Birmingham's growing population drives demand for new homes

A growing population, improved transport and a step-change in amenity, career opportunities and lifestyle underpin the demand for new homes in the city. While delivery has grown in recent years, there is a historical shortfall in the number of new homes.

The number of people living in Birmingham will rise by 171,000 to 1.3 million by 2039, according to the latest official population projections. This translates into nearly 100,000 additional households being created over the next two decades or so, as seen in the chart below.

The undersupply of housing across key locations in England is well documented, but a more nuanced picture emerges in Birmingham.

While there was strong development activity before the financial crisis, as shown in figure 6, development levels were then muted for a prolonged period. In the year or two after the financial crisis, the lack of activity may well have been due to an overhang of supply and more modest economic activity.

However, there has been significant economic growth since 2013, and the market is still in ‘catch-up’ mode when it comes meeting potential demand.

Official data shows that around 8,000 homes were completed in Birmingham between the start of 2011 and the end of 2016, while household projection data suggested that demand was closer to 20,000.

However, the number of housing new-build properties helped boost the supply of new homes, the uplift was also due to an increase in the units delivered by ‘change-of-use’, typically where offices were turned into new homes, under ‘Permitted Development Rights’.

There is currently a discussion among policymakers around how much housing is needed across the country, including Birmingham. A recent consultation published by DCLG on calculating housing need suggested that rather than an additional 4,461 new homes a year, as indicated by household growth projections, the city needs 3,577 new homes a year.

The new calculation takes into account other factors such as affordability. Looking to the future, the most recent planning data suggests that around 13,850 private residential units are in the development pipeline – either under construction or with planning granted.

Of these, schemes which will deliver 6,800 private units are currently active on site. However, it is important to note that not all schemes with planning will come to fruition, and some larger schemes may take many years to complete.

Focusing on central Birmingham, the development market has been very active in this area in the last few years, with just over 4,000 units under construction, as shown on the map. However, It is worth noting that some 1,500 units under construction are Build-to-Rent and are therefore not available for open market sale, although they will still meet housing need under rental tenure.

In addition, off-plan sales for schemes currently under construction have also been high, so the number currently available to buyers is significantly lower than the total pipeline delivery figures suggest. In a market where development activity is robust, best-in-class schemes will be the best positioned to outperform.

The activity and demand for housing in Birmingham, especially in the city centre, has acted as a driver for land prices. Knight Frank’s urban brownfield land index – which tracks the values of a basket of sites in five cities including Birmingham and outer London has risen by 22% since December 2014, and much of the growth in the last year has been spurred by the Birmingham market.

Given the uplift in job creation and amenity in the city centre, examined elsewhere in this report, the demand for city-centre living is expected to continue to grow, and the improvement of transport infrastructure both within the city and between Birmingham and other key UK cities, is likely to further augment this trend.

http://www.knightfrank.co.uk/blog/2017/12/14/birminghams-growing-population-drives-demand-for-new-homes?utm_medium=soc&utm_source=Twitter&utm_campaign=Blog&utm_content=posting

Rob Stewart ex-fighter pilot to property expert

Interview with Rob Stewart , who went from flying fighter jets to small Buy-To-Let properties in the North West. Rob has a great vision, to unlock human potential by training people to become better trainers. Rob share's his journey from sourcing for his pilot buddies to using system's to scale his business



More info at http://thepropertyeducationgroup.com/

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Renting a home: How much space will £100 buy you?

Spending £100 a month on rent in London secures floor space equivalent to a small garden shed, compared with nearly five times that in parts of northern England, new research shows.

Data released to BBC News shows cheaper properties to rent in the capital "simply don't exist", letting agents said.

Agents said people were compromising on where they live to make ends meet.

The government said it was increasing spending on affordable housing.

Data from 20 areas of England and Wales relating to two-bedroom houses and flats advertised on OpenRent, and shared with BBC News, reveals:
Each £100 of rent for a two-bed home in central London gets about 3.91 sq m, smaller than the average three-person tent
Bradford is the city where £100 rents the biggest floor area in a two-bed home - 14.83 sq m
Outside London, Oxford (5.03 sq m per £100 a month) and Bristol (6.98 sq m per £100 a month) were the most expensive places in the sample
The average two-bed home in rural Lincolnshire is £200 a month, compared with £1,691 a month in London

Types of property for rent also vary in size. The average London one-bed flat for rent measures 51 sq m, according to the data. By contrast, in rural Shropshire and mid Wales, the average is 77 sq m.

