Remote Working Sees Demand And Rent Fall In The Capital

The latest research by estate agent, Keller Williams UK, has found that due to the sustained levels of remote working, London now leads the uplift in rental affordability. The firm analysed rental market data looking at the average rental cost and how it has changed between 2020 and 2019 and found that across England, Covid has caused a marginal reduction in rents, with the average cost per month falling by -0.8%. A decline that will be welcomed by tenants who have seen consistent increases in rental prices in previous years, and more recently, may have seen their ability to afford this rent decline due to the pandemic. Read more on the Property Reporter website.

https://www.propertyreporter.co.uk/landlords/remote-working-sees-demand-and-rent-fall-in-the-capital.html 

Housing Affordability Gap Continues To Widen

The results of newly conducted research from Stone Real Estate, have revealed that the gender affordability gap for aspiring homeowners continues to open up, with the male affordability ratio currently at 12.2 across the UK, compared to 18.1 for female homebuyers. The research looked at the current level of affordability for male and female home buyers based on an affordability ratio using house price deposit costs and salary and the gap between the two. Salary data for the area in which people live rather than work was used to compare like for like when it comes to house prices and purchasing power. Read more on the Property Reporter website.

https://www.propertyreporter.co.uk/finance/ousing-affordability-gap-continues-to-widen-between-male-and-female-buyers.html

Shift To ‘Affordable Housing’ Happening At The Expense Of Social Rents

A combination of present policies and the use of affordability assessments has the potential to erode access to social housing for those seen as a financial risk, a new report says. Evidence put to CaCHE – the UK Collaborative Centre for Housing Evidence, comprising 11 universities and three non-academic institutions – highlights the shift to ‘affordable’ housing in England is at the expense of provision of housing at social rents, accessible to those on the lowest incomes. The research outlines the need to critically question the affordability of the affordable housing sector, which CaCHE says is often taken for granted. Read more on 24housing.

https://www.24housing.co.uk/news/shift-to-affordable-housing-happening-at-the-expense-of-social-rents/

As Salaries Grow More Than Property Values, Cities Get More Affordable

Stagnant growth in house prices paired with increasing wages is making some of the most expensive cities in the U.K more affordable, according to a report released by Zoopla. Average annual wage growth across the nation reached 3.7% in June, which outstripped house price growth in 12 of the 20 cities the online real estate portal analyzed. The three highest-value markets in the U.K.—London, Cambridge and Oxford—all saw house price growth below the level of wage growth. Read more on the Mansion Global website.

https://www.mansionglobal.com/articles/as-salaries-grow-more-than-property-values-the-priciest-u-k-cities-get-more-affordable-206624

Housing Infrastructure Fund Disadvantages Northern Areas

The government’s Housing Infrastructure Fund (HIF) is benefiting Southern areas at the expense of the North of England. As a result of a new formula applied to the funding that channels money more towards areas of ‘high affordability’, Northern local authorities have access to a far smaller pot when compared with Southern authorities. Inside Housing has collated information from all the authorities that have applied for money from the fund, which aims to build infrastructure to unlock the delivery of new homes, and applied the MHCLG formula for geographical targeting. This formula is intended to ensure that government funds go to the least affordable areas of the country. Read more on Inside Housing.

https://www.insidehousing.co.uk/news/housing-infrastructure-fund-disadvantages-northern-areas-62879

Cost Of Housing Has Forced 41% Of Employees To Change Jobs

New research from Strutt & Parker has identified that the cost of housing is now one of the main considerations when people decide whether or not to accept a job, with many being forced to live further and further away from their place of work. Of their survey of 2,000 full-time employees, 85% of respondents cited the cost of housing as important in their decision, impacting job mobility and satisfaction. Add in the 41% who have left one or more jobs because of local housing costs, and it’s clear that affordability is a significant issue for those wishing to live close to their work. Read more on the Showhouse website.

https://www.showhouse.co.uk/news/cost-of-housing-has-forced-41-of-employees-to-change-jobs/

Full-Time Workers Pay 7.8 Times Earnings On Buying A Home

Latest ONS figures show full-time earners paying some 7.8 times their annual workplace-based earnings on buying a home in England and Wales in 2018. The stats have housing affordability in England and Wales staying at similar levels in 2018, following five years of decreasing affordability.At the local level, London boroughs had the widest range of estimated housing affordability – more than three times the range of any other region. Read more on 24housing.

