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Homebuilder sentiment holds steady despite a decline in mortgage rates

The nation’s homebuilders are feeling positive about their business, but not as much as they did a year ago.

A monthly sentiment measure held steady at 62 from February to March, according to the National Association of Home Builders/Wells Fargo Housing Market Index. The index stood at 70 in March 2018. Anything above 50 is considered positive.

“Builders report the market is stabilizing following the slowdown at the end of 2018, and they anticipate a solid spring home buying season,” said NAHB Chairman Greg Ugalde, a homebuilder and developer from Torrington, Connecticut.

Mortgage rates rose throughout most of last year but have since fallen to below year-ago levels. That should help make all homes more affordable, but new homes come at a higher price than similar existing ones.

Weak affordability has been the biggest problem in the new home market, as builders have largely focused on move-up homes rather than cheaper entry-level products. The median price of a new home sold in January was down nearly 4 percent annually, according to the U.S. Census. That was not necessarily because builders were lowering prices, but because a larger share of entry-level homes sold that month. Sales in January fell to a three-month low.

“More builders are saying that lower price points are selling well, and this was reflected in the government’s new home sales report released last week,” said Robert Dietz, NAHB’s chief economist. “Increased inventory of affordably priced homes — in markets where government policies support such construction — will enable more entry-level buyers to enter the market.”

Builders say they continued to have trouble building lower-priced homes, however, due to shortages of skilled labor and buildable lots.

Of the index’s three components, sales expectations in the next six months rose 3 points over the past month to 71, current sales conditions increased 2 points to 68, and traffic of prospective buyers fell 4 points to 44. Buyer traffic has been in negative territory for several months.

Looking at three-month moving averages, builder sentiment in the Northeast rose 5 points to 48, the South was up 3 points to 66 and the West increased 2 points to 69. Sentiment in the Midwest fell 1 point to 51.

By Diana Olick

Source: Yahoo Finance UK

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Fife’s Housing Investment Plan on target to build 3,500 new houses by 2022

Fife Council has approved an investment plan which aims to deliver 3,500 new homes by 2022. Fife Housing Partnership’s Strategic Housing Investment Plan (SHIP) for 2019-2022 was recently approved by the council’s Community and Housing Services Committee.

It focuses on the delivery of social housing by Fife Council and the Fife Housing Association Alliance over the next four years.

The strong partnership approach between Fife Council and the Fife Housing Association Alliance, enables partners to plan future funding to make best use of resources.

Cllr Judy Hamilton, convener of the community & housing services committee, said: “We remain absolutely committed to meeting the housing needs of people of Fife. There is no doubt in my mind that good quality, warm and safe housing is a determinant of health and well-being. It is the bedrock of strong communities.

“The Strategic Housing Investment Plan outlines a mix of potential development projects, providing Fife with a realistic and practical plan to deliver the vital homes that the people of Fife need. Fife Council and the Fife Housing Association Alliance have an ambitious programme to build 3,500 new affordable homes across the Kingdom by 2022 through Fife’s Strategic Housing Investment Plan.”

Source: Scottish Construction Now

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UK Construction Set for Growth Amid Brexit Uncertainty

The annual Construction Skills Network (CSN) report, which issues a five-year forecast into the skills requirements for the industry, anticipates a 1.3% growth in construction across the UK, which is one-third of a percent lower than last year. The forecast is based on the premise that the UK has an exit deal with the EU.

Public housing is the largest anticipated increase- it appears to be moving steadily ahead as infrastructure declines. Financial support from the local and national government is supporting a growth rate of 3.2% in public housing, which is up by half a percent since the forecast last year.

Infrastructure is expected to increase by 1.9%, which is down from last year’s forecast of 3.1%. This sector has been heavily impacted by Brexit uncertainty and last month’s stalling of Wylfa, the Welsh nuclear power plant.

Commercial construction is going down significantly due to investors being overly cautious in the face of Brexit. The forecast anticipates that the sector will decline sharply in 2019 and level out by 2023, with no growth expected overall.

Despite this outlook, the housing repair and maintenance industry appears to be profiting from a more subdued property market, as homeowners cancel plans to sell and improve their current properties. This sector is expected to grow by 1.7% by 2023.