The amount of space you get for your rent is reflected in the space you get for your money when buying. The Office for National Statistics said 1 sq m of floor space - about the size of a red phone box - costs £19,439 in Kensington and Chelsea, while in Blaenau Gwent the same amount of space costs £777.

                               Ed Stennett found renting with a friend was the only way to afford somewhere big enough

For Ed Stennett £1,000 a month, almost twice the national average rent, should have been plenty.

Yet when the app designer moved to central London from Winchester he struggled to find anywhere bigger than a one-room flat for his money.

"Winchester is an expensive place, but even there your money goes further," he said.

"When I was looking in London, £1,000 would get me a studio.

"For some of those it was little more than a room with a sink, a kettle and a microwave.

"Some of the nicer ones might have had space for a double bed, but nothing you'd call a living space. There wouldn't be room for a sofa or a TV."

The 22-year-old said a friend had got a job in London at the same time and the two were able to rent a two-bedroom flat in Bow.

That costs £1,640 a month between them. The national average rent for a property in England and Wales is £926.

Sam Hurst, spokesman for OpenRent, said: "Despite cities like Oxford, Bristol and London being hugely expensive in terms of monthly rents, the properties afforded by those high rents are by no means luxury.

"Having enough room in our homes is very important to our wellbeing, but renters in the south of England are paying a huge premium for it.

"The result is that many in London are compromising on location or who they live with, just to make ends meet.

"Young families who can't afford to buy are in a tough position, since to find the space they need for their growing families, they are forced to move cities.

"Simply looking for smaller properties isn't a solution for renters in the South, either. Those properties simply don't exist."
'Control rents'

Seb Klier, policy and campaigns manager for campaign group Generation Rent, said: "The huge difference in rents around the country lays bare the failure to build enough homes in those areas that have the largest jobs markets.

"It may be much cheaper to rent in Shropshire or Northumberland than in London, Oxford and Bristol, but people are moving to these cities for work and need homes that are affordable.

"To fix this we need much greater ambition from politicians to build homes where they're needed, along with powers to control rents where demand is highest."

A spokesman for the Department for Communities and Local Government said: "We are fixing our broken housing market and making the rental sector fairer and more transparent. Overall rents are now increasing at a lower level than inflation.

"But we're determined to do more and that's why we have increased the affordable housing budget to more than £9bn and introduced measures to boost the delivery of properties.

"We're also delivering on our promise to ban tenant fees, alongside other measures to make renting fairer and increase protection for people."

http://www.bbc.com/news/uk-england-42154476?ocid=socialflow_twitter

Coming soon, my interview with Rob Stewart , ex-fighter pilot turned property expert

Landowners reap benefits of soaring British land prices

UK’s net worth rose by £803bn over the course of last year to stand at £9.8tn at the end of 2016, says ONS

Britain’s landowners have emerged as the biggest winners from the country’s largest yearly increase in national wealth on record, sitting on assets accounting for more than half of the net worth of nearly £10tn.

The UK’s wealth rose by £803bn over the course of last year to stand at £9.8tn at the end of 2016, driven by a sharp increase in the value of land, contributing to the biggest annual rise since records began in 1995, according to the Office for National Statistics.

The value of land has increased more than fivefold over that period, outstripping the increase in the worth of the properties overlying it.

The value of the country’s wealth – as measured by assets accumulated by households, businesses and the state - has risen steadily over the past two decades, barring small setbacks during the financial crisis which have now been left well behind.

Total land value has recovered from a fall of almost £1tn recorded in 2008 amid a crash in house prices during the credit crunch, recovering to its pre-crisis peak in 2014 and rising by £280bn over the course of 2016 to stand at £5tn at the end of last year.

