Saturday, 5 April 2014 INDUSTRY Lack of supply leading to problems Experts have warned that the housing market could be at a tipping point after a number of closely watched indicators have reached alarming highs. Key measures such as demand for properties, house prices and mortgage loan-to-value ratios are all rising at record levels, while housing supply is lagging behind. There are now 12 would-be buyers chasing each property on the market, whilst prices have jumped by 18% year-on-year in London, up from a rise of just over 5% in 2007. Meanwhile, e.surv has reported that the number of high loan-to-value deals topped 11,000 for the first time in six years during February. Figures from the Bank of England also reveal that in London one homebuyer in five is borrowing more than four and a half times their income, up from around one in ten in 2007. Willem Buiter, chief economist at Citigroup, says that a housing bubble is developing in the UK and that many households taking out cheap mortgages through Help to Buy will be in “deep trouble” when interest rates rise. Lucian Cook, a director of residential research at Savills, adds that there are now a whole generation of people who think a 0.5% base rate is the norm. The Times, Page: 4 House prices spike again Halifax has reported that house prices rose by 8.7% in the year to March, but fell on a monthly basis by 1.1% when compared to February. The lender pinpointed an improving economy, growth in employment, rising consumer confidence and low interest rates for the overall climb. In the first quarter of 2014 prices rose by 2.3% when compared to the first quarter of 2013. Howard Archer, chief UK and European economist at HIS Global Insight, commented: “The dip in prices in March reported by the Halifax adds to some tentative signs that that a little bit of froth may be coming off the housing market - although it is still robust.” Stephen Noakes, mortgages director at Halifax added: “The recent strengthening in house prices is increasing the amount of equity that many homeowners have in their home. This will potentially encourage and enable more owners to put their property on the market for sale over the coming year, therefore boosting supply and easing pressure on prices.” The Times, Page: 4 The Daily Telegraph, Business, Page: 35 The Independent, Page: 43 Independent I, Page: 47 BBC News Chinese pricing Britons out of homes The Mail argues that a huge property grab by Chinese investors is pricing UK homebuyers out of the market. Major developers including Barratt Homes and Berkeley Group have opened offices in China to tap into demand and the Bank of China is also offering mortgages in sterling to Chinese investors. The paper claims that the phenomenon is not just restricted to London, with cities such as Liverpool and Manchester also affected. Michael Sacks of property development firm Sequre said: “New-build apartment blocks in Britains city centres are being bought en masse and then resold overseas, mostly to the Chinese, for significantly more than they are actually worth. This is causing acute shortages in the cities because entire schemes under construction are snapped up, making it harder for first time buyers to get on the housing ladder.” Mr Sacks said that in northern cities, many new-build flats were being sold to Chinese investors for 25-30% above market value. Daily Mail, Page: 1-2 Scottish prices rise House prices rose by 1.1% in Scotland in the first three months of the year, according to Knight Frank. The rise takes the country’s annual house price increase to 2.8%. Meanwhile, Sequence has reported that house prices in Yorkshire have seen an annual rise of 9%, boosting the cost of the average property to £129,515. Doncaster and Huddersfield top the Yorkshire price rise table. The Times, Page: 44 Yorkshire Post, Page: 2 H2B to be scaled back The Mail claims that the Government’s Help to Buy scheme will be scaled back within months. Senior figures believe the maximum purchases price under H2B will be cut from £600,000 to £300,000 to address “misplaced” concerns that it is fuelling a house price bubble. The paper adds that because the average cost of a house bought using the scheme is £148,048, there will be little impact on buyers. Daily Mail, Page: 2 HOUSING Time to get building Len McCluskey, the leader of Unite, lists his ten point plan to help Labour win the next election. His first point is to build more homes to help the 5m people who are in a housing crisis in the UK. He says that if more houses were built, then more families would have homes to live in and more workers would have jobs. Meanwhile, Ian Bell in the Herald says less talk and more action is need to prevent a housing crisis. He states that given the kind of money the Chancellor has used to inflate the market artificially, councils could have built council houses. He agrees with Vince Cable’s blunt assessment that building more houses is the only solution to Britain’s housing problem. Daily Mirror, Page: 8 The Herald, Page: 15 Boris: London skyline must evolve The Mayor of London, Boris Johnson, writes in the Standard that London’s skyline must evolve to cope with the city’s population growth. He says that sensitively managed, well designed, and in the right place, tall buildings can help to address London’s greatest challenge – a shortage of housing. Mr Johnson adds that City Hall does not have a pact with developers to push through all tall buildings; he notes that 62% of proposals have been rejected. While he also confirms that the Mayoral office is not deserting traditional typologies in favour of high-rise. Evening Standard, Page: 14 PRIME Private wealth driving real estate growth Anna Minton in the FT examines how private wealth is transforming real estate in global cities. She cites a report from Savills, which reveals that more than half of all major global real estate deals are now led by private individuals, in contrast with the debt-lending model of property