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Councils must be free to borrow more to build new residential properties

Councils must be free to borrow more to build new residential properties

Councils must be free to borrow more
to build new residential properties

The Government must allow Local Authorities to borrow more money to spend on building so they can tackle housing shortages and build 60,000 extra residential properties in five years, according to the Local Government Association

The Local Government Association (LGA) said that the nine councils listed below were unable to take on any loans at all, even though they have over 40,000 people on accommodation waiting lists.

  • Darlington Borough Council
  • Dudley Borough Council
  • Exeter City Council
  • Gosport Borough Council
  • Harrow Council
  • Royal Borough Greenwich Council
  • South Cambridgeshire District Council
  • Waverley Borough Council
  • Woking Borough Council

The LGA said lifting a cap on local authority borrowing would allow up to 60,000 new residential properties to be built in the next five years.

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Property Portfolio Building With Experts

Property Portfolio Building With Experts

Are you a new or seasoned property investor looking to expand your property portfolio?

Property investment across the world has changed over the last five years, gone are the days of same day purchase and re-mortgage, property investors can’t find No Money Down (NMD) deals and mortgage availability has been better.

Since 2007 /8 when the effects of the economic crisis were first being felt, property investors across the UK became fearful over the subject of finance!

Many property investors have been forced to face the dramatic changes in available property finance since the property crash, when decisions used to be based on providing ultra minimal information and excessive lending to the masses was the norm. In fact, confidence in property was so high that lots of mortgage lenders failed to carry out proper checks into affordability and individual earnings.

The arrival of the financial crisis in 2008 saw banks and Governments realise the extent of the problems caused by irresponsible lending and the result was a global economic meltdown and the introduction of strict lending criteria to such an extent that even the most experienced investors were unable to obtain finance .

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Help-To-Buy Heralded As UK Property Market Saviour

Help-To-Buy Heralded As UK Property Market Saviour

RICS Claim Help-To-Buy Is Reason
For UK Property Market Recovery

The Royal Institute of Chartered Surveyors (RICS) have stated that the Government’s Help-To-Buy scheme and other financial initiatives have seen the UK property market turn the corner after the post recession slump.

In its monthly report RICS said property prices are up for a fourth consecutive month as the largest number of property buyers in 4 years return to the market.

The RICS report particularly picked out the West Midlands and the North East, as two areas which had suffered more than most in the UK property market crash, but these areas experienced the biggest increase in property buyer activity during July.

The widespread pick-up in the UK property market has seen residential property prices rise at their fastest rate since the peak of the property market in November 2006.

There is a growing chorus that the Government’s Help-To-Buy scheme, which was introduced in April to provide equity loans for first time buyers of up to 20% towards the cost of a new build property worth up to £600,000 (GBP) is creating a new property bubble.

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UK Needs To Build Its Way Out Of Recession

UK Needs To Build Its Way Out Of Recession

The UK Government must do more to help stimulate the country’s economic growth, to boost the supply of new residential properties and build its way out of a potential triple-dip recession.

This is the view of the Federation of Master Builders (FMB), as the latest ONS GDP figures released showed output in the sector rose by just 0.3% in the final months of 2012.

The FMB point out that overall the UK economy shrank by 0.3%, keeping the country still struggling to escape the grip of recession, while there was a small increase in construction output.

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A new Government report “Laying The Foundations: A Housing Strategy For England” contains details of new policies intended to revive the UK residential property construction industry and rectify the shortage of available homes.

First-time buyers are set to have mortgages underwritten by the Government and thousands of homes will be built under Government new £400 Million plan, targeting stalled house building schemes aims to break the current cycle in which lenders won’t lend, builders can’t build and buyers can’t buy.

More public land is being earmarked for development as well as money to bring empty houses back in to use. The Government study includes measures to help first-time buyers (FTB) access larger UK mortgages and mentions controversial policies like improving right-to-buy council house discounts.

The UK coalition Government’s Prime Minister David Cameron and his deputy Nick Clegg have said their housing strategy is intended to help people who play by the rules so that they can expect to own a decent home of their own, and also to back construction and introduce the dream of home ownership for more people

Under the £400 million Get Britain Building fund, builders struggling to get finance for developments will be supported so that plans for up to 16,000 houses. It is intended that 3,200 of those built should be affordable homes for first time buyers (FTBs).

The Government announcement comes as construction in the UK is at its lowest level since the Second World War, with tight restrictions on mortgage lending and rent and purchase prices both remaining high.

UK Housing minister Grant Shapps has said that the Government needs to build more than 200,000 homes a year.

Speaking on the Radio 4 Today programme, Mr Shapps said that building more homes is the only way to prevent further rises in rents and meet housing need.

He outlined the Government’s three-pronged approach to stimulate house building, including reviving Right to Buy, releasing Government land on a ‘build now and pay later’ basis, and reforming the planning system.

The Housing Minister said: “We think there has to be a couple of hundred thousand new homes created each year – something in that kind of order. Overall, you have to get all things working in tandem – there is not one single thing you can do to solve a housing crisis that has been building up over years and years.”

Shapps said more details will be released next month when the Government publishes its housing strategy.

Separately, speaking at the Housing Market Intelligence Conference, Mr Shapps’ parliamentary private secretary Jake Berry said that the Government’s house-building plans would be scuppered if it was forced to pull the plug on its controversial planning reforms, stating that “To get the economy moving, Britain must get building”.

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