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West Midlands records highest ever house-building numbers

JUST under 17,000 new homes were built in the West Midlands last year – the most ever recorded in the region.

Figures published by the West Midlands Combined Authority (WMCA) this week show that 16,938 new homes were built in the region across 2018/19, representing a 15.8 per cent increase on the previous year.

The authority currently has a target to build 215,000 new homes by 2031, something it appears on course to do with these latest figures.

However, papers also note that there remains a ‘considerable under supply of affordable housing.’

Last year 3,801 ‘affordable homes’ were built in the West Midlands, representing 22 per cent of the overall total – a figure which meets the WMCA’s 20 per cent target.

But figures also show that this housing ‘is particularly concentrated in certain pockets of the region’ – something which mayor Andy Street says needs to change if the WMCA’s house building drive is to be considered a success.

“Housebuilding is one of the West Midlands’ real success stories of the last few years and I am delighted that we are well ahead of schedule to build the 215,000 homes we need by 2031,” he said.

“The figures clearly show that the West Midlands is leading a brownfield-first housing revolution in the UK.

“What is most pleasing however is we are building the vast majority of new homes on brownfield land, protecting the region’s precious greenbelt. We are doing this through our brownfield first policy, which, thanks to cash from Government, sees the WMCA remediate derelict industrial sites that have sat untouched for decades.

“However there is plenty more still to be done, particularly around the number of affordable homes being built. To help tackle this the WMCA is introducing a new requirement that any housing development that uses WMCA funds must be at least 20% affordable.”

By Tom Dare

Source: Hereford Times

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House builders demand more Help to Buy subsidies from government

Lobbyists acting for the housing industry have demanded continued Help to Buy (HTB) subsidies from the Scottish Government, despite criticism that the cash simply inflates house prices and benefits large house builders, The Ferret can reveal.

The heads of Homes for Scotland and banking and financial services body UK Finance both pressured the government to extend HTB, according to communications released under freedom of information law.

Both bodies sit on the government’s Help To Buy Scotland affordable new build monitoring group, which gives them privileged access to senior civil servants and monitoring data the government holds on the HTB scheme.

With HTB, the government subsidises the mortgages of prospective buyers by up to 15 per cent of the price of a new home. But critics say it pushes up house prices to the detriment of those on low incomes.

In 2017 we reported that a social policy expert, housing charity Shelter Scotland, and the Scottish Greens, all called on the government to end the controversial scheme. The Greens said the government is now facing pressure from groups with “vested interests”.

‘Dysfunctional’ Help to Buy subsidy should be scrapped, say critics

Transparency campaign group, Spinwatch, said that problems arise “when private companies abuse privileged access in clear conflict of interest situations”. They called on governments to “move away from the involvement of private industry in policy making”.

However, Homes for Scotland said it conveys the views of its members in “a professional and evidence-based manner at all times”, while UK Finance said HTB was a good example of “public and private sector engagement”.

Between 2017-19, the government allocated an average of £25,300 in equity for each home purchased with the subsidy.

Data shows that just under half of the estimated £118 million in taxpayer subsidised mortgages went to Scotland’s three largest housebuilders, Persimmon, Taylor Wimpey and Barratt, between 2017-19. These three firms are all members of Homes for Scotland.

In a letter to finance secretary Derek Mackay MSP, Homes for Scotland chief executive Nicola Barclay put pressure on the government to continue HTB and expand its financial contribution to the scheme.

In a letter dated 8th December 2017, Barclay urged Mackay to inject more money into HTB after the UK Chancellor announced more funds for the English HTB scheme during the 2017 Autumn budget.

Mackay was urged to use the extra money made available to Scottish Government as a result of Barnett consequentials to commit to “as an absolute minimum – an annual budget of £50m for HTB Scotland up to and including 2020-21”.

This would equate to “just 10 per cent of the consequentials”, allowing the government to “fund social rent and other forms of social housing”, Barclay claimed. The government’s “ongoing support is, in our opinion, essential,” she added.

The government was also pressured to extend HTB by UK Finance.

