Latest news with #WestOneLoans
The Independent
6 days ago
- Business
- The Independent
Why the North needs a headstart to tackle the housing shortage
West One Loans is a Business Reporter client The North of England requires significant investment to meet housing demands and reach the government's target before 2030. House-building in the North of England needs to see the greatest uplift compared with other regions if the country is to reach the government's national target of 370,000 homes per year. However, historical figures on net additional dwellings suggests that Labour is unlikely to meet its ambitious targets by 2030. That's according to the latest forecast by West One Loans, a leading provider of property finance and specialist mortgages, which compared figures on local housing need in each region, according to reforms as a result of the National Planning Policy Framework. According to the new framework, local housing requirements across England are set to increase by 21.4 per cent. The changes come as a result of the government's proposed reforms to the National Planning Policy Framework, and other changes to the planning system, with the most recent consultation held between July and September of last year. The framework acts as a rulebook for planning, giving local authorities an idea of what's required in order to achieve sustainable growth in the planning system. One major change proposed is a national housebuilding target of just over 370,000 new homes per year. At local authority level, the government is looking to remove or revise existing intervention criteria in a bid to stop nimbyism halting projects. Where do we need to see the most new homes built under new guidelines? According to research by West One Loans, on a regional level, it's the North East of England that needs to see the largest improvement. Under previous standards, some 6,123 homes a year were required by government calculations. However, under the new standard method, this figure will now sit at 10,976 – an increase of 79.2 per cent. In the North West, the number of homes now required on an annual basis has increased by 61.3 per cent, with the South West (41.8 per cent), South East (37.9 per cent) and Yorkshire and the Humber (33.5 per cent) also seeing some of the largest increases. Historical figures suggest targets remain unrealistic But are these latest revised guidelines realistic? Figures show that the government has been unsuccesful in its ability to deliver a substantial number of new homes to market across England. This is despite the fact that the government bases its housing supply success on net additional dwellings delivered, rather than actual new homes built – which accounts for the entire housing supply picture, including change of use, conversions and other gains, as well as being offset by demolitions, thus skewing the reality of how many new homes are actually built. During the Autumn Budget in 2017, the previous government set out plans to reach 300,000 net additional dwellings by the mid-2020s. An ambitious target when you consider that over the previous 10 years, the closest the UK came to achieving such a goal was in 2007/08, when 223,534 additional net dwellings were delivered. In the years that have followed, successive administrations have also fallen short of similar targets, with 2021/22 seeing the highest number of net additional dwellings delivered at 234,462 and no real consistency achieved in terms of increased delivery rates on a year on year basis. In fact, as we now reach the original deadline of the mid-2020s, the latest figures show that additional net dwellings numbers have actually fallen over the last two years, hitting 221,071 in 2023/24. Whilst the current government's intention to deliver 370,000 new homes a year are admirable, these figures suggest that they are also highly unrealistic, given the previous and consistent failings with respect to net additional dwellings growth. 'Our new Labour government has been quick out of the blocks with respect to new housing delivery, and its introduction of grey belt land classification is certainly one of the more positive steps we've seen in recent times,' says Co-Head of Short-Term Finance at West One Loans, Guy Murray. 'However, while admirable, the target of 370,000 new homes per year seems ambitious at best, particularly when you consider the failure of the previous government to come anywhere close to its target of 300,000 new homes per year. 'The key to boosting housing delivery is developer incentivisation, and this can take many forms – tax breaks, grants, credits or rebates, or improvements to help streamline the process, such as easing zoning regulations. 'Of course, the biggest incentive is a buoyant market, and we're yet to see the current government make any real statement with respect to stimulating buyer demand levels. In fact, they've done quite the opposite by failing to extend current stamp duty relief thresholds beyond the end of March.'
The Independent
6 days ago
- Business
- The Independent
What does a buoyant market mean for property developers?
