However, despite the apparent pick-up in transactions, the number of sales in the first 11 months of the year [...]]]> Property sales hit their highest monthly level of the year so far in November figures from HM Revenue and Customs (HMRC) have shown.There were 85,000 property sales during the month, up from 79,000 in October, it said.

However, despite the apparent pick-up in transactions, the number of sales in the first 11 months of the year was lower than the same period in 2010.

The property market has been subdued for some time.

Since 2007 sales have been weighed down by the continued rationing of mortgages and the initial reluctance of sellers to drop their asking prices.

There have also been concerns among potential buyers about the state of the economy and the outlook for their jobs.

The HMRC figures show that there were 9,000 more property sales in November, compared with the same month the previous year.

The new monthly total was the highest since July 2010.

However, in the first 11 months of 2011, there were 787,000 sales compared with 810,000 in the same period of 2010.

The firm confirmed strong demand [...]]]> Homebuilder Berkeley has seen a strong rise in profits to £101 million for the six months to the end of October.This was 64% up on the same period last year, but included a £30 million windfall due to the sale of Berkeley’s share in a project for Imperial College in London.

The firm confirmed strong demand for high quality homes in London and the South East, but said its overall market was affected by short-term volatility.

Berkeley said it was on target to meet its full-year forecasts.

“Looking forward, the further increase in forward sales and the strong balance sheet, which remains ungeared without debt, means Berkeley is increasingly well positioned to capitalise on the current market conditions,” said chairman Tony Pidgley.

Berkeley sold 1,506 homes in the half year at an average selling price of £254,000 compared with 1,249 homes sold at £262,000 a year earlier.

The construction company welcomed the government’s recent announcement of measures to boost home building, including a £400 million scheme to kick start stalled construction projects in England and a mortgage indemnity scheme to help up to 100,000 people buy homes with a 5% deposit.

November saw a rise in new contracts and [...]]]> Growth in the UK building sector fell back in November after a surprise gain in October new research suggests.The Markit/Cips Construction Purchasing Managers Index, which is based on a monthly survey of building firms, fell to 52.3, down from 53.9 in October. A value above 50 indicates growth.

November saw a rise in new contracts and the first increase in residential construction for six months.

Markit described growth as modest due to economic head-winds in the industry.

“Raw materials, energy and fuel prices continue to hinder the sector, construction companies cite these as the main contributing factors for high input prices which have increased for the 22nd month running,” said David Noble, chief executive at the Chartered Institute of

On Thursday, Markit/Cips data showed that the UK’s manufacturing sector shrank at its fastest pace in 18 months.

But HMRC is pursuing tax avoiders and law firms have issued warnings.

Homebuyers are legally [...]]]> HM Revenue and Customs (HMRC) says it is chasing unpaid tax of £35 million amid tax planning and “mitigation” schemes being offered on the internet.Dozens of websites are now advertising deals, for a fee, claiming there is a loophole in the law.

But HMRC is pursuing tax avoiders and law firms have issued warnings.

Homebuyers are legally required to pay a stamp duty land tax of between 1% and 5% of the value of a home they buy.

Buyers are liable for the tax when they spend more than £125,000 on a property.

The websites claim that tax specialists will use “stamp duty tax planning” to negate a homebuyers requirement to pay the duty. They charge a fee of around half of the amount that would have been paid in tax.

Online calculators aim to assist people to work out how much they can save. Those who sell the schemes say customers are attracted because of tough economic times and mortgage lenders’ requirements of higher deposits.

Stamp duty thresholds:

• 1%: Properties of £125,000 to £250,000, but first-time buyers are currently exempt
• 3%: £250,000 to £500,000
• 4%: More than £500,000
• 5%: More than £1m, residential property only

The main methos is to set up a limited liability company to buy the property, which then immediately sold it back to the individual.

Tax planners claim they are legally exploiting loopholes in the current law.

But an HMRC spokesman said: “The schemes rely on an interpretation of law that produces an outcome different from that envisaged when the law was enacted, and that HMRC does not accept.”