Although the wider economic outlook remains uncertain, more construction workers will be needed over the coming five years. An estimated 168,500 construction jobs will be created in Britain during that time, 10,000 more than the 2018 forecast. Employment in construction is expected to reach 2.79 million in 2023, which is only 2% lower than its 2008 peak.

CITB Policy Director Steve Radley said that the forecast reflected the uncertainty across the wider economy, primarily due to Brexit.  Concerns about Brexit are weighing on investors and clients at present, which is affecting contractors and their ability to plan for the future.

Mr. Radley said that if a deal is agreed regarding the UK departure from the EU, low but positive growth is expected for the construction industry. Even as infrastructure slows down, public houses and repair and maintenance are showing signs of strengthening. This should result in the number of construction jobs increasing over the next five years, creating more opportunities for construction careers and heightening the importance of tackling the current skills pressures.

Source: CRL

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‘Our towns must expand to thrive’: Shropshire Council says green belt homes are a necessary evil

The prospect of building on the county’s green belt has provoked significant criticism – but Shropshire Council says it is ready to defend the plans as the best way of tackling issues faced by towns.

Plans for thousands of homes in Shropshire are vital to stop the decline of communities and ensure controlled development.

That is the message given today by the man in charge of a ‘preferred sites’ consultation for work up until 2036.

Shropshire Council planning expert Adrian Cooper says the plan for 28,750 new homes is the only way to protect communities from speculative developers, and to prevent towns falling into decline.

He said: “There is a reason – we are not just doing this because we want to upset people. We are doing it to stave off a worse outcome.”

All of Shropshire’s towns and villages feature in the plan, which varies from the modest to the large scale plans for hundreds of homes in both Shifnal and Bridgnorth.

Mr Cooper, the council’s planning policy and strategy manager, said that the impact of a lack of affordable housing was affecting communities across the county, and particularly Bridgnorth, and having a knock on effect on employers and the availability of jobs.

He said: ““If we do not make provision for business to remain and grow and expand and attract and retain employees then they will move and that’s really harmful because it exacerbates existing issues you have in towns like Bridgnorth.”

Green belt homes ‘a necessary evil’

Campaign groups in Bridgnorth and Shifnal have been outraged by Shropshire Council plans for development, with sections of green belt earmarked for future development and the prospect of more than 28,000 new homes.

Permission to build on the green belt is only allowed in exceptional circumstance – something campaigners have insisted does not exist – but a senior council official has moved to defend the plans, particularly in relation to Bridgnorth.

Under Shropshire Council’s preferred sites consultation, land across the county is allocated for where houses and businesses can built up until 2036. The plans are yet to be fully approved by the council and there will be another round of consultation.

It also needs to be approved by a government inspector.

For Bridgnorth a large section of green belt at Stanmore is being allocated for development after 2036, and areas are also included in Shifnal.

The choice has sparked a strong reaction from campaigners who have vowed to resist the proposals.

Mr Cooper said: “In both Shifnal and Bridgnorth the difficulties for some areas is it is in the green belt – somewhere people do not expect to see development and it is more difficult to justify that outcome.

“We say in both cases there is a strong argument in the case of intervention because if you do not do something there are some real risks those places will decline, lose employment opportunities, housing will decline and a whole section of the community risks being disenfranchised over decades.”

Asked about the attitude towards building on the green belt Mr Cooper said: “The way government policy works is no, you should not be looking at it.

“We need to produce good reasons and evidence to justify the outcome.”

Policy will help prevent decline

The planning manager said the council believes the policy is necessary to prevent the decline of the area.

He also said other options for providing the housing in other areas had been looked at and discounted.

He said: “Local circumstances are such that if we do not do something that is being proposed, in effect that outcome justifies the change because you can already see evidence of negative impact, of businesses relocating, local employers being restricted, wage level being relatively poor, affordable housing being limited and all of the social outcomes that come from those changes.

“You could take it and put it in another town. Shrewsbury or a different set of sites that are not in the green belt. What we are saying is we have looked at those options and this is, as far as we are concerned, the best way to tackle the issues Bridgnorth faces in the long term. And we therefore think it is justified to do that. We accept there will be differences of opinion and expect there to be.”

Mr Cooper also said there was pressure from local employers over the need to provide homes for potential workers – a claim which has been questioned by Bridgnorth campaigners.

He said: “In particular in Bridgnorth, local employers are really struggling to retain employees. There are not houses for people on the wages they pay.”

