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Funding Boost For Government Build-To-Rent Plans

Funding Boost For Government Build-To-Rent Plans

Finance Secured To Build Thousands Of
Affordable Properties For Rental Purposes

Government housing minister Kris Hopkins has welcomed a deal that will release £500 Million (GBP) of additional funding to build new affordable residential properties in the UK.

The new investment finance has been secured through an agreement with the European Investment Bank (EIB), that will help deliver up to 4,300 new and affordable homes to rent in areas of the UK.

The funding is set to form part of the £3.5 Billion (GBP) Affordable Housing Guarantees programme, which enables housing associations to use Government guarantees to secure private investment at more competitive rates than they would otherwise be able to secure.

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Government Seek Bids For Build-To-Rent Scheme

Government Seek Bids For Build-To-Rent Scheme

Build-To-Rent scheme seeking bids from property developers to help bring about the fastest rate of affordable residential property construction for two decades 

UK Government Housing Minister, Mark Prisk, last week announced a second round of funding for the construction of new rental properties and the government are seeking fresh bids for a share of at least £400 Million (GBP) to build new properties specifically for the private rental sector (PRS).

The funding is part of the flagship £1 Billion (GBP) Build-To-Rent fund, which offers support for property developers and property investors who want to get into the private rental sector for the first time.

Mr Prisk said the new Build-To-Rent scheme would encourage investment in the UK’s private rental market and offer prospective tenants a greater choice of rental property. The scheme is intended to run alongside up to £10 Billion (GBP) in government housing guarantees.

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Average Residential Property will cost

 £267,000 by 2018

Average UK Residential Property Prices Increase

Average UK Residential Property Prices Increase

Average UK residential property prices for 2014

are estimated to be 2.3% higher than in 2007

Forecasts from the Centre for Economics and Business Research (CEBR) suggest that a typical residential property in the UK will cost an average of £227,000 (GBP) in 2014, overtaking the average peak price of residential property observed at the height of the housing bubble in 2007, for the first time.

The CEBR also predict that the average residential property price will be £222,000 (GBP) by the end of this year, 1.4% higher than average property prices reached in 2012.

By 2018, the CEBR expect the cost of a typical residential property in the UK to average £267,000 (GBP).

In 2014, the CEBR estimate that the Government’s Help-to-Buy scheme could raise UK property prices by up to 0.8% without having any appreciable impact on the current housing supply.

However, if the upward trend in residential property prices continues, it could lead to an additional 4,800 residential properties being built in 2015.

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Specialist Insurance can help landlords profit from property

Specialist Insurance can help landlords avoid tenant rent default

In the UK private rented sector, the average rent for a residential property now stands at a staggering £777 (GBP) per month across the whole of the country but there are some regional differences.

Private sector rents in Greater London rose by 6.7% during the last 12 months to reach a regional average of £1,224 (GBP) per calendar month (pcm).

In stark contrast, PRS tenants in the North-East living in similar sized properties are paying an average rent of just £512 (GBP) pcm.

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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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We are now building fewer new properties than when the Queen first came to the throne in 1952!

While residential properties are smaller than in previous decades, property prices have increased and modern conveniences have changed beyond recognition.

The biggest change in the last 60 years has been in home ownership: this has more than doubled from 32% of all households in England in 1953 to 66% in 2010-11.

The Right to Buy scheme in the 1980s was a key driver of the rise, helping to lift owner occupation from 57% in 1981 to 68% in 1991.

However, owner occupation has been declining since its peak of 71% in 2003.

The Private Rented Sector (PRS) trend shows the reverse of the home ownership pattern. The proportion of rental accommodation in the PRS has fallen by two-thirds since the fifties, from 50% in 1953 to 17% in 2010-11.

However, the private rented sector has been rising again over the last decade, after being as low as 10% in 2001.

The proportion of social (council) housing has also risen and fallen over the same period. From 17% of all households in coronation year, peaked at 32% in 1981 and is now just 18%.

201,860 new residences were built in 1951, compared with an estimated 137,000 in 2011.

New house building reached record levels in the sixties with 425,830 new homes being built.

New residential properties have also been shrinking in size. Properties less than 538 sq ft in size accounted for just 9% of all new homes built before 1980, this proportion doubled after 1980.

The types of new properties being built has also changed. Semi detached houses accounted for 41% of new homes built between 1945 and 1964, but represent only 15% of homes built after 1980.

Flats used to account for 15% of newly constructed property between 1945 and 1964, but after 1980, accounted for 20% of all new housing stock.

There has been a dramatic improvement in the quality of residential property of all types since the end of WWII.

In 1947, 42% of households had no bath or shower and 64% had no basic water supply: by 1991, the proportion had fallen to 0.3% and 1% respectively.

Households in the UK with a second toilet have increased from 31% in 1996 to 41% in 2007.

Another noticeable trend has been the fall of the ‘traditional’ family unit household.

The proportion of households in England occupied by married couples has dropped from 70% in 1971 to 40% in 2011. Over the same period, the proportion of single person households in the UK has risen from 19% in 1971 to 33% in 2011.

Single person households are expected to replace married households as the most common form of household over the next decade.

Over the last 60 years the average UK residential property price has increased 7,278% from £2,200 in 1951 to £162,338 in 2011. This is three times the rise in retail price inflation over the same period (2,477%).

UK property prices have risen in real terms in nearly two out of every three years – 38 out of 60 – since 1951.

* Research compiled from a number of sources by Lloyds TSB

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