Anyone using an avoidance scheme was artificially reducing the tax due on property transactions, giving them an unfair financial advantage over the majority of property purchasers who played by the rules, he said.

The tax authority was investigating 1,200 people it believed had underpaid tax totalling £35m.

HMRC was gearing up to challenge the schemes through the courts, the spokesman said.

Law firms have warned against the internet schemes’ tactics.

When a property is purchased through a company, whether based offshore or in the UK, it pays the same rate of stamp duty as if it were an individual.

Stamp duty may be avoided by future purchasers when the company decides to sell the property. This is done by the owner selling shares in the company rather than the property itself, but the duty will be paid on the initial purchase.

In August, the index had read 52.6.

Markit said fewer new orders was the reason behind the slowdown, but [...]]]> Activity in the UK construction sector slowed to “near stagnation” in September, a closely-watched survey has suggested.The Markit/Cips construction purchasing managers’ index (PMI) fell to 50.1, just fractionally above the 50 “no-change” threshold that separates expansion from contraction.

In August, the index had read 52.6.

Markit said fewer new orders was the reason behind the slowdown, but added that staffing levels rose slightly.

Confidence in the sector remained relatively subdued, the research group said.

Also last week as the Re-Mortgager reported, builders’ merchant Wolseley announced a return to full year profit but said recent weaker economic forecasts were likely to have an impact on its markets.

On Monday, Markit/Cips data showed surprise growth in the manufacturing sector.

Money would also be offered to the Scottish and Welsh administrations, which will choose [...]]]> Money to extend a council tax freeze in England to 2012-13 has been unveiled by Chancellor George Osborne.The government cannot force councils to freeze bills but it is offering to give those that limit spending rises to 2.5% the money they need.

Money would also be offered to the Scottish and Welsh administrations, which will choose how it is spent.

The £805 million move will be funded by efficiency savings but Labour said it would save people just £72 a year.

A similar pledge was included in the coalition agreement and resulted in all local authorities in England freezing or reducing their council tax bills in 2011-12.

Scotland will get an extra £67.5 million in its block grant but ministers are still deciding how to spend it. The SNP has already pledged to freeze council tax for five years.

The chancellor is under pressure to spell out detailed plans to get the UK economy growing again amid mounting criticism from Labour and senior figures in his own party.

The government had “activist” policies on dealing with the deficit, keeping interest rates low and cutting corporate taxes and more investment in apprenticeships, he said.

It is not unusual for some to spend less than expected and this time the chancellor will seize the money to ease household bills.

The key point from the Treasury’s point of view is that this does not change the overall spending plans or the deficit reduction strategy.

He cited the increase in time an employee has to work before they can claim unfair dismissal as an example of how the government will lift the burden on business.

With business groups calling for further help, Mr Osborne said his corporation tax cut from 28% to 23% – announced in March’s Budget – was a “real sign of our commitment to getting business growing.”

The bulk of Mr Osborne’s plans will not be announced until November in the second phase of the government’s growth review.

However, the [...]]]> The number of properties sold in the UK fell to 78,000 in August, figures from the official tax authority show.This was 6,000 fewer sales than in July – which had seen the highest total for a year – although a drop is often recorded in August during what is traditionally a quieter holiday month.

However, the figure was down 3,000 compared with August 2010, HM Revenue and Customs (HMRC) said.

At the height of the property boom in July 2007, 151,000 homes were sold.

Since 2007, sales have been weighed down by the continued rationing of mortgages and the reluctance of sellers to drop their asking prices.

Separate figures published by the Council of Mortgage Lenders (CML) showed that UK mortgage lending rose by 6% in August compared with July.

Gross mortgage lending stood at £13.4bn in August, up 10% on the same month a year ago. The CML said that the overall picture for mortgage lending was subdued, but stable.

Stripping these charges out, the company made [...]]]> Barratt Developments, the country’s largest homebuilder, says it has had its best result in three years helped by a rise in average selling prices.It reported a pre-tax loss of £11.5 million for the year to June, including £54.2 million of exceptional charges relating to financing and reorganisation.

