View more on these topics

Editor’s Note: No more going around the houses

Something we all know, and the industry has been banging the drum about for many years, is that there is a profound need for increased housing supply, particularly in the more populated areas of the UK.

As Imla pointed out last week, there has been a lack of focus or clear strategy to tackle the housing shortage, largely due to the fact that the incumbent of the government post responsible for this sector has changed six times in six years.

The majority of Imla members believe there is a direct correlation between these two factors.

While those already on the housing ladder are benefiting from some of the lowest mortgage rates on record – as the Council of Mortgage Lenders reported last week – undersupply of housing continues to be one of the biggest problems for first-time buyers, with house prices remaining unaffordable for the younger generation because of the relative lack of new-build homes.

On that note, the industry has largely welcomed the Redfern Review that was published last week, which suggests that an independent housing commission be established to deal specifically with the supply problem, and to set out targets and measures to meet them.

However, while research carried out as part of the review found that 80 per cent of adults would prefer to own their own home, an increasing number of individuals and families have no option but to rent on a long-term basis, as has long been the practice of choice in many parts of mainland Europe.

For these long-term renters who struggle to save for a deposit, a rent-to-buy scheme could be the solution, such as the ‘buy as you go’ programme being proposed by the National Housing Federation. It suggests the option to put a share of rental payments towards owning the home one lives in and, after a set period (up to 30 years), one would become the owner of the property.

How affordable the scheme would be remains to be seen, however.

There are murmurs that the Government will make an announcement about this sort of scheme in the Autumn Statement this week, so it’s certainly one to watch out for on Thursday.

Recommended

For-sale-sign-estate-agent-700.jpg
1

Two in five homesellers face price cut from valuation: The Nottingham

Online research conducted for Nottingham Building Society has found that a lack of sound estate agency advice could cost homeowners thousands of pounds. The nationwide study, carried out for the Nottingham by market research firm Consumer Intelligence, found 41 per cent of homeowners, who have sold a house in the past five years, said the […]

Cash-Wallet-Consumer-Retail-Shopping-700x450.jpg

Mortgage affordability at record low: CML

Mortgage costs for first-time buyers and home movers reached record low points in September, according to the Council of Mortgage Lenders. In September, first-time buyers paid  an average of 17.8 per cent of household income to service capital and interest rates. This is down 0.2 per cent from August 2016 and 0.5 per cent year-on-year. […]

Nationwide-building-2013-700x450.jpg

Nationwide H1 profits slip to £696m as commercial real estate arm axed

Nationwide’s half-year profits before tax fell 13 per cent to £696m and the firm will close its Commercial Real Estate arm due to Brexit fallout. At the end of September last year the firm’s profits were £802m. Nationwide says the profit drop is due to record low interest rates, stiff competition in the mortgage market […]

India Election Update

What a difference six months makes. Speaking in September last year, we had warned of ‘excessive pessimism’ afflicting the market’s perception of India. Since then, responsible central bank policy from the Reserve Bank of India (RBI), alongside improving global growth, has meant that India’s macro environment is strengthening quickly. The current account deficit has shrunk, inflation is falling and the government has embarked on a heavy dose of much needed fiscal consolidation. As a result, the rupee has been one of the strongest global currencies this year while the market has touched all-time highs, rallying by more than 20 per cent (GBP) since September. This begs the question: are we now in a period of ‘irrational exuberance’? Not yet.