financing that collapsed when banks stopped lending to property groups. Financial Times, Home, Page: 1-2 RETAIL Lulemon plans UK expansion The Canadian sportswear retailer Lulemon is planning to open up to 30 stores in Britain over the next five years after launching its first European branch in Covent Garden. Chief executive Laurent Potdevin said he hoped a second branch would be open in Chelsea by the end of the year, with more to follow in London and elsewhere in the country. Evening Standard, Page: 33 Promoting the high street Boots, Marks & Spencer, the Co-operative Group and Santander have joined forces as part of a new nationwide campaign to promote UK high streets. The Healthy High Streets initiative aims to increase footfall by 10%, reduce empty property rates and create 3,000 jobs in selected towns. The Daily Telegraph, Page: 35 Betting tax could cost jobs The Association of British Bookmakers (ABB) has warned that up to 10,000 betting shop employees face being made redundant due to the tax rises imposed on the industry. The ABB said in a letter to David Cameron that a total of 2,000 shops could shut because of a “£350m tax burden”. The Times, Business, Page: 49 The Sun, Page: 13 RESIDENTIAL Scrap “right to buy” Scottish MPs are calling for “right to buy” council homes to be scrapped within the year. Members of the Infrastructure and Capital Investment Committee recently called the policy outdated and expressed fears that many homes were being lost as a result. BBC News Willmott Dixon awarded contract Willmott Dixon has secured two contracts worth £91m for repairs to more than 5,000 homes across the Midlands. The Times, Page: 44 RENTAL Buy-to-let concerns The Telegraph’s Richard Dyson discusses whether it is a good time to invest in buy-to-let property. He says the Government’s reform of the annuities market will entice many savers. However, there are dark clouds on the horizon, notably the threat of rising mortgage rates. The Daily Telegraph, Money, Page: 2-3 INFRASTRUCTURE Ministers unveil solar plan The Government has unveiled plans to put solar panels on to thousands of schools, offices and government buildings. They want to exploit 250,000 hectares of south-facing roof space - including 22,000 schools - to reduce energy spending. Energy Minister Greg Barker said: “There is massive potential to turn our large buildings into power stations. It will see British job creation and deliver clean and reliable energy supplies at the lowest possible cost to consumers.” The Daily Telegraph, Page: 14 The Guardian, Page: 4 Daily Mail, Page: 37 The Sun, Page: 19 TAX IHT set to hit 1970s levels According to the Institute for Fiscal Studies (IFS), the amount of IHT to be paid by families in the next few years will reach a level higher than at any time since the early 1970s. The IFS found that if the current IHT arrangement - where 40% tax is applied to assets above £325,000 per person, or £650,000 per married couple - remained in force, receipts would reach a 45-year high in four years time, by 2018. Its research focused on the amount of IHT raised as a proportion of all tax income, stretching back as far as records were readily obtainable. This would bring receipts as a share of national income to a level slightly above the previous peaks in 2007-08 and 1986-87, as shown in the figure below, and would be the highest level of receipts since at least 1973-74, the IFS concluded. It added that the numbers of those paying IHT were also set to quadruple, from just 2.6% of those dying in the 2009-10 tax year to 10% in 2018-19. The increased tax take derives from growth in the economy but primarily from the predicted rise in house prices. Financial Times, Page: 3 The Daily Telegraph, Page: 2 ARABLE Rural land values Savills has revealed that Britain’s farmers are the big financial winners of the past decade, as new research shows that the value of their land almost quadrupled. Savills said that in the decade to 2012, the value of good agricultural land in the UK had grown 270% to £15,411, outstripping gains in prime central London, which rose 135% over the same period. The Daily Telegraph, Business, Page: 35 INTERNATIONAL Australian retailers facing new challenge The FT’s Jamie Smyth looks at the challenges facing Australian retailers as foreign entrants enter the market. H&M is opening its first Australian store today, while Uniqlo, River Island and Banana Republic are all seeking a foothold in the country. Colliers estimates that international retailers plan to introduce 235 stores across Australia over five years, gobbling up 220,000 sq m of retail space. Michael Bate, head of retail at Colliers International, and Alistair Palmer, head of retail at CBRE, provide commentary. Financial Times, Page: 16 ECONOMY London is Europe’s top HQ According to research by Deloitte, more of the world’s largest companies make London their HQ than any other city. The capital also employs a larger percentage of high-skilled workers relative to Europe’s other four main cities that New York does among the top five in North America. Deloitte said that by these two measures, London has greater pre-eminence in Europe that New York enjoys in North America. Financial Times Evening Standard, Page: 53 OTHER Families forced into arrears Christians Against Poverty has warned that families are struggling to keep up with wholesale changes in the benefit system, with the biggest culprit being the so-called “bedroom tax”. The charity said that since the introduction of the spare room subsidy, one in 10 of its new clients has been struggling to pay off a housing benefit overpayment. Families who have turned to the debt charity in the past 12 months had an average debt of £1,613 solely through housing benefit overpayment, while a third had rent arrears and four out of 10 had council tax arrears. The Independent, Page: 47 Independent I, Page: 4
Posted on: Sat, 05 Apr 2014 05:45:25 +0000
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