“Our members are getting more concerned about the lack of news on the future of the scheme, particularly as some firms have just joined”, the banking body told a civil servant in an email dated 3 April 2019.

The government’s timescale did not leave “enough time for the industry (both lenders and builders) to adapt or transition”, it added. “What’s happening, please?”

A civil servant replied that the scheme was due to be evaluated “based on evidence, as well the latest economic position”, with the results due by the end of 2019.

In response, UK Finance warned that certain factors had the potential to make it difficult for the government to implement an extension of the scheme if it did not act quickly. These included a Financial Conduct Authority consultation on mortgage affordability rules, as well as Brexit uncertainty and Westminster having extended the scheme in England.

“Without a prompt announcement of Scotland’s intentions for this period, there is a risk of potential competitive disadvantage for Scotland if builders scale-back production there in favour of England where there is clear future commitment of support”, warned UK Finance.

In another email dated 18th June 2019, the body asked when “stakeholder involvement” would be included in the development of the government’s first-time buyer deposits, adding: “the clock is ticking.”

‘Clear conflict of interest’

In minutes of the HTB monitoring group dated 19th June 2018, a civil servant indicated that the two groups would be given privileged access to government data on housing.

Joanne McDowell of the government’s More Homes division confirmed the government was “happy to share monitoring information with Homes for Scotland and UK Finance but not for wider circulation outwith these organisations.”

David Miller, co-founder of Spinwatch, said the relationship between the two bodies and the government was “another indication of the need to move away from the involvement of private industry in policy making”.

He said: “This example shows the problems that arise when private companies abuse privileged access in clear conflict of interest situations.

“The government should be building many more homes to meet the housing crisis and the wholly avoidable daily deaths of homeless people on our streets. They should avoid lining the pockets of building company owners in the process.”

The Scottish Greens’ Andy Wightman MSP, who chairs the cross-party group on housing at Holyrood, argued that HTB “does nothing to tackle the housing crisis”.

The scheme “actually makes housing more expensive for everyone else by pushing up prices generally and does little to benefit those on low incomes or in rural areas,” he said. “It doesn’t surprise me that vested interests are putting pressure on the government.”

Jackie Bennett, director of mortgages at UK Finance argued that HTB “has helped many homeowners to take their first step on to the housing ladder and is a great example of public and private sector engagement.”

She added: “The mortgage industry continues to work with the Scottish Government to support its housing strategy.”

A Homes for Scotland spokesperson said: “As a membership organisation, it is our responsibility to convey the views of those we represent. We do this in a professional and evidence-based manner at all times.

“Our member companies are responsible for delivering the vast majority of new homes that Scotland needs to meet the housing needs and aspirations of its growing population.”

HTB ‘not benefiting those in rural areas’

Data obtained by The Ferret reveals that of the 4,662 subsidised homes built between 2017-19, more than half went to properties in five central belt council areas, with little going to properties in rural council areas.

Some 15 per cent were built in Glasgow, 12 per cent in South Lanarkshire, 11 per cent in North Lanarkshire, and 7 per cent each in Renfrewshire and Edinburgh.

Scotland’s most remote areas benefited least from subsidised mortgages. These included Orkney and Argyll and Bute, the latter of which saw just two homes built. Not a single home supported by HTB was built in Shetland and the Western Isles.

In July we reported that the Scottish Government was failing to meet targets to boost the number of affordable homes for rural and island communities. Campaigners said that excessive bureaucracy, lack of support, tight time frames and restrictive regulations had prevented communities from making use of the funding.

Scottish Government failing to meet rural housing targets

Derek Logie, chief executive of the Rural Housing Scotland charity, said new figures show that HTB “has had a limited impact in some rural areas; despite the welcome Help to Buy for Small Developers scheme.”

Logie called for a “Help to Build” scheme in rural areas “to provide grant support for self build, with the grant converted into an equity share in the completed build.” Such a scheme would “better reflect the nature of housebuilding in rural Scotland and enhance the support already provided through the Self Build Loan Scheme”, he added.

