No ‘silver bullet’ to fix housing crisis
The Housing Minister, Gavin Barwell MP, told a recent conference for the National Association of Estate Agents that the crucial shortage of new housing in the UK could not be solved by a single ‘silver bullet’ solution, but rather by a number of ‘small adjustments’.
He went through the recent recommendations of the government’s White Paper on the housing shortage, ‘Fixing our broken housing market’. This included the need for streamlining planning approvals by local authorities by reducing the timing of approvals from three to two years and the government’s ambition to stop developers from retaining land earmarked for development but left unused.
He outlined at the close that: “I expect developers to up their game and if they don’t, I shall give extra powers…to ensure that happens.”
Low interest rates reduce repossessions by 25% to 35-year low
The Council of Mortgage Lenders (CML), the main trade body representing mortgage lenders across the country, has reported that the number of properties taken into repossession last year has fallen to its lowest level since 1982.
At 7,700 repossessions, the 2016 figure is 25% below the total figure for 2015, as the historically low interest rates have alleviated pressure on many mortgage holders.
There were 94,100 mortgages with arrears of 2.5% or more of the outstanding balance at the end of 2016, which compares favourably with the total of 101,700 a year earlier.
Director General of the CML Paul Smee commented on the data: “It is encouraging to see another improvement in arrears and possessions during a year in which borrowers were clearly helped by the downward trend in mortgage rates. But customers do need to be ready for a time when the outlook may not be so benign, with pressure on real incomes increasing and as interest rates begin to move upwards again.”
Latest official data releases
The Royal Institution for Chartered Surveyors (RICS) recently announced that they recorded a marginal increase in new home-buyer enquiries in December. The number of actual home sales in the UK increased by 0.2% between November and December 2016, but compared with the figures for December 2015, there were 8.5% fewer residential sales.
Focusing on supply, RICS reported a 10th consecutive month with no improvement in national listings, clearly highlighting that low stock levels are weighing heavily on buyer activity.
From a construction output perspective, the Office for National Statistics (ONS) recently outlined that 36.5% more houses were built between January 2014 and November 2016, than there were between January 2011 and November 2013.
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Please note: Our monthly property market review is intended to provide background to recent developments in the residential property market as well as to give an indication of how some key issues could impact in the future. We are not responsible or authorised to provide advice on investment decisions concerning property, only for the provision of mortgage advice.