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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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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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Housing minister announces £38m for modular houses across England

Housing minister Esther McVey has said she wants a green housing “revolution” in the North of England composed of hi-tech, prefabricated, modular houses.

Modular housing involves building the majority of a property in a factory beforehand, allowing for mass production and for the main structure to be transported in one go to the site and fitted into place.

Backers of prefab construction point to the need for less construction traffic and the need to address the sector’s ageing core workforce, which is currently being topped up by migrant workers.

She has announced £38m for the initiative, but Labour has criticised it noting that only two of the councils benefiting from the extra cash are situated above the Watford Gap, the theoretical divide that separates the north and south of England.

Hull City Council and Cheshire West and Chester Council will take a slice of the funding, along with North Somerset Council and Bristol City Council in the south west, and Bournemouth, Christchurch and Poole Council and Hastings Borough Council on the south coast.

The money will help with the construction of 2,072 homes and McVey used a speech in Sheffield to say she believes the industry could be worth £40bn post-Brexit and become Britain’s hi-tech manufacturing answer to Silicon Valley.

Of the potential in the north of England she said: “We must invest in this new technology. It’s as simple as that. The benefits are clear. Some modular homes can be built in a factory over a week. And assembled on site in a day.

“Industry has told us some homes built using modern methods can have 80 per cent fewer defects and heating bills up to 70 per cent lower.

“Homes built using modern methods can be of higher quality, greener and built to last. I want to see a housing green revolution. In the north of England where the first industrial revolution began.”

The deals are the latest to be awarded through the government’s £350m Local Authority Accelerated Construction programme, which was launched to accelerate the delivery of local authority housing schemes.

Labour’s shadow housing minister John Healey said McVey had “been caught out” during the announcement.

“The Tories’ pathetic housing proposals have nothing to offer the north of England,” said the Opposition frontbencher.

“The Housing Minister has been caught out making promises to the north, but then giving most of this paltry pot of cash to areas in the south.”

Critics of the new housing tech say smaller suppliers are overlooked in the process and imported materials are favoured, whereas traditionally constructed homes contain 80 per cent of UK-produced materials.

Mike Leonard, from Building Alliance, said modular houses would last for only half the time of a masonry-built home – approximately 60 years – and were “fire prone” given their timber structures.

“They are not designed to last. To put it bluntly, they are caravans without wheels,” he said.

By Jack Loughran

Source: E&T

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Number of new home registrations slowed in third quarter, figures show

The number of new homes being registered slowed down in the third quarter of this year, according to industry figures.

There were 39,364 registrations – down by 9% compared with the same period a year earlier, the National House Building Council (NHBC) said.

The NHBC is a warranty and insurance provider, covering around 80% of new homes built in the UK.

Builders register homes to be built in the coming weeks or months – so the figures are an indicator of the level of new housing supply in the pipeline.

The year-on-year fall in registrations was driven by home registrations in the private sector.

In the private sector, 27,916 homes were registered, 16% down on a year earlier.

The number of affordable homes being registered increased by 11% annually, with 11,448 registrations.

In the West Midlands, registrations jumped by 52% annually, which the NHBC said was boosted by plots registered in Birmingham for the 2022 Commonwealth Games athletes’ village.

NHBC chief executive Steve Wood said: “It is great to see the strength of the affordable and rental sectors whilst we would hope that the slowdown in private sector registrations is transient, and a function of short-term Brexit uncertainties.

“In any event, NHBC will continue to work with builders to raise standards and improve quality for home owners.”

Here are the number of new home registrations between July and September 2019, followed by the same period in 2018 and the percentage change, according to the NHBC:

– North East, 1,849, 2,168, minus 15%
– North West and Merseyside, 3,161, 4,273, minus 26%
– Yorkshire and Humberside, 2,284, 2,901, minus 21%
– West Midlands, 4,760, 3,136, 52%
– East Midlands, 3,232, 3,073, 5%
– Eastern England, 4,143, 3,808, 9%
– South West England, 3,055, 4,604, minus 34%
– London, 5,143, 6,005, minus 14%
– South East England, 6,735, 7,006, minus 4%
– Total England, 34,362, 36,974, minus 7%
– Scotland, 2,820, 3,681, minus 23%
– Wales, 1,045, 1,473, minus 29%
– Northern Ireland and Isle of Man, 1,137, 1,275, minus 11%

By Vicky Shaw

Source: Yahoo Finance UK

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UK Construction Industry in Sharp Slump

UK construction firms saw another tough month in September, according to the latest IHS Markit Construction PMI, which fell to its lowest level since April 2009 on Wednesday after activity fell at its second fastest pace for a decade last month and suggests the sector is in danger of another brush with recession.