The Scottish Government defended HTB as “a demand-led scheme” that helps buyers into homeownership, while letting them “decide which area they wish to purchase in”.

A spokesperson said that first time buyers and under 35s were the main beneficiaries of HTB and Open Market Shared Equity schemes, making up over 80 and 70 per cent of participants respectively.

However, an “independent evaluation” of all the government’s shared equity schemes was underway and would inform its decisions on the future of HTB ”beyond 2021”, the spokesperson added.

By Jamie Mann

Source: The Ferret

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House building must be a priority for the new government

Building the homes and infrastructure this country needs has to be a key priority for the new government to help drive the economy forward.

This is the view of Brian Berry, chief executive of the Federation of Master Builders, but is a sentiment echoed by many.

Berry commented: “The government needs to back the nation’s army of small builders, by delivering on the promised £3 billion National Skills Fund, investing in quality through a licensing scheme for the whole UK construction industry, and supporting local builders to retrofit the millions of homes that need to be upgraded to low carbon.”

Richard Beresford, chief executive of the National Federation of Builders, said: “The Brexit deadlock has negatively impacted the productivity of construction and housebuilding but our members will be breathing a sigh of relief that a direction of travel can now be set.

“With so many commitments to small business, housing and the climate, we look forward to supporting Prime Minister Johnson to deliver his manifesto and ambitions.”

Custom and self build

Andrew Baddeley-Chappell, CEO of the National Custom and Self Build Association (NaCSBA) welcomed the new government and its manifesto to ‘support community housing by helping people who want to build their own homes find plots of land and access the Help to Buy scheme’.

In particular, NaCSBA will be pressing for action on Help to Buy for custom and self build homes helped by the “oven ready” version of the scheme that it has helped to develop. NaCSBA has also identified actions needed to remove loopholes from the current Right to Build legislation and regulations.

This follows the recognition by the previous Conservative government that “the way in which the house-building market operates constrains the supply of new homes because there is insufficient competition and innovation”.

Green homes

The Builders Merchants Federation (BMF), the trade body representing the UK’s multi-billion pound building materials’ sector, is calling for swift action from the new government to transform the construction industry.

John Newcomb, chief executive of the BMF, wants Conservative leaders to set the conditions for a more productive, greener sector, which in turn will protect and create jobs across the UK.

He said: “Now the real work begins and we need to see a policy and real action to build homes, eliminate carbon in our housing stock and create prosperity.

“We keenly await news of the appointment of both the next housing minister and climate change minister as they have responsibilities affecting the building materials’ supply chain.”

The BMF said ministers must focus on two major issues, namely the narrowing of the gap between housing demand and supply, and the decarbonisation of heating and electrification of homes with sustainable means.

Newcomb added: “On new housing, BMF members want to see unrelenting political determination behind concerted action to simplify and speed up planning approvals for uncontroversial applications to increase housing completions.

“The whole thrust must be implementation, so BMF members can invest confidently in the people and materials and products needed.

“Early clarification on what the future holds for the ‘Help To Buy’ Scheme would be very welcome as a start.

“With regard to decarbonising homes, BMF members have a key role to play as they make and deliver the majority of materials and products used to provide low carbon solutions for today’s housing.

“The BMF urgently wants a coherent, long-term framework that combines better insulation, efficient boilers and low-carbon, micro-generation on the road to net zero carbon emissions.

“Reducing VAT from 20% to 5% on home improvement works is central to this and the BMF, along with others in construction, have already written to Mr Johnson to outline the economic, environmental and social benefits from improving existing properties with a lower VAT rate.”

The BMF has put the value of the builders’ merchant and building material supply sector at £56 billion – which directly provides more than 330,000 jobs, across 23,000 companies in the UK.

Newcomb concluded: “An incredible 80 per cent of all building products used in the construction of homes and buildings are manufactured in the UK.”

New build sector

Founder and CEO of Stone Real Estate, Michael Stone, believes the outlook for the new build sector is good: “We’ve seen many big housebuilders operate on a more hands-off basis of late, largely due to a lower rate of house price growth and a fear of financial underperformance in tough market conditions.

