The latest data figures from the DCLG on Affordable Housing supply April 2015 to March 2016 published yesterday, show that the number of affordable homes built in England in 2015/16 has fallen to its lowest level for 24 years. In total, just 32,110 new affordable homes were added – a 52% decline on the previous twelve months (66,600).
Figures for affordable housing are split into three catagories: social rent, affordable rent and affordable home ownership/shared ownership.
The DCLG figures showed the number of new homes for ‘social rent’ fell to just 6,550 – 83% lower than the 39,500 built in 2010/11. The number of homes for private rental at ‘affordable rent’ has now fallen 41% from a peak of 40,730 in 2014/15 to 16,550 in 2015/16. The total constructed for ‘affordable home ownership’ has also dropped 21% from 15,970 to only 3,430 over the same period.Labour housing spokesman John Healey said:
“The figures showed the government was building the lowest number of social rented homes since records began. This all-time low results from Conservative ministers who have washed their hands of any responsibility to build the homes families on ordinary incomes need. We’ve seen six wasted years with the Tories in charge of housing. They have no long-term plan for housing and they’re doing too little to fix the housing crisis for millions of people who are just managing to cover their housing costs.”
Caught in a trap – Leasehold new houses
Given the information, no new homebuyer would ever choose to buy a house with a leasehold title. Perhaps this is why some housebuilders hide this extremely important information from new homebuyers. Even if they do think to ask about the property title, it’s no good saying “People are scared of change because it’s something new. But it’s virtually freehold.” As a Persimmon sales advisor told a reporter from The Guardian.
Is it Freehold? New homebuyers are getting caught out by newly-built leasehold houses.
Justin Madders MP for Ellesmere Port and Neston, is calling for a ban on leasehold new houses:
“It is clear this system is being abused to drive huge profits at ordinary homeowners’ expense. There is no need for there to be leasehold properties, particularly those on an estate where the properties are mainly detached houses.
“They need to be banned – it may be a convenient way for developers to get extra profit from their building work, but once they get in the hands of these private equity companies the profit motive overrides any considerations that there are real people living in their homes, who are being asked to stump up eye-watering sums.”
As Patrick Collinson reported in The Guardian on Saturday 29 October 2016, a new house built by Taylor Wimpey in Ellesmere Port was sold for £155,000 on a 999-year lease in 2009. Seven years later, the owner was quoted £32,000 to buy the freehold from E&J estates who had bought the freeholds from Taylor Wimpey. Another buyer was quoted up to £40,000 by E&J estates for the freehold of their 2011, 4-bedroom £122,000 house and despite a long lease, another new homebuyer in Manchester is was forced to pay £38,000 to buy the freehold on their recently built home.
Escalating ground rent is another issue. Taylor Wimpey set the ground rent at £295 a year on the Ellesmere Port development, with the contract stating that ground rent will double every ten years!
Prefab Sprout! Flat pack new homes – no Allen keys required! But will prefabs be the answer to Britain’s housing crisis?
As reported in The Telegraph last Saturday, the government is to embark on a building programme to “embrace the first new generation of pre-packed homes since the reconstruction after the Second World War.” By using prefabricated homes that can be delivered to site and built [thrown up] in 48 hours. While the Department for Communities and Local Government [DCLG] is not expected to set a hard target, (one lesson learned at least!) government sources said it was hoped that more than 100,000 prefabs could be built by May 2020 – around 2,500 a month. Theresa May’s Government is struggling to work out how to meet a commitment to build “a million new homes by 2020”.
Clearly the large housebuilders, supported in every respect by this and previous government policy, have failed to deliver any meaningful and desired increase in production – even now, they are building fewer new homes than were built in 2007. Profiteering from landbanking? – Channel 4 Dispatches ‘Britain’s Homebuilding Scandal’ due to be aired on Monday 7 November 2016 will no doubt highlight this.
The BBC Radio 4 ‘You and Yours’ programme on 26 October 2016, was a great opportunity to further promote the setting up of a government-appointed New Homes Ombudsman and the implementation of the other nine APPG report recommendations. This is necessary because as the APPG Inquiry discovered, both housebuilders and warranty providers are failing new homebuyers despite a record £81million being spent on claims under the NHBC warranty to April 2015. It was disappointing that this Petition to Government was not mentioned.
The recent repeat of a BBC TV documentary, “Inside the Commons” – showed how government works and without a parliamentary debate, the APPG recommendations are very unlikely to be implemented anytime soon. Individual MPs, even if they are successful in the Private Member’s Bill ballot, rarely see their bill become law.
This You and Yours broadcast on BBC Radio 4 featured the ubiquitous new home buying “victim” selected to tell their ‘tale of woe’ with possible practical solutions to the widespread problems the industry is causing, overlooked or touched on very briefly. The programme gave housebuilder David Wilson Homes the opportunity to issue the usual insincere housebuilder statement:- “rare isolated incidence – we are truly sorry – working with the homeowner to remedy as soon as possible”
Buyer beware: The great leasehold new house scam
When will the incessant greed of housebuilders reach its zenith? Not content with charging premium house prices, large plc housebuilders keep coming up with new ways to squeeze every last drop of additional profit from unsuspecting new homebuyers. It started with overpriced optional extras and upgrades. Then shared driveways and non-existent front gardens enabled housebuilders to cram in even more homes on their developments. Next came the Freehold house with Leasehold type management charges – inescapable “annual rentcharges for maintenance of communal amenities on the development”, commonly around £200 a year for each home, normally for ‘maintaining’ landscaped areas.