The IHS Markit Construction PMI came in at 43.3 for September, down from 45.0 previously and when markets had been looking for no change. This marked the third consecutive decline for the index, which has zig-zagged lower ever since topping out at 55.8 in July 2018. It comes after commercial, civil engineering and residential construction firms all suffered in September.

Commercial firms were again the weakest link, with many suffering due to client hesitancy, which is said to be the result of the Brexit process. Civil engineering activity was reported sharply lower while housebuilders, long the star of the UK construction show given the home supply and demand disparity, saw their fourth consecutive decrease in building. Input costs rose due to higher charges for fuel and some raw materials while employment across the sector fell at its fastest pace since the end of 2010.

“Falling demand from investors and brutal, margin-slashing competition among contractors have sent confidence skittling. Many contractors are now fighting on two fronts, and are being squeezed by rising input costs just as new orders fall sharply,” says Gareth Belsham, director of national property consultancy and surveyors Naismiths. “Britain’s construction sector has become adept at riding out both feast and famine. But even by its volatile standards, the rapid slowdown in demand is causing concern.”

PMI surveys measure changes in industry activity by asking respondents to rate conditions for new orders, production, hiring intentions, prices and inventories. A number above 50.0 indicates industry expansion while a number below 50 is suggestive of contraction. The survey results often correlate with official measures of output, although they can often be wide of the mark too.

The UK construction industry has struggled since the June 2016 Brexit referendum, which has hit the commercial construction sector particularly hard, leading the industry to fall into recession in 2017. Output contracted for three consecutive quarters that year before seeing only a tepid and short-lived recovery in 2018, which has since unwound as the Brexit saga rolls. But the under-the-cosh industry is also now having to cope with the impact that an uncertain global economic backdrop is having on clients.

“The downturn in the construction sector is continuing to worsen, with the risk of a no-deal Brexit largely to blame. The PMI is consistent with construction output falling by about 2.0% in Q3, building on Q2’s 1.2% decline,” says Samuel Tombs, chief UK economist at Pantheon Macroeconomics. “The construction sector could revive quickly if the risk of a no-deal Brexit subsides; in aggregate, the corporate sector has ample cash reserves.”

Tombs, who’s been rated one of the UK’s top forecasters by Bloomberg and Reuters, says the housing market could soon experience a revival because of a decline in the cost of borrowing, which is now feeding through into lower mortgage rates. However, his forecasts suggest the overall construction sector has now seen two consecutive quarters of decline, which is enough to return it to recession at a time when the broader economy is also weak.

UK GDP growth was 0.3% in July, up from 0% previously and marking a strong start to the third quarter for an economy that shrank by 0.2% in the three months to the end of June. The earlier result had seen economists fret about the prospect of a technical recession, which is defined as two consecutive quarters of contraction, although the probability of that happening is now tipped as low.

“We’re revising down our forecast for quarteron-quarter GDP growth in Q3 to 0.3%, from 0.4%, in response to signs that the rebound in industrial production is shaping up to be smaller than we had anticipated. Nonetheless, our forecast still exceeds the MPC’s 0.2% expectation and likely would be sufficiently strong to persuade the Committee that lower interest rates are not warranted,” Tombs wrote, in a recent note to clients.

The UK economy has slowed in recent years amid elevated inflation that’s at times crimped consumer purchasing power, slowing business investment and more recently, a global economic slowdown that’s put the German economy on the door of recession and left the Eurozone at risk of stagnation. Amid that latter slowdown, central banks the world over have rushed to support their economies with lower interest rates and other assistance measures, although the Bank of England (BoE) is yet to follow suit.

Written by James Skinner

Source: Pound Sterling Live

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Five Scottish cities in line for hundreds of family rental homes

Hundreds of new family homes for rental are to be built across Scotland thanks to a partnership deal struck between two property companies.

Five cities have been targeted – Dundee, Edinburgh, Inverness, Perth and Stirling – following the agreement between Scottish housebuilder Springfield Properties and Sigma Capital Group, the Edinburgh-based residential development and urban regeneration specialist.

The move follows the launch earlier this year of the Sigma Scottish PRS Fund – the first dedicated vehicle to focus on the creation of new homes for the private rental market in Scotland. It has initial resources of £43 million, with £30m provided by the Scottish Government’s Building Scotland Fund.