“However, the new build sector has actually been the silver bullet against Brexit uncertainty with those opting to enter the fray rewarded with consistent levels of buyer demand and buoyant sold prices to match.

“With things only about to get better, the new build sector can expect a busy time over the coming year as pent up market apprehension surrounding our political landscape is relieved to a degree, and more homes are built, more homes are bought, and market sentiment receives a well-needed boost.”

By Joanne Atkin

Source: Mortgage Finance Gazette

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Plans to build 400 homes on land near Nuneaton’s largest tip

A decision on whether 400 homes could be built on land near to Nuneaton’s largest tip will be made in the New Year.

New plans have been submitted to Nuneaton and Bedworth Council to build a mini housing estate on land off Tuttle Hill.

A target decision date of February 14, 2020 has been set for the plans, which are the second to be submitted.

It was in May last year that proposals were first sent to the Town Hall, but they did not ever get to the stage where they were debated.

This followed a public consultation in November 2017, when plans for a local centre which would include uses such as a ‘canalside’ pub, doctors surgery, shops, a coffee shop and small hotel were on the table.

However, the latest proposals are simply for up to 400 homes to be built, with two access points off Tuttle Hill, landscaping, open space and two new bridges over the Coventry Canal.

What the plans show

The homes will be split into phases and be built to the right of the entrance to the tip.

It includes the current building, used as offices, at the main entrance.

There are new bridges over the canal and an access point at the side of the new development.

What happens next?

Residents can look at the plans and make comments during public consultation, which will run until December 10.

They can be viewed on the council’s website, searching for planning application number 035595.

Once the public consultation is over, any comments will be reviewed before the target decision date in the middle of February.

It is likely that the plans will be debated by the Town Hall’s planning applications committee.

By Claire Harrison

Source: Coventry Telegraph

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HFS: More SME home builders required if Scottish housing growth to be sustained

With housing completions in 2018 exceeding 20,000 for the first time in a decade, Homes for Scotland (HFS) has stressed the need for more SME home builders if growth is to be continued.

In a new report entitled ‘Small Scale Home Builders: Increasing Supply’, which was published following a year-long special project, the trade body highlights how smaller firms were impacted by the financial crisis and have been slower to recover than larger players in the industry.

HFS chief executive Nicola Barclay said: “Despite the strong demand for housing that exists, smaller builders are delivering some 2000 fewer homes per annum than before 2008. Encouraging more into the market is crucial, not just in terms of volume but particularly in relation to increasing diversity of product, creating local employment opportunities and sustaining more rural communities.

“Smaller companies generally have fewer resources and limited routes to finance which make the challenges of home building all the more difficult to overcome.

“Thanks to their insight, and working alongside other key stakeholders such as the Scottish Government and Heads of Planning Scotland, this report identifies solutions and prioritises the action required to support and grow the small scale home builder sector.”

The report comes as HFS begins tracking quarterly housing completions for 2019 against those of last year. With 15% growth achieved in 2018 compared to the previous year, maintaining such levels of improvement would see a return to the pre-recession build rate average of 25,000 new homes per annum that HFS believes Scotland requires within the next two years. However, this can only happen if the right conditions are in place to support them.

The organisation is also monitoring the volume of new build transactions and planning consents in the pipeline, and on which Barclay added: “We will be keeping a close watch on these two metrics, given the importance of continuing growth to achieving Scotland’s housing and sustainable growth ambitions.”

Source: Scottish Housing News

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New build homes drive UK housing supply increase

UK housing supply soared in the year to the end of March driven by an increase in the number of new homes being built.

There were 241,130 net additional dwellings, up nine per cent on the previous period, with new build homes accounting for 213,660.

Change of use was the second biggest driver behind the spike in accommodation, creating 29,260 additional dwellings.

In total, 14,107 of the net additions through change of use were made using permitted development rights, meaning full planning permission is not required. Of those, 12,032 were former office buildings converted into residential accommodation.

