We reported last week that there has been some good news when it comes to the housing market as it looks like in 2013 it may start to pick up again. The increase in demand for housing and the introduction of cheaper mortgages means that it may be possible for house prices to bounce back. And to make things even better, it has been announced today that housebuilding companies are actually beginning to invest in the market again, which will increase property values, create more jobs, and eventually boost the UK economy.
The housebuilding company Crest Nicholson has floated five hundred million pounds for new houses to be built, which is the first significant public offering in the industry for almost a decade, and it is expected that retirement builder McCarthy & Stone will also be looking to re-enter the market soon. This will come as good news to buy-to-let landlords, as an increase in new housing may mean that they can expand their portfolios and answer to increasing demand. However, landlords also need to be wary as the government is trying to help the public – especially young people – move away from renting properties and buying them instead.
If the private rent sector does take a hit from the introduction of new houses that are for buying purposes only, it is important that landlords invest in landlord insurance to help them if they find themselves with unoccupied properties. However, even though the government is introducing schemes such as NewBuy and FirstBuy which help members of the public move onto the property ladder, many people are saying that even with new houses being built the market may not change for a very long time.
Barrat Developments’ chief executive Mark Clare warned: “The risk is that we continue to see very low production volumes and increasing demand, which would lead to upward pricing pressure. At the moment the housebuilding industry is around 40 per cent down on where it was. It took a very substantial step down and there is a limit to how far we can grow. It could be 2020 before the industry is back to where it was. That is where the risk is.”