Under the new agreement, Springfield will build family homes for Sigma’s PRS property platform, with the majority of them to be built in the former’s “village” developments.

Graham Barnet, chief executive of Sigma, said the partnership would target the construction of hundreds of new homes for families across the five cities. Once built, the homes will be let under Sigma’s Simple Life lettings brand.

He added: “Springfield has a well-established reputation for delivering quality homes in Scotland and this partnership brings significant benefits for both sides, especially in accelerating the rate at which mixed tenure sites can be developed.

“We look forward to working with Springfield as we develop the partnership and extend our model in Scotland.”

Springfield Properties chief executive Innes Smith said: “We are proud to be chosen by Sigma as their first partner in Scotland to deliver homes for the private rented sector.

“This agreement stands to accelerate our delivery of homes, particularly on village developments, and we expect it to provide a further revenue stream, alongside our existing private and affordable housing activity, with good visibility over cash flows.

“It will also increase the number of homes available in the private rented sector and contribute towards our goal of ensuring that everyone within Scotland has a great place to live.”

Earlier this month, Sigma provided an upbeat outlook for the year and hailed its push into the Scottish private rented sector after revealing solid first-half numbers. Until recently, the firm had been focused on property projects and investments south of the Border.

Barnet said that market fundamentals remained strong with high levels of demand for quality, family-sized rental homes from workers on moderate incomes.

The interim results showed that revenues in the six months to 30 June increased by 19 per cent to £5.8m. Profit before tax for the period rose by 3 per cent to £4.3m. Sigma said the second half of the year had started well.

By SCOTT REID

Source: Scotsman

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Self-build revolution: The pros and cons of building your own home from scratch

Many of us dream of building our own homes. Yet, while it’s a common aspiration in the UK, we’re far less likely to self-build here than in other countries across Europe.

Self-build accounts for between 7% and 10% of all new housing across the country, around 12,000 homes per year, according to a House of Commons briefing paper. By contrast, that figure is 80% in Austria.

Yet a 2011 survey by the Building Societies Association found that more than half of Britons (53%) would consider self-build if the opportunity was available to them. As such, the government has encouraged self-build in recent years, hoping to boost housing supply.

There are both rewards and risks with self-build houses. What is a dream can soon turn into a nightmare as cost and complexity derail self-build projects. Here are the major pros and cons of self-build:

Pros

Bespoke

Because you’re building your own home (or more likely, paying someone else to do the actual work), you’re involved at every stage of the process.

That means you can tailor the design and finish to all of your specific wants and needs. For example, you can build a super-green home that’s so energy efficient you don’t get any electricity bills. Self-build homes are bespoke, so you can get exactly what you want from a property.

Ideal plot

Often when buying a home you’ll need to compromise on the plot. The building may be what you had in mind, but it’s not in the greatest setting.

But when you’re self-building, you’re buying the land as well. So you can choose a plot that meets your desires, such as overlooking the sea, or in a remote rural location.

Savings

In theory, and often in practice, self-build can be cheaper than buying a ready-made home. The cost of land plus construction can, with research and careful planning, come in lower than the resulting property’s market value.

So not only would it be cheaper than buying a similar property that’s already there, but you could make some money off of the end product, too. What’s more, you can claim back VAT on the construction.

Cons

Risky

There’s always the risk that things go wrong or that you weren’t stringent enough in your planning beforehand.

Budgets can quickly spin out of control as unforeseen problems arise during construction and if you’re relying on a mortgage, the money will usually be released in stages, which can create cash flow problems that delay and disrupt the project.

You need to be sure that you have enough money saved up to see the self-build project through to the end because otherwise you’ll end up living in an empty shell of a property with no utilities.

Another risk is that you might make the property a little too bespoke, meaning it’s so unique that the resale market is small, affecting your chance of reselling the house if you ever wanted to.

Stress

Self-build is not for the faint-hearted. These projects can take months, sometimes even years, before the home is finished. That requires a lot of patience, especially if you’re having to rent in awkward or uncomfortable accommodation while work takes place.

You’ll also need a cool head if things go wrong. Moreover, you need to be an excellent project manager, or hire a good one, which is hard if you’re having to work a full-time job alongside overseeing the construction.

No building project is ever straightforward. In truth, self-build is highly stressful. There’s a lot of money — and your home — at stake. Do you have the mettle for it?

Source: Yahoo Finance UK