The housing market in Newcastle and the North East is never far from the news. Smartmove, Newcastle’s best removal company, compiles the best of the news in April 2021.
House price growth wipes out Stamp Duty saving
Homeowners warned that the house price boom will see them £10k worse off reports Anna Cottrell of “Ideal Homes“
Research by Newcastle-based property developer, StripeHomes, has found that a hot housing market driven by the stamp duty holiday has seen the saving on offer wiped out by house price increases in all but two major cities.
StripeHomes analysed house price growth since the introduction of the stamp duty holiday in July of last year across 18 major cities in England and how this compares with the saving on offer via the tax reprieve.
The research shows that back in July, the average house price in England average £253,441 meaning the stamp duty saved would have equated to £2,672. Today, the average house price across England sits at £266,532, an increase of £13,091. While homebuyers are still saving £3,327 in stamp duty due to the extended holiday deadline, it means they are paying £9,764 more to get on the ladder when compared to July last year.
The simple truth is that it is considerably more expensive to buy a home this year than it was last year, even without any stamp duty payable. Oxford homebuyers are even worse off than the national average. Since the introduction of the stamp duty holiday, house prices have jumped by £40,972 to £442,448 today. Even with a stamp duty holiday saving of £12,122, homebuyers in the city are still paying £28,849 more on the average purchase.
In Manchester, homebuyers are paying £21,299 more than they were prior to the stamp duty holiday even after taking the current saving into account, while in Sheffield the cost of buying is up £18,700.Other cities where homebuyers are now worse off by more than £10,000 include Leeds (£15,928), Liverpool (£14,596), Bradford (£13,042), Bournemouth (£11,908) and Plymouth (£10,990).
In fact, the research shows buying now is better for homebuyers in just two major cities. In Southampton, house prices have climbed by just £42 since July of last year meaning homebuyers can still save £1,708 in stamp duty. In Cambridge, house prices have fallen by £7,349 since the introduction of the stamp duty holiday, meaning with the addition of a £11,853 tax saving, homebuyers are £19,201 better off buying now.
Managing Director of StripeHomes, James Forrester, said: “Time and time again, we see poorly thought through Government initiatives designed to ‘help’ homebuyers ironically push house prices further out of reach.
“The stamp duty holiday has done just that and while the average homebuyer might feel as though they’ve been given a helping hand with a few thousand pounds saved in tax, it’s nothing but smoke and mirrors by the Government.
“The reality is that they’re far worse off due to the heightened levels of house price growth the initiative has caused and with the holiday now running until September for many, we can expect house prices to continue to climb and many more homebuyers to be priced out of homeownership as a result.”
GreenSquare and Accord Housing Association have merged to create a new 25,000-home housing and care organisation
The partnership came into effect on 1 April, creating a new landlord, GreenSquareAccord, which owns homes spanning from Newcastle upon Tyne to Salisbury, Wiltshire, writes Lucie Heath (Inside Housing)
The landlords first announced they were exploring a potential partnership in February last year.
Former chief executive of GreenSquare, Ruth Cooke, has been appointed the chief executive of the new organisation, while former Accord chair Elisabeth Buggins is chair.
Before merging, Accord was one of the largest housing and social care organisations in the Midlands, managing 13,000 homes and providing care to roughly 80,000 people.
Meanwhile, GreenSquare managed more than 12,000 homes in Wiltshire, Oxfordshire and Gloucestershire.
By merging, the organisation said it aims to improve services for existing customers, invest more in local communities and build more affordable homes with an ambition to develop 1,000 new homes per year.
GreenSquareAccord now has over 100 care and support schemes and will deliver over three million hours of care every year.
It follows a number of other high-profile merger announcements in the sector, including the announcement by PA Housing and Accent Group last week that they were in talks to form a 43,000-home landlord.
In February, Southern Housing and Sanctuary announced they were exploring a potential merger that would see them create the largest housing association in the UK.
Ms Cooke said: “This merger has successfully joined two organisations with the same values and ambitions for expanding and enhancing locally-focused services to customers.
“We now have the scale and capacity to build hundreds more new homes each year, and to increase available resource for investment in our existing homes.
“We will also be able to widen our overall offer to customers by increasing the breadth of our services such as care and support, building for sale, community–led housing and modern methods of construction.
“It is a merger of equals that has created a stronger and more resilient organisation that’s more ‘future-proof’ and ready to deal with future challenges.”
