The Royal Institution of Chartered Surveyors is forecasting housing starts will rise again next year helped by a 3% rise in house prices across the UK.
Forecasters said price growth would be driven by recent changes to stamp duty, continuing demand and lack of supply of property.
The housing market forecast warned lack of supply to the housing market remained a running trend, and one that could not be addressed fast enough.
But with increasing levels of house building projects underway forecaster expect housing starts to rise to 155,000 in the UK during the year.
This is compared to 125,000 in 2013 and only around 100,000 in 2012.
It warned that while this was an encouraging trend, it was still insufficient to address the more rapid growth in population and would leave significant shortfalls in all tenures.
Jeremy Blackburn, RICS Head of UK Policy, said: “The political ambition to meet the UK’s housing deficit of 240,000 means that debates around planning, development and delivery will monopolise the pre-election period in the run up to May 2015.
“We’ve seen four housing ministers in this Parliament and there is no reason to think that housing won’t continue to be a political football in the next.
“What we need is certainty, clarity and confidence from government to keep us building homes. Reforms to stamp duty should underpin public confidence and lead to a greater number of housing transactions and we would now look to any future government to review Council Tax.”
On house price growth in the regions, RICS warned London’s pause for breadth would continue into 2015 with prices remaining flat.
The West Midlands, North West and Yorkshire & Humberside regions will deliver strongest growth at 5%, with South West and Wales increasing by just 2%
Predicted growth by region in 2015 (%) East of England 3 East Midlands 3 London 0 North East 3 Northern Ireland 4 North West 5 Scotland 4 South East 5 South West 2 Wales 2 West Midlands 5 Yorkshire and Humberside 5
Although there are some concerns about mortgage availability in the wake of the Mortgage Market Review, a firm economy and stamp duty reform should underpin sales transactions which RICS expects to rise from 1.22m in 2014 to around 1.25m in 2015.
But this is still well below the 1.67m achieved in 2006.
Simon Rubinsohn, RICS Chief Economist, said: “Although the MMR may now be resulting in mortgage lenders being a little more discriminating in the supply of finance, the recently announced, and long overdue reform of stamp duty, is likely to provide a tonic for the market across many parts of the country, particularly for first-time buyers.
“That said, the bigger affordability issue is not going to go away highlighting just how important it is to speed up the supply pipeline of new homes over the coming years’’.
Councils have received almost £3.4bn through the New Homes Bonus for building over 80,000 more homes, according to latest Government figures.This cash has tended to be weighted to the south because more homes are being built at a higher price than in the north. Housing minister Brandon Lewis said the figures demonstrated how more communities were saying ‘yes’ to new development, after planning reforms have put power back into the hands of local people.
He was speaking as the Government revealed findings from its latest evaluation of the the New Homes Bonus and announced £1.2bn provisional allocations for councils. Lewis said these figures suggested that the locally-led system and incentives like the New Homes Bonus were working well.
In the year to October 2014, councils have helped provide 154,000 newly-built homes and conversions.
This includes over 42,000 new affordable homes and over 10,000 empty homes brought back into use.
Critics have long argued the New Homes Bonus amounts to an unfair reallocation of monies that were due to councils anyway.
It has favoured the south, particularly London councils, to the disadvantage of the north and sways councils away from demolishing homes and replacing them. New home completions in England in the 12 months to September were running at 117,070. The last 12-month rolling figure just before the Coalition Government came to power in May 2010 recorded 119,920 completions.
Latest Government figures show since the New Homes Bonus, was introduced in April 2011 more than 700,000 homes and conversions have been registered, and over 100,000 long term empty properties returned to use.
Councils received almost £3.4bn, including a £15m premium for providing affordable homes.
They could spend the money as they saw fit to benefit the local area – including freezing Council Tax.
Lewis said: “We’ve got the country building again and given local communities control over where new homes go in their area. This is in stark contrast to the housing crash and failed top-down regional strategies of the last government.
New Homes Bonus evaluation findings
almost 50% of planning officers agreed the Bonus was a powerful incentive for supporting housing growth
the Bonus is seen to be providing to its stated principles of being simple, transparent and flexible
in 2014 to 2015, 75% of local authorities are net gainers from the New Homes Bonus policy
the New Homes Bonus is largely matching the distribution of housing need
the policy is particularly helping to reduce the number of empty homes
it has strengthened the links between housing, planning and finance for councils
the Bonus is contributing to a more strategic and co-ordinated approach to housing provision within authorities and is one of a number of factors encouraging and supporting a more proactive approach to house building
the policy was supporting more positive attitudes towards new homes; the financial incentive and positive impact on attitudes is expected to further rise in time as the policy works its way through local plan-making
A new scheme offering 100,000 first-time buyers new homes with a 20% discount by lifting planning costs and levies is being rolled out today by the Prime Minister.
