The housing supply conundrum - New Government, new market?

November 2014

jll.co.uk/residential

UK FORECASTS

Andrew Frost

Head of UK Residential

November 2014


UK FORECASTS

The Housing Conundrum Public opinion & what it means

@benatipsosmori

4th November, 2014

Ben Page

Chief Executive

Ipsos MORI

Our Latest Results for JLL

Fieldwork conducted 10-13 October 2014

1,009 GB adults 16-75

conducted online weighted to national profile

-80

-60

-40

-20

0

20

40

De

c-9

7M

ar-

98

Jun-9

8S

ep-9

8D

ec-9

8M

ar-

99

Jun-9

9S

ep-9

9D

ec-9

9M

ar-

00

Jun-0

0S

ep-0

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01

Jun-0

1S

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1M

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02

Jun-0

2S

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03

Jun-0

3S

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3M

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04

Jun-0

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09

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10

Jun-1

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11

Jun-1

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Jun-1

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14

Jun-1

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ep-1

4

+4

-46

-56 -48

+23

-64

+12

+34

Irrational Exuberance over the Economy? Base: c.1,000 British adults each month

Inde

x (

ge

t b

ett

er

min

us g

et w

ors

e)

Source: Ipsos MORI Political Monitor

Q. Do you think that the long-term economic condition of the economy will improve, stay the same or get worse?

House Price Sentiment Mirrors Economy

+9

-2

+7

+19 +15 +15

+20

+33 +40

+64 +66 +65 +66 +62

-28 -32

-48

-14

-32

-9 -6

-19

0

+23

+15

+23 +29

+24

-60

-40

-20

0

20

40

60

80

Apr-11 Oct-11 Jan-12 Mar-12 Jun-12 Oct-12 Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jul-14 Sep-14

HPO

EOI

HPO – balance of % higher minus % lower

EOI – balance of % improve minus % get worse

Q. Do you think the average property price in the UK will be higher or lower in 12 months time or will it be the same? (HPO)

Q. Do you think the general economic condition of the country will improve, stay the same, or get worse over the next 12 months?

Source: EOI – Ipsos MORI

(measures in advance of HMCT fieldwork)

Source: HPO – Halifax/Ipsos MORI Housing Market Confidence Tracker

Base: c.1,000 British adults age 18+ each month

And as Market ‘Cools’, Housing’s Salience Dips?

Year

0

50,000

100,000

150,000

200,000

250,000

0

2

4

6

8

10

12

14

16

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

% mentioning housing asamong/the most important issue(s)facing GB

UK average house price

Sources: Ipsos MORI Issues Index Halifax House Price Index (All(Mon)NSA)

£67,775

(Mar‘97)

£187,018

(Sep’14)

6% (Mar’97)

10%

(Oct’14)

£200,578

(Jul‘07)

16%

(Jul’07)

% m

entio

nin

g

£ UK average house price

Public Say Prices are too High Base: 1,009 GB adults 16-75, online,

10-13 October 2014

Q. Thinking about Britain in general, please indicate the extent to which you agree or disagree….

“House prices are currently too high”

Source: Ipsos MORI/ JLL

45

% Strongly

Agree

% Tend

To Agree

% Tend To Agree (4%)

% Strongly Disagree (1%)

33

14

% Neither

Agree/Disagree

Seen as Most Important Housing Issue Base: 1,009 GB adults 16-75, online,

10-13 October 2014

Q. Which, if any, of the following do you see as the 2 or 3 most important problems

facing the housing market in Britain today?


House

prices are

too high

47%

Size of

deposits

31%

Lack of

social housing

30%

Not enough new

homes being built

20%

Rents

too high

28%

Too many people from

abroad buying homes

21%

Housing benefit

changes

14%

Banks not giving

out mortgages

15%

Stamp duty is too high

14%

Big homes

occupied

by 1 or 2 people

5%

Too many

second homes

13%

Not enough schemes for

renters to get on ladder

12%

Only… Base: 1,009 GB adults 16-75, online,

10-13 October 2014

8% Identify Prices And Supply As Top Issues


Better Link Prices & Supply In London?