Ms Buggins added: “This merger of equals will create a strong and more resilient organisation which is better equipped to provide great services for people and to innovate as we respond to a changing world.”
Kate Henderson, chief executive at the National Housing Federation, said: “The launch of GreenSquareAccord marks another positive chapter for these strong organisations. I am very much looking forward to working with them as they deliver more affordable homes and innovative solutions to tackling the housing shortage. I wish all involved in the newly merged organisation the very best for their work together.”
Vic Rayner, chief executive of the National Care Forum, said: “We are really pleased that Accord and GreenSquare have merged to form GreenSquareAccord. By creating a larger organisation, with a wider geographical reach, we are delighted that over time more people across the country will be able to benefit from their excellent care and support services.”
New student campus to be built on edge of Newcastle city centre
The 1,390-bed campus will replace former offices near Manors Metro Station following what is thought to be the region’s largest property deal this year, reports Graeme Whitfield for Chronicle Live.
A major property deal will see a redundant office block on the edge of Newcastle city centre turned into a new student campus.
The deal Newcastle-based Adderstone Group and iQ Student Accommodation has paved the way for the 1,390-bed student accommodation development on the site of the former King’s Manor office site, near the Manors Metro Station.
A 272-bed student block was completed on the site in 2018, and Adderstone Group has secured planning permission for a further 1,118 beds on the site.
The funding of the deal from iQ Student – which is backed by world-leading investment group Blackstone – has come despite some people questioning the levels of student accommodation that are needed in the wake of the coronavirus outbreak.
But Adderstone has described the investment as “an enormous vote of confidence in the North East’s lead city” and says it demonstrates Newcastle’s ability to bounce back from the pandemic.
Ian Baggett, founder and CEO of Adderstone Group said: “A world class university city needs world class student accommodation.
“This significant investment represents an enormous vote of confidence in the North East’s lead city and indicates how well placed it is to bounce back from Covid. As always, my colleagues and I are proud to be doing our bit.”
The size of the deal has not been disclosed by either party.
But with one recent study valuing student accommodation beds at least £88,000 each, it is thought that the deal has topped the £100m mark.
The King’s Manor site, which sits directly opposite Northumbria University’s Law and Business School and is also close to Newcastle University’s city centre campus, was developed into offices in the 1980s but has been empty for a number of years.
It is being converted into student accommodation by Adderstone Group, which has completed a number of student housing developments in Newcastle, as well as housing and office projects.
iQ Student Accommodation is one of the UK’s largest providers of student accommodation, focussing on Russell Group cities.
It was formed in 2006 with the Wellcome Trust as one of its founding investors and merged with Goldman Sachs’ student housing business in 2016. The firm was acquired by global investment group Blackstone in a £4.7bn deal last year.
North East housing association announces takeover of 1,800-home estate
Karbon Homes has announced it will take over the 1,800-home Byker Estate from Byker Community Trust (BCT) following a five-year partnership arrangement reports Dominic Brady (Inside Housing).
The organisations said they have been working together successfully in a cost-sharing partnership since July 2016 and the transfer of engagements will bring accelerated investment into the estate between this year and 2029.
The landlords entered into partnership talks in September last year and have now received backing from 94% of customers and stakeholders via a poll earlier this year.
Karbon will see its total stock grow to around 28,000 homes with the addition of the Grade II-listed Byker Estate in Newcastle upon Tyne.
A new BCT committee, consisting of up to 12 members, will include local people as well as a minimum of four customers responsible for overseeing the quality of services delivered by Karbon.
The management area will continue to be called Byker Community Trust, the local office and colleagues have stayed on site, and all of the housing services in the estate will continue to be delivered by Karbon.
Paul Fiddaman, chief executive of Karbon, said: “I am pleased to formally welcome Byker Community Trust into the Karbon family after a successful partnership over the past five years.
“At Karbon, we are very focused on the individual communities we serve and taking a local and estate-led approach is a valuable model that works incredibly well in Byker. We will be gaining new insights, skills and experience from the BCT team and we are excited to have them join us and help us in our ambitions to provide customers with a strong foundation for life.”
Michelle Bell, previously director of property and development at BCT, has been appointed as assistant director of Byker community and will be responsible for managing the Byker Estate.
Ms Bell said: “I am delighted to be joining Karbon Homes and continuing to deliver the improvements that customers asked for and the strategic objectives for Byker.
“Karbon has a great track record for delivering excellent services to their customers and shaping strong and sustainable places for communities. With further investment, I’m excited to see the estate’s transformation over the coming years.”
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