West One Loans is a Business Reporter client Average UK house prices may exceed £300K in 2025, driven by rising demand, market optimism and renewed developer activity. The average UK house price could surpass the £300,000 threshold this year, as market sentiment is further buoyed by an increasing number of buyers returning to the market. This increase in demand is expected to allow developers to release equity in existing schemes at a greater pace and break ground on new projects – bringing more new homes to market in the process. The latest forecast by West One Loans, a leading provider of property finance and specialist mortgages, looks at the current and historic trajectory of UK house prices on a seasonally adjusted basis and how they are expected to perform over the year ahead. Property market on the up 2024 was a year of far greater stability in the property market, with Bank of England data showing that monthly mortgage approvals have sat north of the 60,000 per month threshold since February of last year. And with buyers returning to the market in their droves, the average UK house price currently sits 3.3 per cent higher than it did this time last year (Nov 24 - latest available). House prices forecast to climb further in 2025 2025 is set to be a year for greater positivity when it comes to house prices. In fact, perhaps surprisingly, all of the major industry commentators agreed over the past few months that house prices will increase in 2025. The most modest forecasts came from the Office of Budgetary Responsibility (OBR), which is forecasting a 1.1 per cent increase, with many of the big agents, such as Savills, JLL, Chestertons and Hamptons expecting an increase of between three to four per cent, while the Centre for Economics and Business Research (CEBR) has gone as far as estimating a 4.1 per cent increase. The forecast from West One Loans sits largely in line with those predicting a more buoyant picture for the year ahead. The firm's analysis of current and historic government data, adjusted to account for seasonal market fluctuations throughout the year, estimates that the average UK house price could climb by 3.5 per cent to 3.9 per cent over the course of 2025. Should the market meet this expectation based on the upper confidence level of the forecast by West One Loans, it would see the average UK house price tip the £300,000 threshold to hit £303,913. What does this mean for property developers? With the pace of the market set to quicken in 2025, property developers looking to take advantage of improving market conditions need to remain agile enough to move at the same pace in order to maximise the return seen on their investment. Not only is there a benefit to investing now before property values increase further, but in doing so, developers can reap the benefits of upward growth further down the line when they do bring their investment to market. In recent years, new-build stock has been slow to shift, largely because of the premiums associated with new homes and the affordability constraints placed on buyers by higher mortgage rates. Now, as the market gains momentum, developed units are likely to sell at a greater pace, allowing developers to release the equity stored in existing schemes to fund new ventures. Using short-term lending, such as bridging loans, is key in this respect, allowing many developers to move at speed, not just when it comes to new investments but also when hastening the speed at which they can complete renovation projects. 'The outlook for the year ahead is that the market will continue to improve from the ground made in 2024, and we've already seen a strong start to the year from those looking to utilise specialist lenders in order to capitalise on the growing opportunities that are emerging due to current market momentum,' says Co-Head of Short-Term Finance at West One Loans, Thomas Cantor. 'Many of those now utilising specialist lending are clients who have been dormant for the past couple of years, and this inactivity has largely been down to the slower pace of the new-build market. 'We've seen a slowdown with respect to demand for new-build homes and this has meant that developers have seen a great deal of equity tied up in existing developments, which has prevented them from pushing forward on their next project. 'However, this tide is certainly starting to turn and, with the expectation of a more buoyancy market over the next 12 months, we're now seeing these clients turn their focus to their next project and look to specialist lending to help get the ball rolling. 'Our ability to allow developers to utilise specialist lending during multiple stages of the journey has been vital in the current market and we're also seeing clients value the speed of delivery with respect to this finance, as it allows them to remain agile and capitalise on opportunities in a market where demand is increasing by the day.' House price forecast for 2025 conducted using 120 months of historical, seasonally adjusted house price data and an exponential smoothing forecasting model, including interpolation and accounting for seasonality with middle to upper confidence intervals given.
