Average Home Sale Netted Owner £110k Profit In First Year Of The Pandemic

      ·         Home sellers made an average of over £110k profit in the year to May             2021, £15,587 higher than the year previous

·         Sellers in the South East saw the biggest increase in gains, up £18,739 to £141,538, followed by the South West where the average profit rose by over £18,000

·         Detached home sellers made an average gain of £166,586, £22,588 higher than a year previous, while sellers of flats saw their average return increase by less than £1,000

·         Strongest sales activity came from those selling in the 3-7 year period of ownership (38.3%)

Read more on the Savills website.

https://www.savills.co.uk/research_articles/229130/318859-0

More Than One In Six Social Homes ‘Uneconomical’ To Upgrade To Net Zero

In its annual Housing Sector Survey consultancy Savills identified a significant shift towards investment in existing homes. A poll of 138 social housing providers found that 30% expect the need to increase spending in current stock to affect their development programmes. Stock investment, driven by the building safety and zero-carbon agendas, was cited as a top priority by 85% more respondents than in the 2020 survey. Those which have crunched the numbers expect an average cost of £20,600 per home to get their housing stocks to net zero, the research found. But 37% of providers have not yet factored these huge costs into their business plans. Read more on Inside Housing.

https://www.insidehousing.co.uk/news/news/more-than-one-in-six-social-homes-uneconomical-to-upgrade-to-net-zero-research-finds-72443 

House Prices To Surge Another £50,000 Over Next Five Years

House prices are expected to surge another £50,000 over the next five years, further reducing affordability in the UK property market, according to new forecasts. Estate agent Savills predicts house prices will jump nine per cent this year, driven by the extended stamp duty holiday and prospective buyers rushing to purchase larger homes with gardens. The firm also expects an increase of 3.2 per cent next year, and an accumulative 21.5 per cent by the end of 2025. Lower interest rates, an increase in the supply of high loan-to-value mortgages and high levels of savings built up during the pandemic are expected to keep demand elevated. Read more on the City AM website.

https://www.cityam.com/house-prices-to-surge-another-50000-over-next-five-years/ 

Cladding Crisis Causes Problems For Affordable Housing Valuers

 Valuers have warned they are experiencing delays and that there is a lack of information as a result of the ongoing building safety crisis. A joint briefing note from leading valuers Savills and JLL said that when they are not provided with sufficient information on the safety of social housing stock, they cannot attribute values to properties. This in turn means landlords are unable to use this stock as loan security against money they can borrow to fund development. Read more on Inside Housing.

https://www.insidehousing.co.uk/news/news/cladding-crisis-causes-problems-for-affordable-housing-valuers-71255

Green Agenda ‘Putting Pressure’ On Land Values

Research by Savills says UK residential development land values have picked up across the market after a two-year period of mostly static prices. The real estate adviser said uncertainty peaked in the final quarter of 2019 leading up to the election with slowing transactional activity and deals taking longer to complete in some areas of the country. But the election result has caused a rapid rise in confidence both amongst buyers of land and in the housing market, with greenfield land, urban land and house prices all rising at the end of 2019. Read more on the Housing Today website.

https://www.housingtoday.co.uk/news/green-agenda-putting-pressure-on-land-values-says-savills/5104093.article

2019 Saw Increase In Build To Rent Homes

The number of Build to Rent homes delivered across UK regions, excluding London, increased by 51 per cent in 2019. This is according to research published by the British Property Federation (BPF) and carried out by Savills. It found that at the end of Q4 2019, the number of completed Build to Rent homes was 20,120, compared with the 13,312 homes that had been completed in the year to the end of Q4 2018. Read more on the Planning Portal.

https://www.planningportal.co.uk/news

Record 10,000 Build-To-Rent Homes Delivered In 2019

The data, collated by Savills for the BPF, reported that 9,869 build-to-rent homes were completed in 2019, an increase of 48% on the 6,654 built in 2018.  This means a total of 40,181 homes have been built since the inception of the institutionally-backed build-to-rent sector in the early 2010s. The data also shows that, by a narrow margin, the majority of build-to-rent homes are now outside of London, with growth in properties in the regions far outpacing construction in the capital in 2019. Read more on Housing Today.

https://www.housingtoday.co.uk/news/record-10000-build-to-rent-homes-delivered-in-2019/5103770.article

Why Is New Home Delivery Failing To Measure Up?