Asked if companies had come forward to raise their concern Mr Cooper said: “Yes, through things like the chamber of commerce and the LEP, these are what spurred the concerns.

“This is an issue that pertains to the local economy in Bridgnorth

“We have had a situation in recent years where we have lost businesses, they have chosen to relocate into Telford or the West Midlands because either they could not get enough space to expand and they needed the space to stay where they were.

“Part of that mix is also access to staff, and it is a bit of a vicious circle and has informed why we have chosen to intervene in the way we have with the local plan.

“Because if we do not make provision for business to remain and grow and expand and attract and retain employees then they will move and that’s really harmful because it exacerbates existing issues you have in Bridgnorth which are about limited employment opportunities for a town of its size and people travelling out of town for work.”

Mr Cooper also said that some of the development which has taken place in Shifnal is the result of not having a plan, and that they are seeking an organised approach to ensure associated infrastructure is built.

He said: “Much of the development in Shifnal now was not planned. It was not in the local development plan. It happened because you do not have five years of housing land set aside so the industry was able to argue it should be able to build on land in Shifnal that had not been allocated for that purpose.”

Source: Shropshire Star

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Another £250m will go towards building new homes in England

The UK government has announced another £250m for building desperately-needed new homes across England.

A new round of housing deals is the latest in a series of steps taken by the government as it strives towards its goal of building 300,000 new homes each year.

As part of this, £157m will be invested for new infrastructure in Cumbria and Devon, the Ministry of Housing, Communities and Local Government (MHCLG) said.

The money will pay for a new motorway link between south Carlisle and the M6, unlocking up to 10,000 new homes at St Cuthbert’s Garden Village.

In Devon, £55m will be spent on road improvements and other infrastructure so 2,500 homes can be built to the south-west of Exeter.

In addition, 1,500 homes will be built in London’s Queen Elizabeth Olympic Park following a £78m loan from Homes England.

The loan is part of the government’s £4.5bn Home Building Fund, which provides development and infrastructure finance to home builders.

The first phase of the development is expected to end in summer 2021, with full completion by 2028, the MHCLG said.

The UK is currently facing its biggest housing shortfall on record, with a backlog of almost 4 million homes, according to research by Heriot-Watt University.

James Brokenshire, communities secretary, said: “We delivered 222,000 homes last year, which is the highest number in a decade, but we must keep upping our game.

“We are invoking the spirit of Britain’s post-war push to build as we strive to hit our target of 300,000 new homes a year by the mid-2020s, for the first time since the days of Harold Macmillan.

“By investing in infrastructure, freeing up public sector land and offering targeted loans we are making the housing market work.

“These deals struck today will help us build almost 25,000 more homes – which is another symbolic step towards our homebuilding targets.”

A new partnership by Homes England will create 10,000 properties on Ministry of Defence land on seven military bases – with the potential for surplus army land to be used in the future.

Tobias Ellwood, minister for defence, people and veterans, said: “As we work to make our military bases more modern and efficient, it’s important that former MOD land is used in a way which serves local residents and the economy.

“This new partnership underlines our commitment to helping housebuilding in this country and will provide good value for money to taxpayers.”

Sites will be developed at bases RAF Henlow, MOD Site 4, Swynnerton Training Camp, Claro and Deverell Barracks, MDPGA Wethersfield, Prince William of Gloucester Barracks and Chetwynd Barracks.

Source: Yahoo Finance UK

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Plans for 20 new homes to fight homelessness in Wolverhampton

Housing bosses in Wolverhampton are set to discuss plans for 20 new homes on the site of a derelict former adventure playground, as part of an ongoing drive to combat homelessness in the city.

The council this week warned private landlords that any homes left empty for long periods of time will be seized and used to provide accommodation for needy families – with houses in Bilston and Pennfields among the latest.

Alongside the council’s Empty Properties Strategy, it is anticipated that the continued residential development of suitable empty areas of land in the borough will help to drive down the numbers of homeless families and rough sleepers in the city.

The site of the former Old Fallings Adventure Playground, which finally closed in November last year following repeated episodes of vandalism, has now been earmarked for a new housing development.

The city council’s Scrutiny Board is set to discuss the matter next month.

