Social Housing Will ‘Hold Up Well’ During Crisis While Market Values Dip

Major valuers in UK social housing have set out their view that the values of social housing properties are expected to “hold up well” through the COVID-19 crisis where the ‘existing use value for social housing’ (EUV-SH) methodology is applied. At the same time, the firms expect ‘market value subject to tenancies’ (MV-T) to experience “modest falls” of up to 10 per cent during the crisis period and for the remainder of the year, while overall transactions in the wider housing market are expected to halve. Read more on the Social Housing website.

https://www.socialhousing.co.uk/news/sector-valuers-social-housing-will-hold-up-well-during-crisis-while-market-values-dip-66246?utm_source=Housing60&utm_medium=email&utm_content=article_link&utm_campaign=H60

Just 5 Per Cent Of New Homes To Be Built With Government Money Will Be Most Affordable Type

Just 5 per cent of homes to be built with government money will be the most affordable type of housing despite the prime minister’s pledge to build a “new generation of social homes“, ministers have admitted. The government said only 12,500 of the 250,000 homes to be built with the affordable homes budget by 2022 will be social homes – equivalent to 2,500 per year. The other 237,500 are likely to be more costly “affordable homes”, which can be sold for hundreds of thousands of pounds or rented out at up to 80 per cent of full market value. Read more on the Independent website.

https://www.independent.co.uk/news/uk/politics/government-housing-social-homes-spending-5-per-cent-affordable-council-theresa-may-conference-a8689591.html

Concern Over Plans To Withhold Right To Buy Payments

Ministers are set to insist on withholding 30% of compensation payment for Right to Buy discounts until replacement homes are started. Associations, in negotiations with ministers on the details of the voluntary scheme, have been pushing against plans for the government to pay 70% of the compensation on sale and the remainder when a replacement home is started. However ministers will not budge on this point as they want a lever to ensure replacement homes are built. Although the NHF insists the deal with government is for full compensation even if homes are not replaced, the emerging split compensation plan is causing concern that associations might not in some instances be able to receive the full open market value of the homes they sell under the scheme. Read more on Inside Housing.

Government Risks Giving Away Billions Through Starter Homes Policy

The Government risks effectively giving away billions of pounds through the controversial starter homes policy unless vital changes are made to the legislation, a charity has warned. Under the proposed starter homes programme, originally announced in 2014, 200,000 first-time buyers would be able to purchase new houses or flats at a 20pc discount to the market rate. Figures compiled exclusively for The Telegraph by Shelter found that buyers of the homes could make as much as £58,000 by selling them at full price once the five-year holding period has expired. On average, those in London who buy a typical starter home at the discounted price and then sell it at full market value five years later would pocket an extra £105,000. Read more on the Daily Telegraph website.

Labour Peer Calls For Answers On Starter Homes

A senior Labour peer has called on the government to explain what is happening with Starter Homes. The Housing and Planning Bill introduces the government’s flagship homeownership policy. Under the policy, first-time buyers under 40 years of age can buy a property with a 20% discount. Major lenders are concerned that buyers would be able to sell their Starter Homes at full market value after five years and make a profit and that this would distort the market and incentivise people to overpay, and have warned the government that they will not support the scheme as it stands. Most major lenders want the 20% discount to be held in perpetuity or for the period where the discount applies to a resale to be extended. Read more on Inside Housing.

Landlords Enjoy 'Best Returns Since 2014'

Landlords are typically seeing the best returns on properties since 2014, according to a buy-to-let index. The average annual return per property for landlords across England and Wales was £21,988 in January, estate agents Your Move and Reeds Rains said. The figure includes income from rent as well as the rising value of the property and also takes into account any void periods, when the property may stand empty. It is the highest in cash terms since August 2014. But it does not include money which will be paid out by landlords for costs such as maintenance and mortgages or rent which is owed but goes unpaid. Read more on the Daily Mail website.

Starter Home Discounts 'Should Be Permanent'

Starter Homes would remain discounted at 20% below market value in perpetuity, under a Labour amendment to the Housing and Planning Bill. The amendment, tabled by shadow housing minister John Healey, is part of a group of changes to the bill put forward by the party, which voted against the bill at second reading on 2 November. The Housing and Planning Bill encourages the supply of Starter Homes – properties sold at a 20% discount to first-time buyers under 40 years old. Under government plans, people who buy the homes will be able to sell the properties for their full market value over five years. However, Labour’s amendment would require the reduction of 20% below market value for Starter Homes to remain in perpetuity. Read more on Inside Housing.

Council Houses Sold At 70% Under Their Market Value

Council houses have been sold off at valuations up to seven years out of date and at discounts bigger than those ever envisaged by Margaret Thatcher. Despite a deepening shortage of affordable housing, town halls have sold off more than 130,000 homes in the last decade at discounts of up to 70% of their market value. The price cuts have amounted to almost £4bn. Between 2012 and 2014, the London Borough of Tower Hamlets sold off more than 50 homes using valuations two or more years out of date, costing the public purse thousands of pounds on each transaction, according to data released under the Freedom of Information Act.  Including discount, the borough sold a one-bedroom flat for £42,000 when it was valued at £142,000. Read more on the Guardian website.