In the year to June 2019, there were 377,000 full planning consents granted across England, continuing a pattern of decision making that has offered a substantial pipeline of sites since the start of 2017. If these consents were fully implemented as quickly as they were granted, just short of two million homes could be delivered over the course of five years. But the reality is quite different, with a sizable gap of around 124,000 homes per annum between consents granted and homes delivered. The delivery problem, as discussed in previous Savills planning papers, is partly due to a lack of consents granted where need is greatest. Read more on the Savills website. https://pdf.euro.savills.co.uk/uk/residential---other/planning-policy-update-december-2019.pdf

Private Investors Could ‘Tackle’ Annual Shortage Of 60,000 Affordable Homes

According to the new report, 46,000 affordable homes have been built per year in England since 2013, however this, according to Savills, is around 60,000 homes short of what is needed each year. Savills believes that for-profit registered providers are becoming attractive options for institutional investors looking to provide long-term investment in housing. The report states that the growth in large-scale investment in residential real estate in the UK has been “one of the foremost trends across the whole real estate asset class”. It states that affordable housing is one of the biggest opportunities for housing investment, with favourable long-term returns on investment and potential for growth. Read more on the Savills website.

https://www.savills.co.uk/research_articles/229130/293448-0

Seminar Shines Spotlight On Need For Social Housing

Savills Annual Housing Seminar pitched social housing as crucial to the future landscape of the housing sector. Speaking at the seminar in London, Lord Best captured general sentiment when he urged for a regrowth of the social housing sector. He said: “The social sector needs to build itself up more dramatically. The private-rented sector has exceeded the capacity for what it can do…We have to see a regrowth of the social sector.” Lord Best cited figures showing that social housing has declined by half over a 50-year period (currently 17% of housing supply), while there has been around a 100% increase in the growth of the private-rented sector (currently around 20% of housing supply). Read more on 24housing.

https://www.24housing.co.uk/news/savills-seminar-shines-spotlight-on-need-for-social-housing/

UK Housing Market At Its Weakest Point In A Decade

The UK housing market is at the weakest point since the global financial crisis a decade ago as Brexit uncertainty puts off buyers, according to a leading estate agent. Savills, which sells and manages commercial and residential property around the world, said fewer houses were sold in the UK in the first half of 2019 than at any point since the first half of 2009. Read more on the Guardian website.

https://www.theguardian.com/business/2019/aug/08/uk-housing-market-at-its-weakest-point-in-a-decade-brexit-says-savills

Six Times More Affordable Homes Built Than Are Traded Or Sold

The asset management approach of housing associations means six times as many new sub-market rented homes are built as are sold, Savills’ research reveals. The findings come after housing associations received criticism in some media for selling social housing out of the sector for non-social housing use. Savills also found that the number of homes traded between social housing providers has fallen 50% in the past six years. As a result, Savills suggests “stock rationalisation should be higher on the agenda” to maximise financial capacity to build more affordable homes. Read more on the Savills website.

https://www.savills.co.uk/research_articles/229130/272268-0

Housing Market Downturn ‘Could Cut Section 106 Affordable Housing Delivery In Half’

A market downturn similar to the one after the 2008 recession could see Section 106 delivery cut in half, a new report by housing consultancy Savills has warned. The report, titled Affordable Housing: Building Through Cycles, found that housing associations were increasingly exposed to market downturns, based on trends in housing delivery post-2008. Section 106 is a clause in planning legislation which requires developers to include a portion of affordable housing in their developments, which is then often sold to housing associations.It is a primary driver of affordable housing delivery – with 45% of housing association homes (14,437) developed using the mechanism in 2016/17. Read more on the Savills website.

https://www.savills.co.uk/research_articles/229130/271384-0

Right To Buy Replacement Will Be All But Eliminated In Just Five Years

The current Right-to-Buy system only allows councils to keep a third of each RTB receipt to build a replacement home and prevents local authorities from borrowing to make up the shortfall. A new analysis by Savills, commissioned by the LGA, examined the impact of continued restrictions on councils’ ability to borrow to build new homes. It reveals that:

·         Two thirds of councils will have no chance of replacing homes sold off under Right to Buy on a one-for-one basis in five years’ time unless a significant restructuring of the scheme takes place.

