News

Whatever happened to the Englishman’s castle?

Figures reported in the government’s English Housing Survey show that between 2010 and 2015 the number of homeowners throughout the country has fallen by more than 220,00 , 2/3rds of these in the North of England, despite all we read and hear about growth in housebuilding.

So what is happening to housebuilding if it isn’t translating into Home ownership and traditional suburban housebuilding? Perhaps part of the answer may lie in innovative new concepts of house and flat purchase.

 A new type of tenure to be called “buy as you go” is set to be unveiled in the chancellor’s autumn statement. Inviting buyers and not just limited to the  younger sector, to enter into occupation  paying part rent/ part equity payment and with the prospect of purchase at the end of a fixed term using the growth in equity in the property as a deposit’.

The Homes and Communities Agency , (HCA)  has finally unveiled its £2.3 billion Starter Homes programme , 12 months after first heralding it as the answer to the housing crisis.  This is targeted solely at younger, first time buyers who will be offered the chance to buy at a 20% discount, and with a target of 200,000 units by 2020 – a very tough aspiration given that the programme has lost more than 12 months since first launch.

In Plymouth, the City council, with the significant benefit of HCA funding has acquired a number of important development sites which have been remarketed for “starter homes” with delivery along this model. Perhaps premature as the detail of the “starter homes” as above are not defined and major housebuilders , whilst supportive of the initiative providing that there is an element of subsidy , continue to skirt around such sites with come with a very prescriptive planning brief .  Thus the next phase of the Millbay regeneration in Martin Street, and the large City centre Colin Campbell Court site are both advertised and earmarked for “Starter Home” development. It will be interesting to see whether this aspiration actually grabs market attention and the planned and much needed homes can actually be delivered in this way.

Closer to home being based in Plymouth and also a Stratton Creber Commercial client ,RentPlus has developed an innovative affordable delivery aimed specifically at people aspiring to move from renting to homeownership .   The model which is currently being rolled out across the whole of the south of the country allows tenants to pay an affordable rent with an opportunity to buy their home with the benefit of a gifted deposit. The first Rentplus scheme was developed in Plymouth and has proved popular with major institutional investors and has significant financial backing to support its planned growth, up to 20,000 units.

A nother London based rent only model – Minerva SmartCities – has attracted a great deal of attention, as well as certain scepticism for its headline grabbing pledge to deliver new build apartments in London and elsewhere, at 40% of a market rent for those who can afford only this level (based on a salary of just £25,000 per annum in London) but higher levels for those on higher incomes. The company has the credibility of 2 former senior housing lawyers from a top City firm and significant institutional backing based on the lengthy ground leases – 70 – 120 years negotiated with local authorities and other public sector bodies at minimal ground leases, which leads to long secure and steady income always sought by the insurance and pension industry.  The developer is about to start (beginning 2017) on the first 1000 units on 2 sites in the London area but to roll out the concept across the South east and eventually, the whole of England.

A well established and major housing delivery model is Private Rented Sector (PRS) now well established as a form of tenure and development backed by many of the very biggest financial institutions.  Many cities across the country have seen large blocks emerge on prominent central sites which might previously been considered only for retail or commercial development , but with 200 – 800 1 and 2 bedroom flats let on market rent assured shorthold tenancies to feed an apparently insatiable demand for flexible urban living in high quality new accommodation.

Plymouth has yet to see any major PRS schemes actually in construction but at least 2, totalling over 600 units for unrestricted assured shorthold occupation at market rents, are currently in pre planning and it will be interesting to see how these are received.

 All in all , the house builders , developers and major financial institutions are all seeking to help to solve the “housing crisis” and to demonstrate that that there is more to the “Englishman’s Castle” than the freehold of a 3 bedroom semi and what used to be the suburban dream.

 

Stephen Matcham BSc Hons Est Man FRICS