Councillor Peter O’Neill, chairman of the council’s Children, Young People and Families Scrutiny Panel, said: “Now that this site has been declared as ‘surplus’, it could instead be used to build much-needed new housing which would greatly revitalise the surrounding area.

“There is a desperate need for housing in the area and we have been working with Wolverhampton Homes and other partners to look at ways in which we can develop it.

“The area is about two and-a-half acres in size and a housing project would mean it is likely to be a building site for a couple of years.

“However, we are actively looking at whether it could be used to help meet the growing demand for new housing in the city by developing around 20 properties on the site.”

The latest two privately owned long-term empty homes identified for compulsory purchase orders by the council this week are located in Beckett Street, Bilston, and Rayleigh Road, Pennfields.

Despite the increasing demand for new housing in Wolverhampton, a recent survey conducted by national firm Attic Self Storage revealed that the number of long-term vacant properties in the West Midlands has steadily improved over the years, with 26,402 in 2004, 10,867 in 2013 and 9,778 by the end of 2017.

During this period Wolverhampton reported an improvement rate of 0.6 per cent behind Walsall and Sandwell.

Source: Express and Star

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Construction output rises despite Brexit uncertainty, says FMB

The Government must not be complacent about the damage a ‘no deal’ Brexit would cause amid positive signs of growth in the UK construction industry, says the Federation of Master Builders (FMB).

Commenting on the construction output figures for November 2018, published by the Office for National Statistics, Sarah McMonagle, Director of External Affairs at the FMB, said: “The UK construction sector grew by 2.1 per cent during September to November 2018 compared with the previous three months. This is despite unparalleled levels of political uncertainty around the very real prospect of a ‘no deal’ scenario. However, we are urging the Government not to allow these results to create a false sense of security. Since November, political uncertainty has cranked up and is increasing every day. A growing and prosperous construction sector will be a distant memory if the Government allows the UK to crash out of the EU without a deal in place.”

McMonagle concluded: “The construction industry is also extremely concerned about the Government’s proposed post-Brexit immigration system. In the Immigration White Paper, published at the end of last year, the Government revealed that they will make few allowances for low skilled workers to enter the UK post-Brexit. Most tradespeople will be defined as low skilled and therefore will not be permitted to enter the UK, regardless of whether they are from the EU or further afield. It is crucial that the Government introduces a post-Brexit immigration system that continues to allow us to draw on essential migrant workers or else their house building and infrastructure targets will be totally unachievable.”

Source: Politics Home

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Britain heads for worst house building decade since 1940s

Britain is heading for the worst house building decade since World War Two.

Despite Government efforts to boost house building, completions in England between 2010 and 2019 are set to average out at around 130,000 per year.

This is well short of the 147,000 achieved in the 2000s or the 150,000 of the 1990s, and half of the level in the 1960s and 1970s.

The picture becomes even worse when population size is factored in.

In the 1960s, the new-build construction rate in England was roughly the equivalent of one home for every 14 people over the decade. In the 2010s, that ratio was one to 43, more than three times higher.

The figures are improved somewhat when you factor in conversions of existing properties, which push the total up – but even then, the total of net additional dwellings – the yardstick for overall housing supply – is likely to be lower this decade than last.

Across the United Kingdom as a whole, the pattern is broadly similar, with house building falling from a peak of 3.6m new units in the 1960s to 1.9m in the 1990s and 2000s, with the 2010s set to come in lower still.

Robert Colvile, Director of the Centre for Policy Studies, said: “The housing crisis is blighting the lives of a generation, and robbing them of the dream of home ownership.

“But as this analysis shows, this is not just the consequence of the financial crisis – it is part of a pattern stretching back half a century, in which we have steadily built fewer and fewer new homes.

“The Government has rightly promised to focus on this issue, and there are encouraging signs that housebuilding is picking up.

“But ministers need to take bold action in 2019 to ensure that the 2020s become the decade in which we break this hugely damaging cycle.”

Source: Construction Enquirer

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Labour hits out as ministers admit just 5% of new ‘affordable’ homes will be in cheapest category

Only five percent of new homes funded under a government scheme will be of the most affordable kind, it has been revealed.

Prime Minister Theresa May has previously pledged to build “new generation of social homes”, which are pegged to local incomes to keep them affordable.

However, responding to a parliamentary question from Labour, Housing Secretary James Brokenshire said: “The £9bn Affordable Homes Programme will deliver at least 250,000 homes by March 2022.