The Independent
6 days ago
- Business
- The Independent
The £200 billion landbank that could boost the UK's housing supply
West One Loans is a Business Reporter client How UK housebuilders are tapping into land to accelerate homebuilding amid rising demand, improved mortgage affordability and government pressure for delivery. The nation's biggest housebuilders have been using their landbanks, worth a combined value of £200 billion, to deliver more homes to market in the face of growing buyer demand spurred by improving market confidence and greater mortgage affordability. West One Loans, a leading provider of property finance and specialist mortgages, has analysed the latest company reports for eight of the nation's biggest housebuilders, to see which currently boasts the strongest pipeline with respect to their individual landbanks and the value of these plots in the current market. The government has been vocal in its demands for the nation's housebuilders to 'roll up their sleeves' to help achieve the ambitious target of 1.5 million new homes by 2029. So much so, it recently announced tough new rules forcing developers to commit to delivery time frames for planning permission, with those caught slacking risking losing their land to local authorities. However, the latest analysis by West One Loans shows that the majority of the nation's major housebuilders are already rising to the challenge, having reduced their landbank pipelines as a result of delivering more homes. The analysis shows that, across eight of the nation's biggest housebuilders, some 488,620 landbank plots were recorded within 2024 reports. Based on the current average UK new-build house price of £406,390, this means the total pipeline of these eight developers alone is worth an estimated £198.6 billion. Bellway currently boasts the most robust pipeline, with 95,292 landbank plots reported in its 2024 figures, holding an estimated market value of £38.7 billion. Persimmon ranks second, with 82,084 plots in its pipeline, worth an estimated £33.4 billion, whilst Taylor Wimpey sits third at £32 billion in market value across 78,626 landbank plots. However, while these developers have maintained a robust pipeline of plots, further analysis by West One Loans shows that there has been an increase in development activity on landbanks, no doubt driven by improving market conditions and increasing buyer demand as a result of a stabilising mortgage market. Across all eight major housebuilders, total landbank volumes have fallen by 3.6 per cent over the last year. In fact, all but one of the developers analysed by West One Loans has reduced the size of its landbank. Vestry Group has broken the most ground in this respect, with a -7.9 per cent year on year reduction in landbank volume. Berkeley Group has seen a -6.8 per cent reduction, while Crest Nicholson has seen an annual drop of -6 per cent. Only Miller Homes has seen an increase in this respect, although it's a marginal one, with its landbank volumes up by 0.1 per cent on an annual basis. 'It's clear that, while many of the nation's developers have been sure to maintain a robust pipeline of landbank plots, they have also been pushing forward and breaking ground in order to bring more homes to market to meet growing demand,' says Co-Head of Short-Term Finance at West One Loans, Thomas Cantor. 'This is despite the fact that the current landscape still presents a range of challenges. But, as interest rates have stabilised, we've seen more housebuilders turn to the specialist finance sector to help them facilitate their ambitions 'This has largely taken the form of a greater reliance on bridging in order to help part fund their initial project, as well as utilising development finance in order to exit existing builds in order to push forward with the next. 'We've seen numerous examples over the past 12 months where developers have utilised us to help them in both instances and, finding a finance specialist that can do so will ensure a far smoother process throughout.' Data tables and sources Data on landbank volumes sourced from each of the eight housebuilders individual company reports for 2024 - sourced within the data tables linked below.
The Independent
6 days ago
- Business
- The Independent
Growing use of bridging loans to prevent residential collapse
West One Loans is a Business Reporter client UK home buyers and movers utilising Bridging loans to prevent chain breaks. The latest analysis by West One Loans, a leading provider of property finance and specialist mortgages, has revealed that there has been a significant increase in bridging market activity driven by homebuyers and sellers looking to avoid a chain-break, as collapsed property transactions cost an estimated £275.5 million during the first quarter of 2025 alone. West One Loans analysed the latest data from TwentyCI on the estimated volume of fall-throughs seen during Q1, the average cost of a fall-through to those involved, and the estimated total cost to the market over the first three months of the year. The data shows 78,855 failed transactions occurred across the UK property market in Q1, with each costing an average of £3,493. This equates to a total quarterly loss of £275.5 million, reflecting the scale of disruption and financial inconvenience that fall-throughs continue to cause. This marks a quarterly rise of 11.6% in the number of fall-throughs versus Q4 2024, and an even steeper annual increase of 23.5 per cent. At the same time, the average cost of a fall-through has climbed to £3,493, resulting in a 13.2% increase in total market losses quarter-on-quarter, and a 27.9 per cent rise compared to Q1 2024. This escalation is largely attributed to increased market activity as confidence has returned, though the uncertainty surrounding the 31st March stamp duty deadline also likely contributed to transaction volatility. To help mitigate the risk of fall-throughs, West One Loans has seen a notable increase in homeowners turning to bridging finance as a safety net. According to the latest Bridging Trends data, chain breaks have consistently ranked as the first or second most common reason for taking out a bridging loan over the past four quarters—closely followed by property investment purposes. Co-Head of Short-Term Finance at West One Loans, Thomas Cantor, commented: 'While bridging finance has long been viewed as a specialist tool for more niche segments of the market such as property investors and auction buyers, we're seeing a clear shift in how it's being used. Whilst it has always played a part within residential transactions, we're seeing a growing number of homebuyers and sellers now turning to bridging to salvage their purchase or sale when a chain breaks down. Bridging is no longer seen as a niche finance option and, as a result of this demand, we've introduced limited edition rates for this more vanilla flavour of regulated lending in order to further capture this segment of the market. In today's competitive market, speed and certainty are paramount—and this is where bridging really comes into its own, which in turn has caused it to be increasingly seen as a mainstream solution to help prevent a deal from collapsing.' Data tables and sources Estimated average cost of fall through based on source value and estimated according to inflation increases and legal fee increases and in line with the latest house price data.