According to a 2010 report for Country Life, a third of Britain’s land still belongs to the aristocracy, while some of the oldest families in the country have held onto their land for several centuries. Some of the most famous noble landowners include the Duke of Westminster, who owns large chunks of Mayfair and Belgravia in London. The Queen’s Crown Estate owns most of Regent Street and swaths of St James’s, as well as thousands of acres of farmland, forests and coastline. There are also vast tracts of land owned by the government, including areas controlled by the Forestry commission, which is thought to be the country’s biggest land manager, with about 900,000 hectares.

The ONS analysis measures the total net worth of the country by estimating the market value of financial assets, such as loans, and non-financial assets, such as land and dwellings. The figures show households and non-profit institutions such as churches, trade unions and social and cultural organisations account for the vast majority of the nation’s wealth.

The £803bn increase in UK net worth from 2015 to 2016 is the largest annual rise on record

The statisticians estimate the net worth attributable to central government stood at negative £1.2tn as a consequence of borrowing to fund the budget deficit.


The former Labour prime minister said the new tax – which would be a levy on underlying land rather than property on it – should replace council tax and business rates to create a “fairer and more rational system of property taxation”.The stark illustration of the gains made by land owners come days after Tony Blair endorsed the idea of a new “land value tax” put forward in Labour’s last manifesto to help solve the country’s housing crisis.


Blair said the new tax, which sees the value of underlying land taxed rather than property, should replace council tax and business rates to create a “fairer and more rational system of property taxation”.

Philip Hammond placed a stamp duty cut for first time buyers and more money for housebuilding at the heart of the budget last month, pledging to boost the number of new homes built to 300,000 a year on average by the mid-2020s – up from 217,000 last year – in the “biggest annual increase in housing supply since 1970”.

The chancellor also said he would do more to tackle land banking – where housing developers sit on land waiting for its value to increase before selling properties for higher prices – with a promise to reform planning rules. Conservative grandee Oliver Letwin, who was David Cameron’s head of policy, will also review the gap between planning permissions and housing starts on behalf of the government.

Letwin’s panel will provide an interim report in time for the Spring statement next year, which Hammond could use as grounding to intervene in the market should it find land being withheld for commercial reasons, rather than technical ones.


There are as many as 270,000 residential planning permissions unbuilt in London alone. Hammond has said that options open to the government could include compulsory purchase powers.




https://www.theguardian.com/business/2017/dec/05/landowners-reap-benefits-of-soaring-british-land-prices?utm_term=Autofeed&CMP=twt_b-gdnnews#link_time=1512513172

Indian buyers pouring money into expensive London property

                                  Indian buyers are looking to buy property like this one near Hyde Park


Indian buyers are pouring into central London’s lethargic high-end property market after a change to how much money they can take out of their home country.

Buying agency Black Brick said that 13pc of sales it has done this year have been to Indian buyers, up from 2.6pc in 2015/16.

Separate research by Cluttons found that between August 2016 and July 2017, Indian buyers accounted for 22pc of the sales in prime central London, made up of the City of Westminster and Kensington and Chelsea, up from 5pc in 2012.

This is partly due to changes in the Reserve Bank of India’s regulations of how much money can be taken out of the country. The so-called liberal remittance scheme was adjusted in 2015, meaning that a family of four can take out $1m, while previously it was only $400,000. Camilla Dell, managing partner at Black Brick, said: “It means that a family of four, after one year, will have $1m to spend, and after two years $2m. It quickly adds up, and explains why a lot of our Indian clients are buying in the £1m to £2m range.”

Property in central London is very attractive to foreign buyers as prices have been falling due to an oversupply of luxury flats and affordability issues. Prices of these luxury homes are 15pc lower than in September 2014, according to Savills. Coupled with the fall in sterling, some international buyers can buy homes for less than they could two years ago.


Black Brick’s Indian clients are split between investors, who largely want to buy new build flats in Shoreditch and White City, and owner-occupiers looking in Mayfair.


Becky Fatemi, managing director of estate agency Rokstone, agreed: “The most popular address for Indian buyers is Mayfair – where the most sought after addresses are Grosvenor Square, South Audley Street and Hill Street. The other alternatives for them are St James’s and Belgravia.” Ms Dell added that she is currently working with a Bollywood actress to buy a London home in Marylebone, Knightsbridge or Mayfair.