Stripping these charges out, the company made an underlying profit of £42.7 million for the year to June.

Its average selling price rose 2.3% to £178,300.

Barratt said it expected to make further progress in a tight UK housing market.

The company’s chief executive, Mark Clare, said: “This has been a further year of recovery for the group.

“We have made considerable progress in rebuilding profitability – by optimising selling prices, improving operational efficiency and securing new higher margin land.”

The company said the mortgage market was holding back demand for newly built properties, saying that there was a limited number of lenders and that borrowers were typically being asked for a 20% deposit, rather than a 10% deposit for older properties.

It said the outlook for the housing market remained challenging, particularly outside London and the south east of England.

Redrow posted a pre-tax profit of £25.3m in the 12 months to the end of June, compared with £700,000 [...]]]> House builder Redrow Plc has reported a better than expected annual pre-tax profit, on the back of a 12% rise in its house sale prices.But the Ewloe-based firm warned the outlook for the property market was challenging.

Redrow posted a pre-tax profit of £25.3m in the 12 months to the end of June, compared with £700,000 for the same period last year.

Redrow said its average house price was up from £154,800 last year to £174,100.

Redrow, run by its founder Steve Morgan who returned to the group more than two years ago at the bottom of the property crash, said the market remained uncertain as sales rates were flat year-on-year.

“The nature of our land acquisitions over recent times will continue to drive the average selling price in an upwards direction,” said Mr Morgan, who also chairs Premier League football club Wolverhampton Wanderers.

He added that the company delivered a robust performance “in spite of the difficulties facing the home-building industry”.

Redrow said the improvements were driven by strong sales of its New Heritage Collection, a range of two to four-bedroom houses launched in February 2010.

These homes made up 41% of total sales in the second half of the year for the firm.

Redrow’s pre-tax profit of £700,000 last year came a year after the company made a pre-tax loss of £44.2m.

The company is one of the UK’s largest house builders.

It was founded in 1974 when it was a small civil engineering concern specialising in drainage sub-contracting.

The firm moved into house building in the 1980s.

It is the lowest reading since the construction sector returned to growth [...]]]> Growth in the UK building sector slowed further in August  while the housing sector shrank again, builders suggests.The Markit/Cips Construction PMI index – based on a monthly survey of building firms – fell to 52.6, from 53.5 in July. Levels above 50 indicate growth.

It is the lowest reading since the construction sector returned to growth eight months ago, and comes amid worries of a renewed recession.

Meanwhile, separate data showed a sharp fall in new construction orders.

New orders in the second quarter dropped 16.3% versus the first three months of the year, according to the Office for National Statistics (ONS).

This brings the total volume of new orders below the trough registered during the 2008-09 recession, to its lowest level since 1980.

The drop in business appeared to have been driven by government cuts.

Public sector housing and non-housing orders both dropped over 30% from the previous quarter, the ONS data showed, while infrastructure spending was down by a quarter.

The ONS new orders data is typically volatile, showing big swings from one quarter to another.

However, the latest drop is unusually large, and the level of new orders has consistently remained about a quarter below pre-recession levels since 2008.
‘Reality bites’

The two sets of data will fuel worries that the UK – and global – economy may be dipping back into recession.

Equivalent PMI surveys for the manufacturing sector released on Thursday suggested that factory activity in the UK and other major economies shrank in August.

The latest UK construction sector PMI pointed to a continuing downturn in new orders, with respondents reporting that competition among firms was becoming tougher.

Meanwhile input cost rises accelerated in the month – blamed on higher fuel and raw material prices – putting further pressure on profit margins.

With confidence reported to be at an eight-month low, firms said they continued to cut back on employment and sub-contractor usage.

“Reality is continuing to bite in the UK construction sector, as worries over wider economic conditions contribute to a slower rate of output growth,” said David Noble, chief economist at the Chartered Institute of Purchasing and Supply, which commissions the surveys.

“Though overall activity is still in growth territory, there may be some questions about whether this will continue for much longer.”

But while activity in the housing sector continued to shrink, and in civil engineering slowed sharply, there was a small pick-up seen in commercial construction, the survey found.