47

39

37

14

7

5

5

3

2

1

1

Over-population/ immigration

Planning/ ability to build/ land availability

Economic backdrop/ lack of financing

Local government policy (e.g. housing allocation)

Renting - poor landlords

Poor housing choice

Poor housing quality

%

Source: Ipsos MORI/London Councils

Base: Londoners agree there is a housing

crisis in London (829). 18 - 29 Oct 2013

Government policy incl. welfare reform & legacy of Right to Buy

Affordability of housing/house prices

Buy to let/people buying properties and not living in them

17

Q. And what, if anything, do you think are the main causes of the current housing crisis in London? (spontaneous)

Lack of building/housing supply/ investment

“The nearest the British have to a religion” (#2)

Q. If you had a free choice, would you choose to rent accommodation, or would you choose to buy? % Buy

70%

75%

80%

85%

90%

95%

96 97 98 99 00 01 02 03 04 05 06 07 08 09 10

Pre war Baby boomers Gen X Gen Y Overall

Aspiration is Strong

Source: Ipsos MORI analysis of BSAS (NatCen)

19

Kids Recognise Problem

Q. Do you think it will be easier or harder for you to buy your own house than it was for your parents?

40%

16%

29%

16%

Harder for me

Easier for me

About the same

Don’t know / not stated

Base: 2,734 11-16 year olds

Source: Ipsos MORI Young People Omnibus (2014)

34%

23%

22%

16%

4%

Q To what extent do you agree or disagree… ‘Rising house prices are a good thing for Britain’?

Base: 1,970 British adults 13-23 September 2013

% Agree

% Neither/Nor

% Disagree

Source: Ipsos MORI/Inside Housing

56% Own/Occ’ 58% Renters

Consensus on Challenge of Rising Prices

Q To what extent do you agree or disagree… ‘Rising house prices are a good thing for me personally’?

Base: 1,970 British adults

13-23 September 2013

Source: Ipsos MORI/Inside Housing

% Agree

% Neither/Nor

% Disagree

24%

18%

28%

19%

10%

41% Own/Occ’ 9% Renters

…But More Divisive in Personal Terms

And JLL Survey Found Disquiet Abut Lending Base: 1,009 GB adults 16-75, online,

10-13 October 2014

Q. Thinking about Britain in general, please indicate the extent to which you agree or disagree….

“it has been made too difficult for people to get mortgages these days”


28%

38%

17%

9%

3 5

Strongly agree

Tend to agree

Neither agree nor disagree

Tend to disagree

Strongly disagree

Don't know

Agree 66%

Disagree 11%

Mortgage holders

Agree 70%

Disagree 13%

Overall

9% 22%

48% 60%

Up to £50 Up to £100 Up to £200 Up to £300

Some Low Tipping Points – Interest Rates Base: 651 mortgage-holders,16-75,

online, 10-13 October 2014


Q. What is the smallest amount your monthly mortgage repayments would have

to increase for them to become unaffordable? (Mortgage holders)

Increase per month

% Who Would Find This

Increase Unaffordable

The Supply Conundrum

The Problem/Solution Conundrum Base: 1,009 GB adults 16-75, online,

10-13 October 2014

Top 4 of 7

Building more

homes which are

affordable

35%

Reducing

the no. of

empty

homes

32%

30%

61% Agree We Are Not

Building Enough

Homes Nationally

Q. Thinking about Britain in general, please indicate

the extent to which you agree…

“We are not building enough homes

to keep up with what is needed”

Q. Which, 1 or 2, if any, do you think should be the highest

priority for the Government to deal with?