There were also 5,220 new homes added by converting houses to flats and 940 other gains from caravans and boats

Vadim Toader, founder and chief executive of fintech firm Proportunity, said: “Britain’s failure to build enough homes for the past few decades is a key factor behind the affordability we face today and so today’s figures showing housebuilding is at a record high are welcome news.

“However, years of weak wage growth and a challenging savings environment have taken their toll and so many still need a helping hand to get on to the housing ladder”.

“The industry must build on this success, and cannot rest on its laurels,” Andrew Southern, chairman of property developer Southern Grove, added.

“The property market is crying out for more new homes, the demand is there and local authorities, particularly in the cities, need to be open to creative ways of encouraging more affordable schemes in high density areas.”

By Jessica Clark

Source: City AM

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Controversial Armagh housing scheme to be recommended for approval

A controversial plan for a new housing development in the Ashley area of Armagh is to be recommended for approval two years after proposals were first revealed.

As Armagh I reported in November 2017, an application had been submitted to build 47 houses at a cost close to £3.5 million.

Amended plans were brought forward almost a year later with a new application on a smaller scale.

And it is this – consisting of a total of 38 properties – which planning officials at Armagh City, Banbridge and Craigavon Borough Council are poised to recommend for approval.

The new development would have access from Ashley Gardens.

It is described currently as a site made up of “agricultural lands”.

The exact location is given as “lands at Ashley Park (adjacent and west of No’s 7-9 11 12 14-16 Ashley Gardens adjacent and south of No’s 2 3 4 and 4a Ashley Heights adjacent and east of No’s 88 90 92 94 96 and 98 Newry Road and adjacent and north of No’s 8 10 12 and 14 Ashley Avenue)”.

A total of 13 objections had been received in response to the original application, some from the same objectors.

The applicant behind the proposals is Silverbridge-based Blackgate Development Ltd.

The development would consist of two-storey semi-detached and detached homes.

Among those objecting are residents who feel their properties will be impacted upon as they are living in bungalows.

One wrote that they were “deeply unhappy and distressed” by the proposals and insisted that “the surrounding properties are all bungalows”.

She claimed there would be a “loss of natural light”, “loss of privacy” and “loss of view” if proposals proceeded.

The objections and the amended plans have now been considered and planners are of the view that the scheme should be allowed.

That is the opinion which will be presented to the planning committee of ABC Council when it sits on Wednesday.

Councillors there will be tasked with making final decisions.

By Micheal McKenna

Source: Armagh i

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North Ayrshire Council expands house build scheme

North Ayrshire Council is expanding its ambitious masterplan to build hundreds of new council houses.

The newly-approved Strategic Housing Investment Plan (SHIP) will secure investment in a total of 1,695 properties across North Ayrshire over the period 2020-2025, working alongside Registered Social Landlords.

The plan includes a commitment for more new-build homes on top of the council’s already ambitious proposals as well providing a catalyst for the regeneration of towns and communities across the area.

Yvonne Baulk, Head of Service (Physical Environment), said: “We already have one of the biggest council house building projects in the UK and our new Strategic Housing Investment Plan really underlines that commitment to provide modern, affordable homes for our residents.

“Our ambitious house-building programme has delivered 345 news homes so far and, by 2025, we will have built 1,575 high-quality, new council homes, with the Registered Social Landlords adding to that total.

“These new homes will be built in every single part of North Ayrshire, from Irvine to the Garnock Valley, from the North Coast to the Three Towns, and even on our islands of Cumbrae and Arran.

“This is all part of our transformational ambitions for North Ayrshire. Major construction projects like this are crucial in our drive to regenerate our towns and will also secure new and existing jobs and training opportunities for North Ayrshire businesses and residents.”

By Adam Todd

Source: Ardrossan Herald

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Bexley is home to the lowest level of new homes in capital

The London borough of Bexley is in the most need of new build housing stock out of any borough in London, research from Stone Real Estate has found.

Stone Real Estate looked at what proportion of homes listed on the major property portals were new build as a percentage of all stock listed, as well as the boroughs with highest demand based on the largest number of new build properties already listed as sold.