The total was also 3,000 down on the [...]]]> Property sales in the UK remained at a relatively quiet level in May and lower than the same month a year ago, new figures show.
Some 68,000 homes were sold in May, down 2,000 on the revised total of a month earlier, according to HM Revenue and Customs data.

The total was also 3,000 down on the same month a year ago.

Lenders say there is little chance of a rebound in the coming months, judging by mortgage data.

The Council of Mortgage Lenders said on Monday that it expected lending for home loans to be “relatively flat” during the coming months.

This view came despite gross mortgage lending in the UK rising by 12% in May, compared with April, to £11.3bn. The figure was 1% higher than in May 2010.

This means the proportion of cash buyers has more than doubled [...]]]> There has been a huge rise in the proportion of home buyers paying for their new homes in cash.
Figures compiled by the Council of Mortgage Lenders (CML) show that in January 2011, nearly 40% of buyers did not need a loan to buy their home.

This means the proportion of cash buyers has more than doubled since 2005, when the records began.

This in turn suggests the market is increasingly the domain of the cash-rich, with many other buyers shut out.

Cash buyers are investing in property because they see it as one of the few investments which they can make money from and use at the same time.

The CML estimates the total number of cash buyers in the market and compares its own lending figures with those from HM Revenue and Customs (HMRC), which records the total number of house sales over the same period.

This analysis shows that the total number of cash deals has been rising sharply since 2005.

As lenders have tightened their loan criteria and asked for bigger deposits from borrowers, cash buyers have become an increasingly big force in the market.

In April 2005, when the figures begin, 16,457 homes were sold to cash buyers, equivalent to 15% of the market.

In January 2011, the latest figure, there were 27,600 cash transactions, equivalent to nearly 40% of the market.

It cites the new First Buy scheme, under which the government and house builders offer loans to help first-time buyers purchase newly built homes.

However, conflicting demands on lenders mean those looking to borrow to get on to the housing ladder are unlikely to see a significantly easing in credit conditions soon.

There may be calls for increased mortgage availability, but at the same time, regulators are calling on lenders to hold more capital and be more risk-averse.

The difficulty many find in getting on the housing ladder could cause a sea change in the way Britons view home ownership.

The proportion of people owning and actually living in their properties has been steadily falling, having peaked at 71% in 2004 and fallen back to 67% last year.

Industry activity registered a level of 56.4 for March, well above the expected 54.9. A level above [...]]]> The UK building industry continued to grow in March, but raw materials price rises hit a 31 month high new research shows.
Rising costs were driven by fuel, oil and steel, the Purchasing Managers Index (PMI) for the sector said.

Industry activity registered a level of 56.4 for March, well above the expected 54.9. A level above 50 indicates expansion.

However, the survey also suggested that new order growth had slowed.

Anecdotal evidence also suggested industry members remain concerned about the likely impact of government spending cuts on future business.

Despite this, the employment in the cyclical industry appears to have bottomed out.

The survey found the rate of reduction of staffing levels had fallen to its slowest rate since job cuts in the sector began nine months ago.

It found the biggest shortfall would be in London, the South East of England, the [...]]]> England is facing a “growing housing crisis”, according to a report which estimates a shortfall of 750,000 homes by 2025.
The country needs to build more homes even if the economy continues to stall, the Institute for Public Policy Research (IPPR) concludes.

It found the biggest shortfall would be in London, the South East of England, the East, and Yorkshire and Humberside.

Only in the North West of England could supply meet demand, it said.

The think tank studied a number of different economic scenarios, and how this would affect the housing stock.

A faltering economy would still lead to demand for more than 200,000 homes a year, it concluded. There was a need for 280,000 more homes a year needed if the economy bounced back strongly.

Using the government’s projection for household numbers would lead to a shortfall of 750,000 homes by 2025, it found.

