Tax Break Extension Revives Housing Market Boom

The unexpected extension of a tax break for property purchases in Rishi Sunak’s budget last month has revived a fading boom in housing market activity, a survey shows. The Royal Institution of Chartered Surveyors said its monthly gauge of house prices - based on the reports of surveyors across the country - rose in March to +59 from +52 in February. Other measures of Britain’s housing market have suggested that activity in the housing market was fading before the planned expiry of a temporary cut to property purchase tax, known as stamp duty, at the end of March. Read more on the Reuters website.

https://www.reuters.com/article/uk-britain-economy-houseprices/tax-break-extension-revives-uk-housing-market-boom-rics-idUSKBN2BU3K4

Labour and Banks Plan House-Building Funds

Labour is working with the five major high-street banks on proposals to kick-start a house-building boom with the help of government loan guarantees for builders. Chris Leslie, the Shadow Chief Secretary to the Treasury, and Housing spokesperson Emma Reynolds met representatives of HSBC, Barclays, Lloyds, Standard Chartered and Royal Bank of Scotland last week to hammer out proposals. Labour wants a “help to build” scheme if it wins the general election next year, a policy that would involve government underwriting bank loans to small house-builders with a turnover of up to around £20m a year. These smaller firms have struggled to secure loans as the banks have become more cautious with their money since the onset of the financial crisis. Read more on the Independent website.

Cable: Housing Boom 'Needs Stopping'

Action must be taken to stop the "housing boom" in parts of the UK getting "out of control", according to Business Secretary Vince Cable. He said he was "appalled" that some banks had been lending five times a mortgage applicant's income, suggesting a "stable level" was up to 3.5 times. The desires of potential homeowners should be balanced against the stability of the economy, he added. Mr Cable said that banks "must not throw petrol on the fire" by giving home loans that ran at high multiples of applicants' incomes, although he pointed out that the "boom" was only being seen primarily in the South East of England. Read more on the BBC website.

Housing Boom on Horizon

A new housing boom could be on the way - with a relaxation of planning laws prompting a surge in the number of large housing estates being forced through by developers, a study claims. England’s local authorities approved 195,000 planning applications over the past year, which is a 9 per cent rise on the average before legal changes came in promoting sustainable development. The figures come as a Conservative peer said hundreds of thousands of homes must be built on 800 square miles of British countryside where there are ‘big, open, flat fields of no agricultural merit’. Lord Wolfson of Aspley Guise said the Government must allow construction on greenfield areas - and added that he does not believe the country is already over-developed.  Read more on the Daily Mail website.

London House Boom Puts UK Back On Track

The Telegraph has been investigating the property scene, not just in the capital but across the rest of the country, to gauge its prospects. Research, using data and analysis amassed by several leading estate agents and property experts, shows:

• How extensive the boom in the heart of London has been, with prices 27 per cent above their peak in 2007.

• How this soaring market has helped other areas by acting as an engine of wealth and a counterbalance to the economic downturn.

• How house price rises have already started to ripple out of London, initially into suburbs and commuter towns, but, in the coming years, across the rest of the country.

• How the capital’s housing market, though surging, does not appear to be out of control, since it seems to have solid foundations, making it better placed than many of its rival global cities.

Indeed, such has been the performance of the capital in recent years, supported by an ebullient property market, that experts believe it has made a major contribution to keeping the country afloat. Read more on the Daily Telegraph website.

Help To Buy: Osborne Gives Bank of England Scope to Rein in Boom

George Osborne is to give the Bank of England greater powers to prevent the government's Help to Buy scheme causing a property boom.  Fears have been raised that the attempt to kick-start the market could result in a house price "bubble", with the market overheating and borrowers over-stretching themselves. This is of particular concern in London where prices have risen by around 10% year-on-year. From January, the Help to Buy initiative will provide mortgage guarantees on properties worth up to £600,000 but the Bank's financial policy committee (FPC) will make annual reviews and could recommend that the cap is reduced. It was initially due to assess the scheme after three years. Read more on the Guardian website.

Osborne: 'Let's Not Pretend There's a Housing Boom'

Chancellor of the Exchequer George Osborne has denied that the UK housing market is overheating. Answering questions at the annual meeting of the Institute of Directors he said: "Let's not pretend there's a housing boom". The chancellor pointed out that housing sales and mortgage approvals are still well below the boom years. In August, UK house prices rose at the fastest rate since June 2010, according to the latest survey by the Halifax.  Read more on the BBC website.

How the Government Could Backtrack From Help to Buy

The Help to Buy mortgage scheme has proved controversial since the moment the plans were unveiled. In calling for a rethink, Vince Cable contributed the most damaging criticism so far.  “We don't want a new housing bubble," he told Sky News.  That is the primary concern of critics. The Government appears hell-bent on boosting house prices. Barratt Homes have said the average selling price of one of their homes is up 9pc on a year ago and the chief executive of Barclays raised his concern about a "property-driven boom". Meanwhile the boom in buy-to-let rolls on, with lending up by a nearly third on a year ago.  If the trends continue, and prices rises accelerate, the question for the Government will be how to backtrack from Help to Buy, without the embarrassment of cancelling it.  That would not be difficult. The 15pc of the mortgage the Government is willing to guarantee could be reduced. Offer less and the impact on the market - and risk to taxpayers - is greatly reduced. Read more on the Daily Telegraph website.

Buy-To-Let Fuels House Price Boom

Britain's buy-to-let mortgage market has surged to levels not seen since the 2008 financial crash, prompting fears that a prolonged period of cheap money is setting off an unsustainable housing boom.  Lending to landlords topped £5bn in the past three months, a period that preceded the Bank of England's pledge this week to keep interest rates low for the next three years. More than one in 10 mortgages are now being handed to a would-be landlord while first-time buyers are still struggling to get on the housing ladder. About 40,000 buy-to-let mortgages were advanced in the three months to June, up from 33,000 in the first quarter of the year, as landlords cashed in on cheap mortgage deals and investors sought higher returns than they could get from putting their cash in the bank.  Read more on the Guardian website.