The Independent
6 days ago
- Business
- The Independent
Bridging loans forecast to hit £12 billion in 2025
West One Loans is a Business Reporter client Bridging loans are booming as borrowers seek speed, flexibility and short-term funding. Bridging lending saw record levels of growth in 2024, with data from the Bridging & Lending Developers Association (BDLA) showing that bridging completions hit a new record high of £2.30 billion during the final quarter of last year. The sector continues to boom, following a Q4 performance that saw the total loan book exceed £10 billion for the first time, with this figure forecast to hit £12.2 billion in 2025. This marked a 28.6 per cent increase on the previous quarter alone, pushing total completions to £7.34 billion for the year – up from £5.76 billion in 2023. Based on historic market trend data, West One Loans forecasts that this figure could hit £9.46 billion in 2025. As a result, the size of overall loan books exceeded £10 billion for the first time (£10.3 billion), with West One Loans also forecasting that this figure could top £12.2 billion by the end of the year. So what are the benefits of bridging? West One Loans has looked at the top seven reasons behind the current bridging sector boom. Speed and opportunity The most important factor is speed, with bridging loans taking an average of 38 days to arrange in Q4 2024. This provides an ideal solution for those who need to make quick decisions in order to take advantage of the opportunities on offer in the current market – for example, purchasing uninhabitable properties that a traditional lender may not finance. Flexible lending criteria and multiple uses Bridging lenders put a greater focus on asset value and exit strategy rather than credit history, and are not bound by the same laborious application and approval processes of conventional lenders. Bridging lending can also be used for multiple reasons, such as business needs, tax liabilities, debt consolidation or refurbishment. Short-term solutions Bridging finance is ideal for covering financial gaps and is ideal for scenarios where funding is needed for a purchase or renovation before an existing property can be sold. Higher LTV ratios Some bridging lenders offer up to 75 per cent loan-to-value, making it a far easier path to obtain significant funding. Customisable terms As with the flexible lending criteria, borrowers are able to negotiate terms to suit their individual needs, from custom interest payments to the repayment schedule itself. Again, this provides the flexibility that many borrowers require when it comes to traversing what has become an increasingly difficult landscape. Multiple users Bridging is accessible to a wide range of borrowers, from homeowners and property developers to landlords and business owners. This accessibility and the ability to tailor a bridging loan to the individual needs of the borrower is a driving factor behind the current boom. Exit strategies can reduce risk Finally, a well-planned exit strategy can make bridging a safe and effective solution, whether it's refinancing or selling a property. 'We've seen an incredible level of growth across the bridging sector over the past year, and this really highlights the vital role the sector plays within the UK property market, particularly as the landscape has become increasingly more turbulent and interest rates have climbed,' says Co-Head of Short-Term Finance at West One Loans, Thomas Cantor. 'It's fair to say that bridging has very much become a mainstream product and a vital tool in a developer's armoury. 'This is down to the many benefits the sector offers, not least the speed and flexibility a bridging loan can offer when securing short-term finance, as well as the fact that there are no early repayment penalties. 'It's these benefits that are enabling everyone, from property developers to landlords and homeowners to business owners, to progress with their plans without the restrictions that come via a more conventional lender – and we only anticipate that this current trend will intensify over the coming year.' Data tables and sources
