Development Finance Today’s Post

The Financial Times is reporting this morning that Chancellor Rt Hon Rachel Reeves is "is planning to raise social rents by more than inflation for the next 10 years in an attempt to boost the building of affordable homes". The annoucement looks set to be made in the October budget - according to Treasury insiders it will be a 10-year rent formula increasing "annual rents in England by the CPI measure of inflation...... plus an additional 1 per cent". #socialhousing https://lnkd.in/ezUXN6eM

An interesting article in the Financial Times this morning, indicating that the Chancellor "is planning to raise social rents by more than inflation for the next 10 years in an attempt to boost the building of affordable homes" (a CPI+1% increase for the next 10 years). I'm sure everyone in the sector will be eagerly awaiting the news from the October budget in relation to this. #socialhousing

Labour winning by a landslide could be good news for the property market, especially as the result went as expected. 🏡 That’s according to Paresh Raja, chief executive of specialist lender Market Financial Solutions, who commented that this election was unusual, given there was little uncertainty on which party was going to win throughout the campaign. Raja said: “The accepted logic is that elections bring uncertainty and are therefore bad news for the property market. But there have been some important differences this time around: Rishi Sunak called for the vote to take place a lot earlier than expected, and the result (a Labour victory) has seemed highly likely from the off.  As a result, there has been less uncertainty than there could have been, and now the ballots have closed, we should see a prompt return to more stable, ‘business as usual’ conditions. “There are enough signs to suggest the market is ready for a post-election uptick in activity. The number of homes coming onto the market in the first half of 2024 is 22.9% higher than last year, while economists are still predicting that the Bank of England will cut the base rate twice before the end of the year, with the first potentially coming on 1st August. If handled right, Labour’s landslide victory could boost lender confidence in the housing market. Their manifesto promises significant investments in housing and measures to increase supply, which could lower borrowing costs and create a more stable market.” Read the article further via Property Wire 👉 https://lnkd.in/eTcHggNx #propertymarket #housingmarket #housingnews #postelection #househunting #electionnews #propertywire #estateagentuk #southwestuk

Landlords get a bashing for buying all the properties and increasing house prices. Why is this not true? Because house prices increase for hundreds of reasons… 1) Inflation. Caused recently by huge quantitative easing from the Bank of England. 2) High 106/ CIL taxation on developers. Removing incentives to build new houses. 3) Increasing material prices and labour costs, increases sale prices. 4) Local council planning restrictions makes land scarce and more expensive to buy. 5) Inefficient and underfunded public sectors bottlenecking development. 6) More demand via increasing immigration, divorce, birth rates and life expectancies. 7) The UK is an island with limited supply of usable development land. 8) Salaries haven’t increased in line with house prices, making them feel more expensive. 9) 21% of UK housing is a government monopoly. Private landlords provide an affordable living alternative to unaffordable house prices. Did you know that house-builders limit the supply of new housing, so not to saturate the market, reduce sale prices and reduce their profits? Did you know that government also restrict new supply of housing, to protect the 60% of UK citizens that own their homes? The government understand that most cannot save money and rely on the value of their home as their number 1 source of wealth and only fund for their retirement.

A national campaign to fix Australia’s housing crisis is urging the federal government to scrap tax concessions for property investors and fund more social dwellings. The call follows publication of a report showing housing affordability has crashed due to private market subsidies taking precedence over directly building accommodation. The report shows the federal budget is expected to lose almost a quarter of a trillion dollars to negative gearing and capital gains tax concessions between 2010-33. It argues investor tax breaks over the next decade could build more than half a million social homes, and have outstripped spending on social housing by at least five times.

Exploring Solutions for Housing Affordability The recent story of George Freeman, a former UK minister, struggling with housing affordability on a £118,300 salary, brings to light a global issue. Similarly, in South Africa, the widening gap between income and housing costs is a growing concern. Looking at successful models elsewhere, programs like Singapore's Housing Development Board (HDB) and Vienna's social housing initiatives offer valuable lessons. These models emphasize long-term affordability through government-subsidized housing and rent control, ensuring that housing remains accessible to a broad spectrum of society. In South Africa, adopting similar strategies could help bridge the affordability gap. It's crucial for professionals and policymakers to consider these models and advocate for sustainable housing solutions. Would these models work in the African context? Read more about George Freeman's situation: https://lnkd.in/dABwdAas #HousingCrisis #AffordableHousing #GlobalTrends #SustainableLiving

If this isn’t a sign to invest in social housing, I don’t know what is! The Labour Party in the UK has introduced significant changes to property and housing laws post-election. Here are the key updates: 🏠 Housing Targets and Planning Reforms: Labour aims to build 1.5 million new homes, focusing on social and affordable housing. 🔑 Renter's Reforms: Labour plans to end "no-fault" evictions under Section 21, providing more security to tenants in the private rental sector. 💼 Taxation Measures: Labour will increase stamp duty for non-UK residents buying property to fund planning officers and support local authorities. 🏡 First-Time Buyers Support: A mortgage guarantee scheme will assist first-time buyers to reduce mortgage costs and enhance accessibility to homeownership. 🔍 Review of Right-to-Buy: Enhanced discounts under the Right-to-Buy scheme will be reviewed, with new protections for newly built social housing. Thoughts on these proposals? #LabourParty #HousingReforms #UKProperty #RealEstateChanges

Is your rent ever going to fall? https://lnkd.in/gvGgsqME from The Economist The definition of “unaffordable” is open to debate, but the oecd and others commonly focus on housing that accounts for more than 30% of gross income or, alternatively, 40% of disposable income (ie, income after tax and social-security charges).

Housing is the biggest risk to economy: -Business leaders view housing crisis as top economic risk. -KPMG Canada survey: 94% see high housing costs, lack of supply as main risks. -87% say housing issues increase need for higher pay, leading to higher labour costs. -High housing costs linked to inflation and high interest rates. -Housing costs strain household budgets, increase economic vulnerability. -Businesses call for public-private collaboration to address housing crisis. -KPMG report highlights need for new housing delivery models. -Federal government introduces funding, measures to boost housing supply. -Majority support tax measures to make housing more affordable.

House hold savings reduced due to Investment in real estate. House financed from loan with interest incurred twice cost of house when repaid in 20 years. Clear evidence of emotional buying instead of rational buying. Rental return @3% increased costs of education and Healthcare. Online spending, spending in eating and staying out ? Will budget policies facilitate increase in family house hold savings? Budget should take care of the plight of lower middle class. They find difficult to meet ends, hence take loans at high interest rates from private money lenders , to repay these loans they have to work in odd jobs including delivery jobs for long working hours. They are in a money trap and its indirectly bonded labour. Bonded to repay loan. Since they don't pay Taxes lowering of Income tax is not going to alleviate their pain. Hope the finance minister talk to such people and do the needful including easy loans from public sector banks. Education scholarships , loans etc. In fact the budget should target the bottom of the pyramid including Lowest economic group and introduce measures to increase their incomes and savings which will increase demand in the economy?