UK base rate kept at 0.5% again

UK house valuations increase by +61% in February

Urban Living announces £17m regeneration programme

UK commercial property values increase by +1.4% in February

New planning bill branded a waste of time

UK pensioners own £765.18bn worth of property

The Bank of England has held its base rate at 0.5% for the 12th consecutive month and announced that there will be no changes made to the Quantitative Easing (QE) programme as concerns have arisen about the persistence of above-target inflation in the medium term.

James Thomas, head of residential development and investment at Jones Lang LaSalle, told PIN: “The base rate will stay as it is until the end of the year, as uncertainty in the UK and global economy will continue and as the looming general election also causes uncertainty in the short term, whilst its effects will not be seen until after the election, before it gradually rises in 2011 as the results of the quantitative easing will create a dose of inflation.

“Banks have been cautious as they try to reduce their loan books. In the last 12-18 months, lenders have increased their rates due to the risk in the market, but recently have become more accommodating as they look to attract more borrowers particularly those seeking to purchase new build flats as opposed to second hand properties.”

UK house valuations increase by +61% in February

Residential housing valuations increased by +61% in February 2010 compared to January, as the housing market picked up after being subdued the previous month, according to Connells.

Activity has now grown year-on-year for six months in a row, with the number of valuations up +22% in February 2010 on the year before. The increased activity has been attributed to first-time buyers as there was an increase of 63% requesting a valuation compared to January 2010, with the numbers above those seen in February 2009. Valuations conducted for current home owners looking to move also increase by +43% on January.

Ross Bowen, managing director of Connells, said: “Traditionally, the valuations market begins to see a boost in activity in January following the Christmas lull. January witnessed a hangover from re-instating the lower stamp duty threshold while the arctic weather conditions disrupted some buying activity. However, February saw house-hunters back on to the streets in force, with activity bouncing back as a result.

“In January, we saw first-time buyer activity drop off slightly compared to December. Many first-timers had rushed to make their transactions before stamp duty holiday ended. In February, demand bounced back. Homeowners have seen their properties reclaim much of the value lost during the downturn. Many who previously delayed see now as the right time to move properties.”

Remortgaging and buy-to-let activity also increased as valuations for buy-to-let investors went up +81% and remortgaging levels doubled in comparison with January 2010, although this was from a low base. With mortgage finance conditions still proving problematic, remortgaging valuations were less than -30% their level in February 2008, whilst buy-to-let was -30% lower.

Urban Living announces £17m regeneration programme

A £17m regeneration programme has been announced for the Birmingham and Sandwell region and is to be completed in the next 12 months by Urban Living, the Housing Market Renewal Pathfinder for the area.

The funds will be used to further develop projects that will focus on the provision of more affordable housing and support mixed communities.

Adnan Saif, chief executive of Urban Living, said: "Over the last year, we've made significant progress and have succeeded in delivering a targeted programme of regeneration activity which has seen almost £20m invested in the Birmingham and Sandwell area.

"We have already approved projects worth at least £17m for delivery in 2010/2011 and our aim is to make a real impact by blending community engagement and cohesion with neighbourhood renewal and regeneration."

Sites that have already been cleared for future redevelopment like Crocodile Works in Newtown and The Lyng Estate in West Bromwich, where work is underway to develop around 600 new much-needed homes, have been included by Urban Living along with the continuation of its refurbishment programme to bring homes back into use. An allocation of £500,000 has also been assigned to community cohesion projects.

Saif said: "Effective regeneration cannot happen without the full engagement of the communities and people involved. By involving people in the development and delivery of plans for their neighbourhoods, you create a sense of belonging and shared civic pride. That's why we're putting a continued emphasis on its importance and encouraging people to get involved in transforming their neighbourhoods."

In North West Birmingham activities will centre on the revitalisation of Newtown and Lozells whilst in Sandwell the programme will see the completion of the Windmill Eye masterplan and the construction of new homes in Greets Green and Eastern Gateway.

UK commercial property values increase by +1.4% in February

Commercial property values in the UK grew by +1.4% in February 2010 after a slower than expected start to 2010 in January when they only increased by +0.9%, according to CB Richard Ellis (CBRE).

All-property returns were 2% in February giving annual returns of 13.6%, however rental values fell by -0.2% and yields by -0.1%.

Nick Parker, economics and forecasting analyst at CBRE, said: “The general sentiment in the market currently is that property is approaching fair value, with ongoing yield compression expected in the short term. Whilst it was prime yields that came back in most aggressively in the latter half of last year, it is the better secondary markets that are slowly starting to attract interest at the beginning of 2010, with investors beginning to look further up the risk curve in a hunt for better returns. It is widely expected that the yield gap between prime and secondary property will slowly narrow over 2010 as competition for good secondary assets becomes more heated.”

In February, central London offices were the best performers again giving total returns of 2.6% and capital growth of 2.1%. Shopping centres also performed strongly producing a total return of 2.4% with capital growth of 1.8% as, according to CBRE, they are finally catching up after a very weak 2009.

New planning bill branded a waste of time

A Parliamentary Private Members Bill by Andrew Dismore MP has been branded as both a waste of Parliamentary time and a demonstration of the lack of understanding of housing issues by some MPs by the Home Builders Federation (HBF).

The Bill requests that under the planning system ‘special regard shall be had to the desirability of preserving gardens and urban green spaces’, however these powers are already available under the existing planning rules to the every single Local Authority (LA) and they are allowed to take into account any consideration they feel necessary when assessing a planning application and setting policy.

Andrew Whitaker, planning director at the HBF, said; “It is extremely disappointing that at a time when we have an increasing housing supply crisis a MP would devote valuable parliamentary time to promoting a Bill which is both unnecessary and will do nothing to help those needing homes. MPs should be exploring why house-building has dropped to the lowest level since World War II at a time when almost two million families are registered on LA housing waiting lists.

“Addressing how we supply enough land on which to build the homes we desperately need, and the chronic shortage of mortgage availability, would be a far better use of legislative and parliamentary time that could result in huge social and economic benefit. When scoring opportunities are in short supply it is vital to shoot at the right target.”

The proposed Bill therefore misses the point that the UK has a major housing shortage with insufficient homes being built the HBF has stated, with many people struggling to enter the housing market with the waiting list for affordable homes approaching five million.

The important role that properly adopted local plans can play in ensuring back garden development is managed to ensure outcomes that meet and balance local needs was highlighted in research published by the Department for Communities and Local Government in January 2010.

John Healey, housing minister, said, “Councils already have the tools they need to deal with this issue.”

UK pensioners own £765.18bn worth of property

Retired homeowners in the UK own outright property worth £765.18bn, with a third of it located in the South East and London, according to research from Key Retirement Solutions.

Over-65s in the South East own property worth £123.44bn compared with £122.65bn held in London, all without any mortgages. However, property wealth is spread throughout the UK, with retired homeowners in the South West owning 15% of the total housing equity stock at a total value of £115.64bn.

Dean Mirfin, business development director at Key Retirement Solutions, said: “The housing market has been through a tough time and there are still doubts over the strength of the recovery.

“However it is undeniable that the over-65s own considerable property wealth outright which represents a massive investment success as many of them will have bought their homes more than 20 years ago.

“The property wealth owned outright by pensioners represents a potential source of income for the over-65s particularly when other sources of retirement income are under pressure from low interest rates and annuity rates.”

PIN’s latest mortgage recap