Also becoming increasingly common, are charges for private roads, footpaths and street lighting on developments. These charges are even more galling when builders fail to fully-complete these areas for months, sometimes years after the last house was built and sold.
The website Home Owners Rights Network has been set up to fight the unfairness of these charges and campaign for a change in the law. The Leasehold Knowledge Partnership was set up to protect ordinary leaseholders.
Now some housebuilders have taken fleecing buyers to a whole new level. Selling Leasehold new houses, but at Freehold prices. There can be no other reason for this other than to increase their bottom line. As the Daily Mail reported in May 2015, two new housing estates were being built in on either side of London Road in Peterborough. At the time, Persimmon were building 50 new homes at “The Edge” on the east side, selling three bedroom homes for £158,995 – £180,000. On the other side of the road at “The Sycamores” Barratt were building 80 new homes, almost identical in appearance, with a three-bedroom property costing from £163,995.
The first Annual Report by the Consumer Code for Home Builders since April 2014, was finally published this month.
In May 2014, I asked the question, Is the Consumer Code for Home Builders (CCHB) fit for purpose? In March this year I wrote that the Consumer Code for Home Builders is failing new homebuyers. This voluntary code was launched in April 2010 and has been inadequate and failing new homebuyers ever since.
In July, a report published by the APPG Inquiry Into Quality of New Homes found that:
- “The Code [Consumer Code for Home Builders] does not appear to give homebuyers the safeguards we think they should expect.
- It does not appear to us objectively to offer consumers a wholly satisfactory form of redress.
- The Consumer Code for Homebuilders is limited in its scope.”
APPG Inquiry recognises a government-appointed New Homes Ombudsman should be set up.
The APPG Inquiry “Key recommendation” is the setting up of a government-appointed New Homes Ombudsman. It said that the Ombudsman: “would need to be completely independent and replace the dispute resolution service offered as part of the Consumer Code for Home Builders.”
With greater protection for those that buy them!
The only way the housebuilding industry will change for the better, is if enough people sign this petition. This Government is pre occupied with its blinkered approach to increasing quantity of new homes being built, throwing billions of taxpayer’s money at housebuilders in the process. Just last week another £5bn was earmarked for an industry that cares so little for its own customers and the quality of the product they sell.
An all party group of MPs had an Inquiry last year Into the Quality of New Homes. The Inquiry Report made ten recommendations, including the number one “key recommendation” the setting up of a New Homes Ombudsman. All of the recommendation have the potential to not only force housebuilders to improve the quality of the homes they build, but also give those that buy new homes better protection via access to a New Homes Ombudsman.We have been here before with the Barker Review of 2004, Office of Fair Trading Market Study of Home Building in the UK October 2008, and now more recently the APPG Inquiry 2016. Yet surprisingly, there has not been any legislation to force this failing industry to improve.
In February 2016, the government asked the Construction Leadership Council (CLC) to look at the labour model within the construction industry and the pressures on skills and other constraints that limit housebuilding and infrastructure development in the UK. The CLC commissioned Mark Farmer to undertake a review and his report, The Farmer Review of the UK Construction Labour Model was published on 17 October 2016.
The independent Farmer Review, commissioned by two Government departments, highlights construction’s dysfunctional training model, its lack of innovation and collaboration as well as its non-existent research and development (R&D) culture. Farmer says the construction sector must “modernise or die” and faces “inexorable decline” unless radical steps are taken to address its longstanding problems.
It has been over seven months since Taylor Wimpey released its results for the full year to 31 December 2015 (1 March 2016). This included a statement from Chief Executive Peter Redfern, which recognised improvement was needed with regard to his company’s poor customer satisfaction levels. Perhaps it is time to take stock and conduct our own ‘Redfern Review’.
Peter Redfern said:
“During 2015, we achieved a customer satisfaction score of 86% (2014: 87%). We are disappointed that this has slipped. Whilst we operate in a cyclical market, we strongly believe that a customer centric approach is needed throughout the cycle. During 2015 we completed an in-depth review of every aspect and stage of our Customer Journey, to identify areas of improvement and to deliver a better homebuying experience for our customers. Throughout the review, our focus has been on understanding our customers’ priorities to enable us to deliver at and ahead of expectations. We have also commenced the process of rolling out our new customer approach across the business with a focus on three main areas: our culture, management structure and process. This is to ensure that going forward we deliver the right product, supported by excellent customer service to all our customers at every stage of their journey with Taylor Wimpey.
Yet more funding for housebuilders! Whatever became of austerity, “there’s no money left” and “balancing the budget by 2020”? So is the country now awash with spare cash? Of course not. According to the national debt clock, the UK is borrowing another £5,170 per SECOND or £1.86m an hour! The National debt is currently £1,762,340,000,000 (1.76trn), this equates to £28,291 for every person living in the UK or £48,600 for each UK taxpayer! So I find it totally incomprehensible that another £5bn is being added, to further and unnecessarily subsidise private housebuilding under the guise of increasing the number of new homes built.We have already had the ‘The Osborne Stupidity’ – ‘Help to Buy’ fuelling house prices and housebuilders’ record profits. Now we have the ‘The May Lunacy’ ‘Help to Build’, yet more funding for housebuilders. Last week the Theresa May’s government announced two major housing initiatives; a £3bn Home Building Fund – £2bn long term funding for infrastructure and £1bn short term loan funding aimed towards enabling smaller developers enter the market. As is often the case with government announcements of supposedly “new funds” £1.2bn of the £3bn was previously announced as the Large Sites Infrastructure Fund in 2015. In addition, a new £2bn “Accelerated Construction Programme” aiming at getting new homes built more quickly on public land.