Docklands News

London is facing its most challenging housebuilding environment since the 2008 financial crisis, according to Mayor Sadiq Khan. In a recent speech, he highlighted that only 2,358 affordable homes were started with City Hall funding in 2023-24, the lowest since he took office. Khan attributed this decline to high mortgage interest rates, rising construction costs, and the lingering effects of Brexit. The Mayor said: “The truth is, we're in the midst of the most difficult period for housebuilding in the capital since the global financial crash of 2008.” Despite a target of starting between 23,900 and 27,100 affordable homes by March 2026, only 1,777 homes had been initiated by March. The London Assembly's housing monitor indicates that nearly 43,000 affordable homes are needed annually until 2041 to meet demand. Fiona Fletcher-Smith, chair of the G15 group, emphasised the urgent need for innovative funding solutions to address the crisis. 

The Standard (11/11/2024)  

The National House Building Council (NHBC) reported a significant 40% increase in new home registrations in the third quarter of 2024, with 28,724 homes registered compared to 20,449 in the same period last year. Steve Wood, chief executive at NHBC, commented: “Our latest quarter's figures show that new home registrations are holding steady with some signs of increased activity on site and an emerging mood of cautious optimism amongst house builders.” However, he emphasised the need for a further uplift to meet the government's target of 1.5m new homes, which relies on easing interest rates and boosting consumer confidence. While private sector registrations rose by 58%, the rental and affordable sector saw only a modest 12% increase. The NHBC's figures also revealed a 9% decline in completed homes, with 27,868 new homes finished in the same quarter. 

Daily Mail (13/11/2024)   The Independent (13/11/2024)   The Mirror (13/11/2024)   The Standard (13/11/2024)  

Recent changes in interest rates and swap rates have led to major lenders, including Nationwide Building Society, HSBC UK, and Santander, increasing their mortgage rates. Nationwide announced that selected two, three, and five-year fixed-rate deals will rise by up to 0.20 percentage points, reflecting the current swap rate environment. A spokesperson from Nationwide stated: “The changes we're making on our fixed-rate range are reflective of that and the rate changes happening across the market.” 

The Independent (12/11/2024)   The Standard (12/11/2024)   The Sun (12/11/2024)   The Times (12/11/2024)  

Stamp duty has evolved into a significant financial burden for millions of home movers, writes Mattie Brignal in the Daily Telegraph. Chancellor Rachel Reeves recently increased the rate for landlords and second homebuyers from 3% to 5% and reduced the basic threshold for paying 2% tax from £250,000 to £125,000. He says this change is expected to affect 83% of movers, adding an average of £2,500 to their costs. Brignal adds that the average stamp duty bill has risen to £2,979, and projections indicate it could reach £7,391 by 2029. Adrian Anderson, of mortgage broker Anderson Harris, says that stamp duty acts as a “big barrier” for people wanting to buy their first home or trade up. He said: “Stamp duty is painful and extremely unpopular, especially for first-time buyers who already have to stretch themselves as much as they can to afford a deposit, as house prices are high relative to incomes." 

The Daily Telegraph (09/11/2024)  

Plans have been submitted to redevelop the site of a Bow tower block that was evacuated in 2021 after inspections revealed it could not “be kept safe without major refurbishment or demolition”. The proposals to knock down Clare House and replace it with a 23-storey residential development were submitted by HTA Design on behalf of landlord Clarion. Clare House was built in 1968 and was originally one of a group of three identical towers that previously formed part of the Monteith Road Estate.  The other two blocks were demolished in 2002 as part of a regeneration masterplan. 

Inside Housing (04/11/2024)  

The UK housing market remains resilient, with the average home price reaching a record high of £293,999 in October, according to Halifax's house price index. Despite concerns over Rachel Reeves's Budget, which may slow demand, Amanda Bryden, head of mortgages at Halifax, noted that "it was more noteworthy that prices had not fallen significantly" since June 2022. The Budget introduced higher stamp duty for second homebuyers and reduced the nil rate for first-time buyers, which could impact future demand. While Halifax anticipates continued price growth, it expects this to occur at a "modest pace" moving forward. In London the average property now costs £543,308, up 3.5% on last year.

BBC News (07/11/2024)   City AM (07/11/2024)   Daily Mail (07/11/2024)   The Standard (07/11/2024)