Aspiring home owners aged under 40 will be asked to register their interest through the Starter Home initiative from the start of next year – at least 6 months earlier than planned.
The government is today setting out how the scheme will work with a change to the planning system to free under-used or unviable brownfield land from planning costs and levies in return for a below market value sale price on the homes built on the site.
Developers and councils are being consulted about the proposals designed to unlock a range of sites across the country.
Many of the country’s councils and 30 house builders including Taylor Wimpey and Bellway are already looking at sites that could be used for new homes.
The government will now work with the industry to develop a register that, from January, will allow prospective buyers to provide their details and register their interest in owning a Starter Home.
Currently, builders can face an average bill of £15,000 per home in Section 106 affordable housing contributions and tariffs.
Under the Starter Homes proposals developers would be exempt from those Section 106 and Community Infrastructure Levy charges.
The homes could then not be re-sold at market value for a fixed period – making sure that the savings are passed onto homebuyers.
A new design panel, including leading architects like Sir Terry Farrell and Sir Quinlan Terry will be formed to ensure the lower cost homes are well-designed.
Prime Minister David Cameron said: “Hardworking young people want to plan for the future and enjoy the security of being able to own their own home. I want to help them do just that.
“Under this scheme, first-time buyers will be offered the chance of a 20% discount, unlocking home ownership for a generation.
“This is all part of our long-term economic plan to secure a better future for Britain, making sure we are backing those who work hard and get on in life.”
Mike Leonard, CEO of the Modern Masonry Alliance, said: "We welcome this initiative to help more young people unlock the opportunity to own their first home.
"It would be even better if we could work with local builders and councils to deliver the homes where they are needed using locally produced materials and labour.
"In doing so we will create and sustain good quality jobs and the wealth creation we so badly need.
"The focus in the South East must also be re-balanced as we seek to create opportunities across the UK."
Large house builders already pledged to support Starter Homes scheme • Avant • Barratt • Bloor • Cala • Countryside • Crest • Linden/Galliford Try • Miller • Persimmon • Redrow • Taylor Wimpey • Bellway • Capital and Centric • Grainger • Mount Anvil • Development Securities
Smaller builders signed up
• Affleck Property Services • Badger Building (E Anglia) • Border Craft Homes • Carr & Carr (Builders) • Entrench • Farnham Bros (Youldon & Barrett) • Humber Construction Brick Baron • John Collis Group • Keigar Homes • N London Construction • REB South West • Swale Valley Construction • Swallow Hill Homes • Swan Homes (East Midlands) • Tilbury Projects • Beattie Passiv
Local authorities pledged support to the scheme
• London Borough of Bexley • Poole Borough Council (South West) • Wychavon District Council (West Midlands) • South Holland District Council • Royal Borough of Windsor and Maidenhead • Trafford Council • Cheshire West and Chester Council • Sevenoaks District Council • North Norfolk District Council
House price growth in November dipped for the sixth month in a row according to the latest poll of estate agents.
But surveyors are forecasting a sales boost of between 2-5% from Stamp Duty reforms, according to the latest RICS residential market survey.
Despite 15% more surveyors reporting a decline in new buyer enquiries and a fourth consecutive fall in supply to the market, surveyors are expecting more house sales in response to the reforms.
The latest survey found house price growth fall to its slowest pace since May 2013 (a 13% net balance) and the number of houses for sale per branch fall back to its second lowest reading of 56.
Across the UK, price growth was strongest in Scotland and the South West (both a net balance of 37%) and weakest in the North of England and London.
Uncertainty surrounding the outcome of the forthcoming general election is providing potential purchasers with a reason to sit on their hands and new buyer enquiries have now declined for five consecutive months.
Meanwhile in the rental market, tenant demand was steady in November, but landlord instructions declined for the eighth successive month and member’ forecasts for rent over the next 12 months now stand at 2%.
Simon Rubinsohn, RICS Chief Economist, said: “The Stamp Duty reform could reverse the softer trend in buyer enquiries that has been visible in recent months but a critical issue in terms of how it plays out with prices is whether it also encourages more vendors to consider putting their properties back onto the market.
“The expectation from members that transactions could increase by up to 5% over the next year on the back of this measure suggests that there is a belief that supply will indeed respond to the tax change.
“This is all the more important given that the latest RICS data suggests that the average level of inventory on surveyors’ books is close to a historic low.”
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Contributors to The Futures Group include leading experts from national house builders, manufacturers and regulatory bodies.
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