing crisis
The Building Societies Association has warned that removing Brexit uncertainty will not resolve the current housing market issues, after a survey found that 34% of respondents, who believe now is not a good time to buy, said they would change their mind after a correction in house prices. In contrast, 27% said they would change their mind if Britain reached an agreement with the EU, and 11% said a “no deal” scenario would make them more positive.
Over 1,000 empty Scottish homes brought back last year
A record 1,128 privately-owned empty homes in Scotland were brought back into use with help from local councils last year, according to the Scottish Empty Homes Partnership. The body said that 2018-2019 was the best year yet for the group which supports a network of empty homes officers working in 20 local authorities across Scotland. It brings the total number of homes brought back into use since the SEHP was set up in 2010 to 4,340, which is roughly equivalent to a town the size of Peebles. “Empty properties are a wasted asset at a time of a housing shortage and our goal is to see staff with time to dedicate to this issue working in every council in Scotland over the next three years,” said Shaheena Din, SEHP National Manager.Scottish Housing News
RENTAL
New tenant fee shift could push up rents
The government’s new tenancy fees ban could lead to landlords pushing up rents in a bid to mitigate the increased costs they face instead, according to RICS. “The aim of this tenant fee shift is to create a better market with more transparency for the tenant at the outset, with fees now hopefully seen as business expenses either at the landlord or agent level. RICS welcomes any attempt to improve standards and consumer outcomes, however, it must be done in a proportionate way,” said Tamara Hooper, RICS policy manager. “We don’t want this new fee ban to result in more landlords exiting the market as this could result in a further shortage of available properties to rent. But at the same time, our research suggests that prior to the tenant fees ban, rents were expected to grow by an average of 3% per annum over the next five years.”
Newcastle landlord licensing scheme watered down
A rented housing crackdown in Newcastle has been scaled back after complaints from private landlords. Newcastle City Council's proposed licensing scheme would have required landlords of 18,500 properties to pay up to £750 or face a heavy penalty, but opponents argued it unfairly targeted private landlords and covered a "disproportionately large" area. The revised scheme includes 5,500 fewer properties than planned. The local authority hopes stricter oversight of irresponsible landlords in problem areas will tackle poor housing standards and reduce anti-social behaviour.BBC News
RETAIL
Arcadia avoids collapse as landlords back rescue plan
Sir Philip Green’s fashion empire lives to fight another day after it secured backing for its restructuring plan. Arcadia managed to convince more than three-quarters of its unsecured creditors - made up of landlords, suppliers, and the Pensions Regulator - to vote for a series of company voluntary arrangements (CVAs), staving off administration. However, the plan involves the closure of 50 stores and 1,000 job losses. Landlords remain dissatisfied while retail experts say Arcadia needs a thorough overhaul if it is to survive.
Lidl to open 40 new stores
Discount supermarket chain Lidl has announced plans to open 40 new stores in the south-east of England, including its first ever store in central London. The £500m investment will take place over five years and will include a new UK head office in south-west London. New shop locations will include Alperton, East Acton, Hackbridge and Watford.
FIRMS
L&G reveals affordable homes progress
Having gained regulatory approval six months ago to act as a social housing provider, Legal & General has secured the first four sites for its new affordable homes business. Deals have been agreed to deliver an initial 278 homes in London, Cornwall, Dunstable in Bedfordshire and Shrivenham, Oxfordshire. The company has committed about £55m through the first four deals, but has established a £500m pipeline.
INFRASTRUCTURE
328 buildings still have Grenfell cladding
Ahead of the second anniversary of the Grenfell Tower tragedy, official figures have been released showing that 328 buildings across the country are still clad with the highly-inflammable ACM plates that were attached to the London housing block. The coating was banned by the Government after the disaster. Local authorities with more than 20 affected buildings are Greenwich and Tower Hamlets in the capital and Salford in Greater Manchester. Those with between 11 and 20 are Westminster, Wandsworth, Brent and Newham, all London, and Manchester. Liverpool, Leeds, Lambeth, Camden, Islington, and Haringey all have between six and 10 of the ACM-clad buildings.
INTERNATIONAL
US homeowners rush to refinance on lower rates
Homeowners in the US are refinancing their mortgages en masse, taking advantage of a reduction in borrowing costs amid trade tensions and growth concerns that have fuelled a bond rally.
OTHER
Queen’s former residence goes on sale in Malta
A mansion in the Maltese city of Valletta that the Queen and Duke of Edinburgh once called home has been put up for sale for over £5m. With six bedrooms, three bathrooms, a grand "sala nobile" living room - not to mention "various guest/servant quarters" - the property has "great historical value", according to estate agents Homes of Quality.
Woman wins housing benefit shortfall homelessness case
The Supreme Court has ruled that it was unlawful for Birmingham City Council to treat a woman and her and her children as intentionally homeless after she was forced out of her rented home because of a shortfall in housing benefit. The woman, known only as Ms Samuels, was told to use her non-housing benefits to plug the shortfall, and the local authority also decided she had intentionally become homeless.
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