On a regional basis the biggest effect would be in London, with a housing gap of 325,000 homes, followed by Yorkshire and Humberside with 151,000 homes too few.
The predictions by region are:

* London: 325,000
* Yorkshire and Humberside: 151,000
* East of England: 132,000
* South East of England: 77,000
* East Midlands: 66,000
* West Midlands: 28,000
* North East of England: 16,000
* South West of England: 7,000

Such a shortfall of homes would inevitably have a effect on house prices.

The report said that only in the North West would there be more homes than households.

A spokeswoman for the Department for Communities and Local Government, said: “The government has introduced a wide package of reforms designed to boost housebuilding, including reform to the planning system.

Bovis, which expects to open 33 sales outlets in 2011, said customer reservations had risen 11% in the first nine [...]]]> Profits at Bovis Homes more than doubled last year and the firm said it had had an “encouraging” start to 2011.
The housebuilder saw pre-tax profits rise from £7.5m to £18.5m, on revenues up 6% to £298.6m.

Bovis, which expects to open 33 sales outlets in 2011, said customer reservations had risen 11% in the first nine weeks of this year.

Chief executive David Ritchie said 2010 was a year of “strong improvement”, and so Bovis had resumed dividend payments.

Economic and consumer surveys have suggested that the housing market’s spring selling has been slightly stronger than expected.

However, economists are still predicting that 2011 will be a difficult year as unemployment rises and a squeeze on household spending continues.

Nevertheless, Mr Ritchie said: “The group has also made significant progress with its growth strategy through substantial land investment, a strong pipeline of further land acquisition opportunities and a strong expected increase in active sales outlets.

“Based on a continuation of current market conditions, this growth strategy gives the group confidence in delivering greater volumes and increased profits,” he said.

The dividend has been resumed at 3 pence.

The CML said the fall was larger than expected at the time of year and due to an “unusual [...]]]> The number of new mortgages lent to house buyers slumped by 29% in January compared to December, the Council of Mortgage Lenders (CML) said.
At just 28,500 the figure was also 12% lower than in January last year.

The CML said the fall was larger than expected at the time of year and due to an “unusual combination of factors”.

The figures suggest the property market may be heading for a new downturn in activity due to mortgage rationing and the uncertain state of the economy.

“With the effects of last year’s government spending cuts beginning to bite, and rising inflation and tax measures putting pressure on household budgets, potential house-buyers are likely to have been discouraged,” the CML said.

“This, coupled with December’s extreme winter weather, and uncertainty over future interest rate rises, has led to a lack of movement in the mortgage market.”

January’s fall in mortgage lending, which the CML admitted was “substantial”, takes lending back to its difficult position seen in the first few months of 2009, in the immediate aftermath of the international banking crisis.

Compared to earlier in the decade, the latest figures are a massive drop.

For instance, in January 2003, 90,300 new mortgages were agreed with home buyers.

For the few first-time buyers able to agree new mortgages – just 10,500 in January this year – borrowing requirements eased slightly.

The average deposit they had to put down fell to 20%, the lowest level of downpayment for more than two years.

Figures show a downward trend in first time buyer numbers throughout 2010.

There was a [...]]]> New research has found that 23% of people who planned to buy a property in the coming year will be first time buyers.Generally, it is thought that double this proportion of first time buyers is a sign of a healthy housing market.

Figures show a downward trend in first time buyer numbers throughout 2010.

There was a sharp fall at the end of the year, according to the British Bankers’ Association (BBA), although this was skewed by the rush to beat the end of the stamp duty holiday at the end of 2009.

First time buyers are regarded as crucial to any housing revival, but many have only been able to get onto the ladder with financial assistance from relatives.

Some 84% of those aged under 30 required such assistance, the Council of Mortgage Lenders (CML) said.

The average deposit required when buying a property was 23% in December, according to the BBA, up from 21% the previous month.

This has been partly the result of strict lending criteria from mortgage providers – including turning down potential borrowers with any blot on their credit history.

The firm, which has shifted away from building flats to two-storey houses, said it had managed to push [...]]]> Housebuilder Bellway saw a jump in sales in January, and forecast continued recovery as long as there were no shocks to the UK economy. Bellway said that the average price of its homes rose 8% to £168,000

The firm, which has shifted away from building flats to two-storey houses, said it had managed to push through an 8% rise in its average sale price.