https://www.24housing.co.uk/news/full-time-earners-paying-7-8-times-their-earnings-on-buying-a-home/

LGA: Two-Decade Social Home Build Could Have Saved Renters Billions

Building 100,000 government-funded social rent homes a year over the past two decades would have cut ‘billions’ from the housing benefit bill, new analysis reveals. The Local Government Association (LGA) said its new research ‘provides evidence’ for why the government should use the Spending Review to work with councils to ensure that the genuine renaissance in council housebuilding needed to ‘increase housing supply’, ‘boost affordability’ and ‘reduce homelessness’, is a success. According to reports, the LGA have also said that a boost in social housing over the last twenty years would have provided higher disposable income for tenants and generated ‘significant economic returns’. Read more on the LGA website.

https://www.local.gov.uk/about/news/building-social-housing-over-20-years-could-have-saved-renters-ps18-billion

Affordability Is The Most Important Issue For Tenants In The UK, New Poll Suggests

Affordability is the most important factor for tenants in the UK looking for a home to rent, according to a new survey. The cost of renting a home was the top factor for over 40% of respondents to the research carried out by Intus Lettings. Only 8% prioritised amenities, including restaurants and public transport links as a driving force behind their decision on a tenancy, it also found. An outdoor space is also important with 46% saying they would like a garden, terrace or balcony while 40% would be put off by a property without a parking space, and 24% said they would be deterred by dated interiors. Read more on the Property Wire website.

https://www.propertywire.com/news/uk/affordability-is-the-most-important-issue-for-tenants-in-the-ujk-new-poll-suggests/

UK House Prices Grow Fastest In North Of England And Midlands

House prices have grown fastest since the UK voted to leave the EU in cities in the Midlands, the north of England, Wales and Scotland, according to the property website Zoopla. Birmingham (up 16%), Manchester and Leicester (both up 15%) have seen the fastest growth since the June 2016 referendum, followed by Edinburgh and Nottingham (14%), Leeds and Cardiff (12%), and Liverpool and Sheffield (11%). Zoopla said economic and political uncertainty caused by the Brexit vote was more acutely felt in southern English cities, while lack of affordability was also a major factor. Read more on the Guardian website.

https://www.theguardian.com/money/2019/jan/30/uk-house-prices-grow-fastest-in-north-of-england-and-midlands

10,000 Affordable Homes Potentially Lost Through Office Conversions

The Local Government Association says permitted development rules allowing offices to be converted into housing without planning permission are exacerbating the nation’s housing affordability crisis and should be scrapped. Latest figures show that since 2015, a total of 42,130 housing units in England have been converted from offices to flats without having to go through the planning system. As a result, they included no affordable housing or supporting investment in infrastructure such as roads, schools and health services. While this amounts to approximately 7 per cent of new homes nationally, in some parts of the country it represents a much higher proportion of all new housing. Read more on the LGA website.

https://www.local.gov.uk/about/news/10000-affordable-homes-potentially-lost-through-office-conversions

Mortgage Lenders Relax Affordability Criteria In The Hunt For New Business

Some of Britain’s major banks and building societies are loosening their mortgage affordability restrictions in a bid to boost lending.  Many would-be homeowners have struggled to obtain loans because of strict affordability assessments introduced in April 2014. In some cases applicants have been penalised for having adult children living at home, even if they are financially independent from their parents. However, data published by trade body UK Finance showed that the number of new house buyers had been stagnant, meaning lenders are being forced to open up if they are to attract customers. Read more on the Daily Telegraph website.

https://www.telegraph.co.uk/personal-banking/mortgages/mortgage-lenders-relax-affordability-criteria-hunt-new-business/

Third Of British Homeowners Priced Out Of Their Own Property

More than one in three UK homeowners wouldn’t be able to afford their home if it were listed on the property market at today’s value. The Halifax House Price Index has released figures showing prices in the last three months were 2.2 per cent higher than in the same period last year, with the average property now coming in at £220,962. The figures support separate findings that suggest that a significant proportion of those who have owned their own home even for a few years would already be priced out of the market if they were to attempt the purchase again, despite historically low mortgage interest rates. Read more on the Independent website.