“At least 12,500 of these will be for social rent outside of London. The Greater London Authority has the flexibility to deliver social rent in London.”

The remaining 237,500 homes not set for social rent outside of London are likely to be at the more expensive “affordable” housing rent, which are available to let at 80 percent of their market value.

Labour’s Shadow Housing Secretary condemned the revelation as “not good enough”.

Speaking to the Independent – which first reported on the figures – John Healey said: “There’s been a disastrous fall in the number of new genuinely affordable homes for social rent under the Conservatives.

We are now building over 30,000 fewer social rented homes a year than when I was Labour’s last housing minister in 2010.

“Ministers’ flawed definition of ‘affordable housing’ includes homes for sale at up to £450,000 and to let at 80 per cent of market rents, so it’s just not good enough for ministers to only commit a tiny fraction of the affordable homes budget to new social rented homes.”

Housing and homelessness charities also made their concerns public.

Crisis chief executive Jon Sparkes told the Independent: “It is very disappointing to see such a tiny proportion of the properties to be delivered through the Affordable Homes Programme being made available for social rent.

“Research shows we need 90,000 social homes built every year for the next 15 years to meet demand – both for those experiencing homelessness, and for those on low incomes, many of whom are at risk of homelessness.”

But Housing Minister Kit Malthouse said governments “of all stripes” had built “too few homes of all types, including for affordable and social rent”.

He added: “We’re correcting this with massive investment in house building, including the £9bn affordable homes programme, but also by setting councils free to build the social homes their communities need.

“We expect many thousands of new homes to result and we share the impatience of the British people to see decent homes built for the next generation.”

Source: Politics Home

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The five-year plan to tackle homelessness in Coventry

Growing concerns about the number of homeless people in Coventry are being tackled in a new five-year plan developed by the city council.

From 2013/14 to 2017/18 just over 5,000 approached the council because they were homeless or threatened with homelessness.

The main reasons for homelessness included a family relationship breakdown (29 per cent), end of private rented tenancy (28 per cent in 2017/18) and the violent breakdown of a relationship (13 per cent).

The council’s Housing and Homelessness Strategy 2019-2024 highlights the need to reduce the number of people in temporary accommodation, and provide enough affordable homes.

It also pledges to develop a ‘partnership approach to street homelessness’, bring empty homes back into use and improve maintenance of all rented properties – which makes up 25 per cent of housing in Coventry.

Housing shortage

Latest figures indicate that nationally only around 160-165,000 new house are being built every year – well short of the government’s target to build 300,000 new homes a year.

At a scrutiny meeting this week, cabinet member for housing Councillor Ed Ruane said: “It is not rocket science – we need to build more homes and we need to be less timid when people object to house building.

“We need to be building houses at a much quicker rate than what we are.”

 

Mark Andrews, planning and housing policy manager, added: “There has been a real reference to making sure we do not just deliver affordable houses, but genuinely affordable homes.

“We are thinking about what is affordable to Mr and Mrs Coventry.”

Temporary accommodation

Coventry City Council no longer owns any council housing after the stock was transferred to Whitefriars Housing Group in 2000.

But it is looking at ways to get homeless people into more suited temporary accommodation and recently agreed to enter into a £1.7m lease to place them into Caradoc Hall as just one measure.

 Caradoc Hall
Caradoc Hall

The council’s last contract for homelessness and ex-offenders accommodation and support was awarded to The Salvation Army in April 2014, which was worth £9.1m.

It is due to be re-commissioned when it comes to an end in April, but the council has been urged to rethink this.

Louise Morley, from the Experts by Experience group, said: “We are discussing the possibility of multiple homelessness providers within the city.

“Currently it is the Salvation Army and that’s the choice. Once you have been thrown out of the Salvation Army you are back on the streets.”

Kate Still, West Midlands Housing Group’s chief operating officer added: “There is no single organisation in the city than can meet the full needs of homelessness. It is very diverse.”

Women on the streets

Calls were also made for stand-alone support for women who end up on the streets due to abuse.

Ms Morley added: “We would also like to see some provision for women as well. If you have been subject to any kind of abuse it is currently not fit for purpose.”

A consultation ended on December 18 and will be presented to cabinet and council for approval in February.

By Tom Davis, Local Democracy Reporter

Source: Coventry Telegraph