Making it

easier for

FTBs…

28%

Improving

run down

estates

27%

Solution More Contentious Than Problem

71% 84%

Q. To what extent do you agree or disagree…

Con Lab

There Is A Housing Crisis In Britain?

More New Homes Need To Be Built In The Local Area? 44% 60%

80%

Own/occ’ Renters

47% 62%

% Agree

79%

Base: 1,015 British adults

12-14 January 2013

Ipsos MORI/Evening Standard

The Central/Local Conundrum Base: 1,009 GB adults 16-75, online,

10-13 October 2014

61% agree “we are not

building enough

homes nationally” 24% of these do not agree “we

are not building enough

homes locally”

Source: Ipsos MORI/ JLL Includes ‘Neither/nor’ and ‘Don’t know’

The Quantity/Quality Conundrum

[Respondents were given the estimated number of new homes London needs (32,000 new homes a year*)]

Base: 500 online interviews with adult (16+)

residents in Greater London, 24-27 May 2013

Source: Ipsos MORI for Berkeley Group

Build fewer homes with

higher design standard

38%

Build more homes with

lower design standards

28%

Q. “Thinking now about getting the balance right between the quality and the amount of new housing,

which, if either, of the two options do you think would be best for London?”

New Builds have an Image Problem?

Source: Ipsos MORI/Halifax

More

expensive (47% think 6%+)

Smaller

Source: Shelter

The Government/Market Conundrum Base: 1,009 GB adults 16-75, online,

10-13 October 2014

Base: All non-owning/mortgaged 18-29 year olds who think

getting on the property ladder is difficult (1,748), GB, 20-27 March 2013

Source: ComRes/BBC

60% Disagree


Q. Who or what do you think is most responsible for young

people finding it difficult to get onto the property ladder?

35%

Q. Thinking about Britain in general, please indicate the extent to which you agree…

“There isn’t much that British governments can do to encourage the building of new homes”

Size Of Deposits

33% Property Prices

11% The Government

11% The Banks

The Lead/Follow Conundrum Base: 2,011 GB adults 16-75 (online),

30 May-4 June 2014

Source: Ipsos MORI for CIH

Strongly agree

27% 16% 13%

Tend to agree Tend to disagree

Strongly disagree

28% 40%

12%

30%

Neither agree nor disagree

30%

58%

Q. To what extent would you support or oppose more homes being built in your local area?

Q. To what extent would do you support or oppose the building of new homes…

Opinion Very Conditional and Local

22% 35%

..In The District …In The Local Area …If Meant Young

People/Families

Could Stay

10%

…If Meant Building On

‘Greenfield’ I.E.

Undeveloped Land

70%

Base: 902 residents, Dec 2011-Feb 2012

Source: Ipsos MORI for Canterbury City Council

% Opposition

The Challenge For Managers & Leaders

– TRY SOMETHING NEW

Thank You @benatipsosmori

4th November, 2014

Ben Page

Chief Executive

Ipsos MORI

November 2014


UK FORECASTS

Adam Challis

UK Residential Research

View the report that supports this presentation >

http://residential.joneslanglasalle.co.uk/

http://residential.joneslanglasalle.co.uk/research/residential-forecast-report-the-supply-conundrum-november-2014.aspx

A PRESENTATION IN TWO PARTS

The Supply Conundrum Forecasts & Rationale

% change pa

Source: JLL

% change pa

Source: JLL. Greater London definition includes all 33 London local authorities

% change pa

Source: JLL. Prime London definition includes, Mayfair/ St James, Belgravia, Knightsbridge, Chelsea, Kensington (part), Holland Park

November 2014


UK FORECASTS

View the report that supports this presentation >

http://residential.joneslanglasalle.co.uk/

http://residential.joneslanglasalle.co.uk/research/residential-forecast-report-the-supply-conundrum-november-2014.aspx

The housing supply conundrum - New Government, new market?

Real Estate

Transcript of The housing supply conundrum - New Government, new market?