Posts Tagged ‘House Prices’

Avoiding slum nation for the next generation

Thursday, September 22nd, 2011

The last few weeks have seen a sudden shift in media attention from house prices to housing shortage.  Hallelujah!

For months now I have been warning that Britain is rushing headfirst into a real housing crisis and, recently, I’ve noticed several others getting more vocal on the issue – not least the Home Builders Federation (HBF).

However, when the subject starts being talked about at Number 10, you know you’re getting somewhere.  Yes – David Cameron told MPs earlier this month: “House building is too low in this country, and as we all know, the typical first-time buyer is now in their mid-30s. So we need change – we need more houses to be built.”

About time too!  For reasons out of our control, the housebuilding industry isn’t able to deliver the number of homes required to house our growing population and unless the Government takes action, they will leave behind them an appalling legacy.

However, the housing crisis is right in front of their nose right now.  According to a major study, the results of which were published a couple of week s ago, housing conditions in Britain are among the worst in Europe and cost the nation about £7bn a year by adding to the pressures on the NHS and other public services.

Almost 4,000 people are now sleeping rough on London’s streets – an increase of eight percent since last year.  The number of families on housing waiting lists in London doubled to 362,000 between 1997 and 2010 – and this accounts for just 20% of the waiting list nationally.

In the capital alone, there is expected to be an increase of between 30,000 and 34,000 households every year for the next 25 years, a large proportion of which will be single-person households.

Dr Stephen Battersby, president of the Chartered Institute of Environmental Health (which brought the housing groups together for this report) said of its findings; “The lack of a coherent housing policy for the past 30 years has created an expensive housing market with a shortage of affordable housing.”

There is more to the crisis than just that, but there does need to be an action plan put in place – and sooner rather than later.

The blueprint recommendations of the report were to tackle the housing shortage by the provision of 500,000 green and affordable houses and flats over the next seven years, including bringing empty houses back into use – much like what we have done recently with Infusion our development in Moss Side.

In my view, this will be a good start but unless the Government persuades the banks to increase mortgage supply, they will be fighting a losing battle.

I am hoping that Cameron’s comments were more than just rhetoric on this critical issue but only time will tell and time, I am afraid, is not on the PM’s side with this one.

By Sue Warwick, National Sales and Marketing Director

The best time to invest in property since 1964!

Tuesday, July 26th, 2011

If you are looking to invest in 2011, you may find yourself scratching your head wondering where you can get a good return on investment these days.

Interest rates offered by the banks on savings accounts are still low.  The stock markets are volatile, especially with the high levels of debt running throughout the Eurozone and the US.  The price of gold has hit a record high but this upward trend may not continue forever, as the price is inflated when compared to other commodities.

So what about investing in property?  Well if you look past the small fluctuations in house prices, there are two current economic factors that are creating substantial returns for property investors.

The first factor is interest rates. As we all know, The Bank of England base rate has now been at an historically low level of 0.5% for two years and four months.  It’s worth noting that it has never been this low before, not in its entire history dating back to 1964!

Secondly, demand for rental property has never been so high.  According to LSL Property Services, the average rental price has risen by 4.1% over the last 12 months and is now at an all time high of £701 per month.

So low interest rate buy-to-let mortgages combined with high rental prices are the reason landlords saw an average yield of 5.2% in June.  Plus it isn’t just in London, rental prices in June in the North East and West Midlands rose by 5.1% and 4.6% respectively.

But what about the long term value of your investment?  Well if you consider the 750,000 homes shortage by 2025 (detailed in our recent blog), then I would expect property prices to increase in years to come.  Investing in a new home will also limit the maintenance costs associated with older properties.

So it sounds like a winning formula.  But remember if you are thinking of becoming a landlord, do your research first and don’t forget the pitfalls that can occur with rented property.

Another attractive investment is our MiFamily deposit scheme.  If you can help a family member with their deposit, you can earn the equivalent of 5% interest over 5 years.  Plus, this is paid as a lump sum once the purchaser has legally completed the buying process.  See www.millerhomes.co.uk/familydeposit.

So as the title suggests, perhaps now is the best time to invest in property since 1964…!

By Andy Moorhead – Marketing Manager, Miller Homes

750,000 reasons why your home is worth more than you think

Tuesday, June 7th, 2011

Last week saw an unprecedented number of press articles about house prices – which seem to be going up, down, staying the same, particularly if you are in London, or by the seaside, or in the north, or in the south.  The only thing experts seemed to agree on was that they disagreed.  I have worked in property for nearly two decades and even I was completely confused.

But I did read one statistic that I thought made perfect sense.  And it was this.  House prices are set to be 16 per cent higher by the end of 2015, following a four-year recovery in the market that will start late this year.

According to the Centre for Economics and Business Research (CEBR), property values will start to stabilise towards the end of the year, when the UK’s property shortage will once again underpin prices.

At last, someone has looked past percentage drops and percentage increases here and there looked further ahead than this time next month and seen the stark and frightening truth.  We do not have enough houses to accommodate our growing population.  Come the end of this year,the repercussions of that will really start to kick in.

In their report, my new friends at the CEBR said that with just 130,000 new homes built in 2010, (around half the level needed to keep pace with the growing number of households) prices should increase by 16 per cent between 2011 and 2015.

I don’t know if the increase will be 6, 16 or 26%, but I do know this.  By early next year, there will be more people looking for houses than there are houses.

That’s because, in the third quarter of 2010, planning permissions for new homes were at one of the lowest levels in the last five years, and the second lowest of the last nineteen quarters. In fact, in 2010 the number of new homes built was at its lowest level since 1923.

And, thanks to the Communities Secretary, Eric Pickles, we still don’t have a clear and coherent planning policy so these numbers don’t look set to improve any time soon.

So, having tried to make sense of the inconsistencies in house price statistics last week, I gave up.  It is a pointless exercise. All I need to know is this:  despite several years of warnings from the house building industry, the UK now has more households than houses.  It is a dreadful situation, and one that could have been avoided, but it wasn’t.

Of all the numbers I saw last week, only one really scared me and it was this by 2025, Britain will have 750,000 fewer homes than it needs.  The sooner the press concentrates on this number instead of the average price of a home last month compared to this, the better.

There are bigger things to worry about and in just over ten years time, three quarters of a million people will very sadly be evidence of that.

Sue Warwick – National Sales & Marketing Director, Miller Homes