·         Around 12,224 homes were sold under RTB last year. Faced with ongoing borrowing restrictions and based on the levels of sales remaining consistent, the analysis estimates that in 2023 councils would only be able to replace approximately 2,000 of these homes.

·         Less than a third of councils would be able to sustain any kind of one-for-one replacement of homes sold under the scheme in five years’ time.

Read more on the LGA website.

https://www.local.gov.uk/about/news/right-buy-replacement-will-be-all-eliminated-just-five-years-warns-lga

Property Unaffordable For 100,000 Households A Year In England

Almost 100,000 households in England are being priced out of the property market each year because of a shortage of affordable homes to rent or buy, according to a report. Research by the estate agent Savills, shared with the Guardian, found the number of priced-out households had risen from its previous projection in 2015 of 70,000 a year. This was in part because of a change in how housing need is assessed, but also due to rising prices and stagnant wage growth. Read more on the Guardian website.

Build-To-Rent Fuels 100,000 Homes Construction Boom

There are now nearly 96,000 build-to-rent homes complete, under construction and in planning, a near 40% jump on the figures for first quarter of this year. According to research by Savills for the British Property Federation, London leads the expansion with Manchester, Leeds, Liverpool and Birmingham catching up fast. Taken together the regional cities also now account for a larger pipeline than the Capital, where private rental schemes first took off. Contractors are also directly joining in the race to supply private rented housing with 19% of planned rooms directly developed by building firms. Read more on Construction Enquirer.

Planning Permissions For New Homes Are Being Granted In The Wrong Areas

Planning permissions granted for new homes are being concentrated in the wrong areas, where there is less need for housing, according to new research by Savills. It found that there is a lack of 90,000 planning consents for homes in the least affordable and most in-demand areas of the country. Only 20pc of planning consents in 2016 were in the most unaffordable places, where the lowest priced homes are at least 11.4 times income. However, 40pc of the country’s total need for new homes is in these markets, while there is a surplus of consents in the most affordable locations. Read more on the Savills website.

88% Of Social Rents Could Increase Without Exceeding LHA Cap

Nearly nine out of ten social homes in the country could increase their rents without hitting the Local Housing Allowance (LHA) cap level.  In looking at rents in the social housing sector, Savills have found that although this is true, “the scope will vary across the country.” They also had a warning for the social housing sector when thinking about rent increases: “Hitting up against the LHA caps could bring housing even closer to the politics of welfare. Rents must be affordable to households both in and out of employment.” Following calls from providers to set their own rents, Savills are somewhat for and against the idea. Read more on the Savills website.

New Housebuilding In London To Halve As Sales Fall

Completions of new homes in London by private builders will plummet to just 18,000 by 2021 as developers adjust to lower rates of sales in the capital, Savills has warned. The property consultancy released its forecasts for the London property market today, showing total completions are expected to peak at 46,500 homes this year, above the 42,000 target set in the London Plan. However, it warns private starts will total just 21,500 this year, with completions by the private sector dropping to 18,000 within four years as builders adjust to lower sales rates. Read more on the Savills website.

Osborne's Stamp Duty Rise Hits House Prices

House prices in parts of London have tumbled by nearly 15 per cent in the past 12 months following a tax raid by George Osborne, according to a report. Savills said the stamp duty surcharge on second homes and buy-to-let properties was ‘the final nail in the coffin’ for the London market.  Estate agency giant Knight Frank said values have been slashed ‘as a result of higher rates of stamp duty’ introduced by the former Chancellor before he was sacked and that ‘price declines may be close to bottoming out’ as the fall in the pound following the Brexit vote makes property in Britain more attractive to wealthy foreign buyers. Read more on the Daily Mail website.