“The early signs that we’ve had in January are encouraging,” said Bellway finance director Alistair Leitch.

But he warned against reading too much into one month’s figures.

Nevertheless, he believes the momentum will continue into the all-important spring buying season so long as nothing “untoward” happens to the economy.

A positive start to the year will come as a relief to the sector after a weak autumn and bad weather in December.

In a trading statement, Bellway said that it completed 3.8% more sales in the half-year to 31 January, at 2,332 homes, and said average selling prices rose to £168,000.

The company said: “Whilst site visitors and reservations were obviously hampered by the cold weather in December, the number of visitors and subsequent reservations since the beginning of January has been encouraging.

“However, four weeks is too short a time to consider revising our forecast for the full year,” the company said.

Bellway also increased its land-buying programme during the six months, spending about £130m, compared with £76m for the same period in 2009.

There were 42,563 approvals, showing a relatively sudden dip of nearly 5,000 from the [...]]]> The Bank of England said the number of mortgages approved for house purchases showed a sudden dip in December.
The Bank of England said that the number of mortgages approved for house purchases in December fell to its lowest level since March 2009.

There were 42,563 approvals, showing a relatively sudden dip of nearly 5,000 from the previous month and a similar fall compared with the average of the previous six months.Dip in house prices and mortgages

Figures in the coming months will indicate whether this is the start of a renewed and sustained fall in the mortgage market.

However, the lack of activity shown in December’s figures could put further downward pressure on house prices.

With mortgage finance remaining thin on the ground for everyone but those with large deposits- ie those people with large cash sums- who are equity rich, many hoping to take advantage of a property market whilst it is in the doldrums are simply be unable to do so.

England’s planning system is being turned on its head with an unprecedented amount of power being transferred to communities. It has [...]]]> Nimbyism is stopping many new housing developments on the drawing boards.
The idea is that instead of Whitehall bureaucrats deciding what gets built, local communities should have the freedom to decide what their area looks like.

England’s planning system is being turned on its head with an unprecedented amount of power being transferred to communities. It has huge implications for housebuilding.

But the big question is – if you leave it up to locals to decide on the often thorny issue of development, will enough homes get built and, crucially, in the right places?

Under the old system, regions were set housebuilding targets on what they had to build for in the next two decades. Labour said three million new homes were needed by 2020.

But the coalition government said these targets did not work and immediately swept them away.

It is fair to say these targets were never terribly popular among many local authorities.

Since May, many of them have had a rethink and are scaling back on developments. The reductions have been dramatic.

So far, 44,510 planned homes have been ditched by the four local authorities that make up the greater Bristol area. That’s a third of the entire total they had been told to plan for.

In fact, according to the national planning consultancy, Tetlow King, just over 200,000 planned homes in many parts of England are no longer going ahead.

The worry is that localism will end up as a Nimby’s charter, with local authorities shrugging off their housebuilding responsibilities.

At the heart of the government’s new approach is a cash bonus to councils to financially reward those councils and communities that deliver new homes and businesses to their area.

It amounts to equivalent of six years’ worth of council tax for every new home built.

But for every opponent of development, there is someone crying out for somewhere to live. Resolving the tensions between those who have homes and those who do not has never been easy.

The coalition government is setting out on a radical new path. These planning reforms are being billed as the building blocks of the Big Society, so that local people can shape their own towns and cities.

“We need to take action to get Britain building again,” says Housing Minister Grant Shapps. “Years of centrally imposed, top-down targets pitched developers against communities, with councils caught in the crossfire, and last year, housebuilding fell to its lowest level for any peacetime year since 1924.

“That’s why we’ve set aside almost £1bn for a New Homes Bonus, which will ensure that those communities going for growth reap the benefits of development not just the cost. Councils who build more homes will start benefiting immediately from extra cash, which they can use to improve their local area.”

Re-Mortgager wonders quite how the 250,000 new homes that the country needs building every year will be built, given that there is a property price recession and new untested planning laws that pander towards inertia and inactivity.