This is our regular Clippings & Musings article from our Editor Helen Duval
There can have been few times over the post war years when things have seemed so turbulent politically. The ‘B’ word or Brexit continues to frustrate, irritate and hamper business life in just about every sector irrespective of individual opinions on whether we should or should not leave.
Looking at the UK and the housing market it seems house prices picked up in April despite values falling in March according to The Halifax. House prices were up 5% compared to last year,, according to a recent report from the UK’s leading mortgage providers.
Despite deferring Brexit until October the whole country still has the jitters about life moving forward. The Midlands and London showed that housebuilding has declined considerably with Brexit blamed for the tough economic conditions.
According to the National House Building Council (NHBC) registered new builds fell by 10% from the previous year in London. After two positive years both East and West Midlands registrations also fell by 10%.
In other regions things varied greatly with many areas demonstrating positive figures particularly in Yorkshire, the North West, Northern Ireland and the east of England all showing a rise in new build registrations.
During the financial crisis 10 years ago the market plummeted but has since seen a steady recovery with typical properties rising by nearly £82,000 in value.
More recently the Government has been urged to evaluate the planning system and tackle the ‘inherent problems’ associated with planning departments. Certain MPs have warned that these issues must be ironed out if building targets of 300,000 new properties are to be met each year. Last year saw just 222,000 new homes built so ministers have been urged to put forward their ideas on improving matters before the end of the year.
The housing market has tipped more in favour of first time buyers although the overall housing market continues to be somewhat downbeat. Currently, the Government lends buyers up to 20pc of the cost of a new-build house, with homeowners needing just 5% deposit for a 75% mortgage. Since 2013 when the Help To Buy scheme was launched around 120,000 home buyers have used the scheme to buy their first home; with approximately 38% of purchases England and Wales financed using this system.
The North East depends on the new housing scheme to fund many property purchases with figures in Burnley, Derby and Warrington all being over 90% funded by Help to Buy in 2018.
As the scheme is due to end in 2023 there are deep concerns that this will affect the house market. With consumers concerned regarding the ramifications of Brexit there has been a slowdown with new buyer enquiries.
In order to combat a shortage of affordable homes particularly for first time buyers, the Government is now working on modular construction ideas with Japan’s leading housebuilder Sekisui House. Factory built homes will be used to transform large, empty commercial buildings into new properties in this new £90 million scheme which some have criticised as a way to hit the Government’s 300,000 new build target but with poorer quality properties.
The UK government’s Homes England body will provide £27 billion for new housebuilding projects .
With ongoing uncertainty homeowners are still uncertain but first-time buyers are on the increase. with low mortgage rates helping to make homes more affordable. New build will need to meet the needs of a diverse house buying market that all have different needs.
Urban renewal is ambitious across the UK right now but affordability and security the focus of anyone about to make any investments in bricks and mortar.
Brexit continues to dominate the news with many industry leaders still unsure what will happen to the housebuilding sector once the UK leaves the EU. For the first-time buyer market things certainly seem to be looking up.