With just 2.5% of all stock currently listed as new builds, Bexley is home to the lowest level of new homes in the capital.

Other boroughs to rank with some of the lowest levels of new build stock are Redbridge (3.1%), Kensington and Chelsea (4%), Waltham Forest (4.2%) and Richmond (4.3%).

The City of London is home to the highest level of new homes with 29.9% of all stock listed for sale falling into the category. Tower Hamlets also ranks high at 23.6%, with Hackney (19.8%), Newham (15.9%) and Lambeth (14.7%) home to a good amount of new build stock.

The only borough to see a higher level of homebuyer demand for new build homes is Bromley with 40% of all new build homes already listed as sold. Sutton (30.2%), Kingston (26.9%) and Waltham Forest (26.8%) were also home to a large appetite for new builds.

While the City of London is home to the largest proportion of new build stock, it’s also home to the lowest level of new build homebuyer demand, with just 3.4% of all new builds listed marked as sold.

Michael Stone, founder and CEO of Stone Real Estate, said: “There’s no denying that we are in desperate need of more housing across the capital and a large proportion of that needs to be affordable, a factor that can often be overlooked when trying to balance the books.

“While house building is a complex task and certainly can’t be done overnight, the data does suggest that perhaps some of our new build efforts across the capital have been poorly targeted and in fact, some of the areas with the lowest level of new homes are the areas where buyers are crying out for them.

“It really is vital that we address the current housing crisis but we do so in a sensible manner to ensure that what we are building is available to those that need it, and doesn’t spend months languishing on the portals due to an unobtainable price tag, or a lack of buyer appetite.”

Westminster was the second-lowest at 7.7% and again, while Hackney and Tower Hamlets are home to some of the highest levels of new build stock, they also ranked low for buyer demand at 8.3% and 8.9% respectively.

By Ryan Fowler

Source: Mortgage Introducer

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Build-to-rent sector up 20% in Q3

The build-to-rent sector grew by 20% year-on-year to 148,000 homes in Q3, research from the British Property Federation (BPF) has revealed.

This includes all build-to-rent homes completed, under construction or in planning across the UK.

The number of units in planning has increased by 23% alone to 77,446.

The average size of build-to-rent developments is also growing.

In Q3 2019, the average size of each completed build-to-rent scheme was 133 units, this increases to 245 units for the schemes under construction, while the average size of schemes in the planning system is higher still at 325 units.

Geographically, growth of the sector is spread evenly between London and the regions, with both areas seeing total growth of 20%.

The number of build-to-rent units inside the capital and in the regions is also similar at 63,200 and 60,337 respectively.

However, in terms of units completed the regions saw the biggest increase, with a significant rise of 41% over the year to Q3 2019.

Ian Fletcher, director of real estate policy at the British Property Federation, said: “The build-to-rent sector continues to attract investment and deliver much needed homes.

“Not only do we have an impressive 31% growth in completions between Q3 2018 and Q3 2019, but the pipeline of new projects is also strengthening.

“Right across the country we are seeing growth in the sector, allowing people to access high quality, institutionally-managed rental properties.

“With both Labour and the Conservatives prioritising house building during their recent party conferences, our data shows build-to-rent is making an important contribution to housing delivery and often on difficult to develop and large urban sites.”

Jacqui Daly, director of Savills Residential Research who conducted the research for the BPF, added: “As individual households increasingly cannot afford to access the housing market, particularly once help to buy is withdrawn, so demand for the quality rented homes the sector provides will rise.

“Built-to-rent already makes a significant contribution to housing delivery, and we project this will increase to one in five new homes as more and more people rely on renting.

“This will change the housebuilder model, with bulk sales to investors growing their share of housing delivery.

“In our opinion, in 10 years, the customer lists of housebuilders will see pension funds and life insurers alongside first-time buyers and second steppers.

“Rather than shouldering the full burden of risk, housebuilders will act as master contractors, forging long-term partnerships with landowners and investors.”

By Ryan Fowler

Source: Mortgage Introducer