According to Black Brick, other big international buyers include those from the Middle East, France, Nigeria and Russia.

http://www.telegraph.co.uk/property/house-prices/indian-buyers-pouring-money-expensive-london-property/?utm_source=dlvr.it&utm_medium=twitter

The £25k flat pack home

Ready made:the £25k home built in six hours IS too good to be true, but there are still benefits to pre-fab housing

The £25,000 home is not the cheap and quick fix it has been billed as, but pre-fab homes can still be the cheaper and quicker self-build option. Here's how to get started.




The £25,000 flat-pack home that can be constructed in just six hours has hit the headlines this week.


The impressive M.A.Di home, made in a factory, can be transported to virtually any location and built without the need for concrete foundations.


It even has the capacity to become “completely off-grid" with solar panels, LED lighting, and grey water systems.

It looks pretty chic, too. But Londoners hoping to make an affordable first step on to the housing ladder shouldn't splurge all their savings on a pre-fab home just yet.

BELOW MINIMUM SPACE REQUIREMENTS

Firstly, it only provides 27sq m of living space.

The minimum size for a single-storey new-build home in the UK is 37sq m; a two-storey home must be at least 58sq m.

This means UK buyers would have to buy the 84sq m version — which raises the price to just over £55,000. Secondly, the cheapest land listed for sale in London at the moment — a plot with planning permission for a two-bedroom house in Peckham — costs £324,999 on plotfinder.net.


While the location is ideal, with many first-time buyers now finding themselves priced out of Peckham, buying the land to put the house on brings the total cost to £375,000.


This is still cheaper than the £479,000 average first home in London. But the biggest barrier to buying a first home in the capital is finding the sizeable deposit required, and a hopeful buyer would need to find at least £55,000 for the modular home plus the deposit for the land.

"Obtaining a mortgage [would also be] unlikely as [M.A.Di homes] are classed as temporary structures," says Samantha Ferneley from Buildoffsite Property Assurance Scheme.

The good news is, thanks to stamp duty changes announced in the Autumn Budget, first-time buyers would only need to stump up £1,250 (as opposed to £6,250).

MODERN DAY MODULAR HOMES

Pre-fabricated homes, and extensions are slowly becoming more popular in the UK, for good reason.

"Pre-fabs have come a long way since the boxes of the 60s," says chief executive of HomeOwners Alliance, Paula Higgins.


"There are brilliant examples out there and opting for a pre-fab can be a good way to guarantee that you get the quality you want, because they are built in a highly controlled factory and assembled on site."


As such they have been touted as one answer to the housing crises, with the capability of closing the gap between supply and demand.

Winston Churchill initially gave the green light for prefab construction as a housing solution for families bombed during the Blitz.

The manufacturing technique peaked in 1968 when around 450,000 prefab homes were built in the UK contributing significantly to the capital’s post-war housing needs. Today only around 2,000 of the original pre-fab homes remain, having suffered from a reputation for poor quality.

Thanks to huge technological developments this reputation is changing fast and pre-fab elements are fast becoming a regular feature on Grand Designs-style builds.

Luxury hi-tech pre-fab homes promise to feature delivery drone landing pads, facial recognition technology to unlock the front door, robot vacuum cleaners and interactive bathroom mirror screens, as standard.

Most also have strong eco-friendly credentials, such as being built from sustainable materials and including rainwater collecting gutters, solar roofing and a car and house battery pack.

SECURING THE PLOT

The first, and crucial step, when opting for a modular home is purchasing land and being confident you will be able to get planning permission.

"It would be best to find land with planning permission attached to it, but this is scarce and comes at a big premium," says Higgins.

"Speak to the local council before purchasing your plot, to find out if there are restrictions. For instance, if it is in a conservation area you may need to build something that is in keeping with your neighbours and an ultra modern modular home is unlikely to do that."

One way to overcome the hurdle of finding land with the right permissions in place is to consider buying an existing (run-down) house and knocking it down.

The initial expense of this would hopefully be offset by the quick build times and the ongoing energy savings from living in a highly-efficient home.

https://www.homesandproperty.co.uk/property-news/the-25k-home-built-in-two-days-is-too-good-to-be-true-but-there-are-still-benefits-to-prefab-housing-a115821.html