https://www.independent.co.uk/money/spend-save/uk-homeowners-property-market-housing-affordable-buy-a8344326.html

Help For 'Mortgage Prisoners' Sought By FCA

Thousands of "mortgage prisoners" who are paying high borrowing rates but are unable to switch to better deals should be given more help, the UK's financial regulator has said. These homeowners took out mortgages before new, stricter rules on affordability were brought in. The Financial Conduct Authority (FCA) also said about 30% of borrowers failed to find the cheapest mortgage deal. However, it said competition in the market worked well for many people. The FCA's comments came in an interim report into the mortgage market. Read more on the BBC website.

http://www.bbc.co.uk/news/business-44001514

Mismatch Between Wages And House Prices Increases

Airline pilots,flight engineers, electronics engineers, rubber process operatives, energy plant operatives, and merchandisers and window dressers all have seen housing affordability improve over the past five years. These account for just 2 per cent of occupations. The figures, compiled by mortgage broker Private Finance and based on information from the Office for National Statistics, highlight the growing mismatch between wage rises and house price increases. While average earnings grew by just 9 per cent from 2011 to 2016, the average house price soared by 26.7 per cent, meaning the number of years’ earnings required to afford the average home increased from eight to 9.2. Read more on the FT Adviser.

Average House Price At 7.6 Times Annual Salary

Rising house prices now stand at an average 7.6 times the average annual salary, more than double the figure for 20 years ago, according to official figures. The new figures for housing affordability in England and Wales between 1997 and 2016 have been issued by the Office for National Statistics. They said the median price paid for a home leapt by 259% over this period, while median individual annual earnings could only manage a 68% rise. The ONS said housing affordability “has worsened in all local authority districts”. In 1997, house prices were on average about 3.6 times workers’ annual gross full-time earnings. Read more on the Guardian website.

New Home-Buyers Could Need £23,000 To Get Onto Property Ladder

People aspiring to get on the property ladder across England and Wales could find themselves needing more than £23,000 for a deposit and moving costs, according to Office for National Statistics (ONS) data. The ONS has placed a new affordability calculator on its website, which allows would-be home-buyers to see what level of household income they might expect to need to get a mortgage on an "entry-level" property in their neighbourhood. The ONS said that with the average cost of an entry-level home in England and Wales being £140,000, prospective buyers could require £300 stamp duty, an estimated £2,000 for legal and moving costs and £21,000 for a 15% deposit, coming to £23,300 in total. Read more on the Belfast Telegraph website.

Housing In England Report

A new report from the National Audit Office (NAO) comments on the government's ambition of delivering one million new homes by 2020. Surprisingly, it concludes that it does not require a substantial increase in current levels of housebuilding. The report concludes that:

·         The need for housing in England has in recent years grown faster than its supply.

·         To keep up, housebuilding needs to increase across the country.

·         Housing has become more affordable for existing homeowners.

·         In contrast, social rents have risen faster than wages.

·         Housing is less affordable for a first-time buyer now than it was in the 1990s.

·         Homelessness has also increased over the past five years.

Download the report form the NAO website.

71% Unsure Of Right To Buy Purchase Price

Affordability remains a key issue in moderating demand for Right to Buy, says a new report. 71% of respondents said they did not know what the purchase price of their property would be, while 21% said they had a rough idea. The report, commissioned by the National Housing Federation and five participating housing associations, was conducted by the Centre for Regional Economic and Social Research at Sheffield Hallam University during 2016. It found regional variance in levels of tenant demand and property valuations, reflecting the different local markets in which the pilot was operating. Download the report from the Housingnet website.

6% Of Households Make Application For Right To Buy

Affordability remains a key issue in moderating demand for Right to Buy, says a new report. 71% of respondents said they did not know what the purchase price of their property would be, while 21% said they had a rough idea. The report found there was a regional variance in levels of tenant demand and property valuations, reflecting the different local markets in which the pilot was operating. 27% of respondents living in properties eligible for VRTB overall expressed interest, rising to around a third of tenants in two of the pilots However, at the time of the most recent analysis (November 2016), just 6% of households in eligible properties had made an application. Read more on 24housing.