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First-time buyers and remortgaging drives mortgage market

First-time buyers and homeowner remortgaging are driving increased lending in the UK mortgage market according to data from UK Finance.

Residential remortgaging remained the biggest source of activity within the market despite it falling from a spike of almost 50,000 in January.

Experts believe the prospect of a Base Rate rise from the Bank of England next month is still motivating borrowers to secure fixed-rate deals.

Remortgage transactions rose 11.3% on a year earlier in February with 35,400 deals made with £6bn of lending completed – up 11.1% on the same month last year.

The buy-to-let market also continues to be powered by remortgaging with these deals up 20.5% on February 2017 to 14,100 – again this market saw a notable spike in January.

However, buy-to-let purchases continued to slide with the 5,200 completed purchases down 8.8% from last February.

Residential purchases

Encouragingly, the combined total of 50,000 residential house purchases conducted by first-time buyers and home movers was the highest figure for February since 2007.

The number of first-time buyers hit 25,200 in February, up 2.4% compared to the same month last year, while the 24,800 home movers remained unchanged on February last year.

Both these totals were largely on par with January’s figures and were the lowest by some margin over the last 12 months.

Around £9.3bn in lending was conducted to these groups – up from £9.1bn in February last year, but down marginally on January.

Fix costs

UK Finance director of mortgages, Jackie Bennett, said: “Homebuyers have shaken off the winter blues, with purchases by first-time buyers and home movers reaching their highest levels for February in over a decade.

“Remortgages are also up year-on-year, as homeowners look to fix costs amid anticipation of further interest rate rises.

“Meanwhile the buy-to-let market continues to operate at stable but subdued levels, due in part to the impact of recent legislative and tax changes,” she added.

Kensington Mortgages sales and marketing director, Craig McKinlay, said the potential for interest rate rises was likely the source of so much activity.

“Amid the noise about the Bank of England’s next decision on interest rates, remortgaging levels continue to remain high as borrowers organise their finances before any potential rate rise,” he said.

“Prudent borrowers are now locking themselves into competitive mortgage deals that remain on offer through the mortgage market, whether it’s for two, three or five years.”

Source: Your Money

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Bank of England to raise rates in May, almost all economists say

The Bank of England will raise its key interest rate to 0.75 percent in May, nearly all the 76 economists polled by Reuters said, then add another 25 basis points just before Britain is due to leave the European Union early next year.

Soon after the June 2016 vote to split from the EU, the Bank cut 25 basis points from borrowing costs, taking them to a record low of 0.25 percent. It reversed this move in November, a decision most economists said at the time was a policy error.

Following hawkish signals from policymakers and relatively upbeat data, all but seven of the 76 economists polled April 10-17 said Bank Rate would go up from 0.5 percent on May 10 when the Bank is also due to publish its quarterly Inflation Report.

A majority of economists, 37 of 62, said the BoE will have lifted Bank Rate to 1.0 percent or higher by the end of the first quarter next year. The median forecast shows the rate at a still historically low 1.25 percent in the final months of 2019.

Growth has continued since the referendum, and while Britain has fallen from the top to the bottom of the fastest-growing economies among its peers, the poll forecast only a median 10 percent chance of a recession this year.

Unemployment fell to its lowest since 1975 in the three months to February, official data showed on Tuesday, although wage growth in the period was not as strong as expected.

But the BoE has said falling unemployment should start to push up pay more quickly, the main reason it gave for being likely to raise interest rates faster than it had previously thought.

“February’s labour market figures provide us with optimism that sustained rises in real wages are now in prospect and should seal the deal on another interest rate hike in May,” said Ruth Gregory at Capital Economics.

STERLING SUPPORT

Progress has been made on a transition period after Britain is due to leave the EU by the end of March 2019, where much of its relationship will remain the same. But a lot remains to be discussed about future trading arrangements.

Economists gave a relatively low 20 percent chance of a disorderly Brexit, in which no deal is agreed by the end of March 2019. That probability has been the same all year.

“Following the agreement on the transitional arrangements reached at the March EU Summit, we view the risk of a ‘disorderly’ Brexit as having lessened further,” said Victoria Clarke at Investec.

In the aftermath of the EU referendum vote to leave, sterling GBP= slumped, making imports more expensive and causing prices to rise faster than the 2 percent annual rate the Bank targets.

But the pound soared to its highest level since then on Tuesday, reflecting weakness in the U.S. dollar, but also because of seasonal dividend payments to British shareholders from foreign companies.

So inflation is expected to ease and average 2.5 percent this year and then fall to 2.1 percent in the following two years, unchanged from last month’s poll. Wage rises are expected to outpace inflation this year and next.

Growth forecasts were also unchanged, with expectations for 1.5 percent in 2018 and 2019, little different from IMF forecasts published on Tuesday. After a sluggish 0.3 percent growth expected in the first quarter of the year, medians showed 0.4 percent through the end of next year.

Euro zone growth was predicted at 0.4 to 0.6 percent per quarter over the same period, but economists in a sister poll cautioned growth would take a further hit from the trade disputes between the United States and China. [ECILT/EU]

Over 90 percent of 31 respondents said the dispute would also damage UK growth, including two who expected the impact to be significant, but many said Brexit negotiations would hold more sway. Only two said Britain would benefit.

“Really very much contingent on what is actually implemented in the U.S./China dispute … Brexit-related trade issues are far more material in impact terms to the UK economic outlook,” said Marc Ostwald at ADM ISI.

Source: UK Reuters

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Total UK homeowner purchases reach highest level in over 10 years

Homeowner house purchases reached 50,000 in February, the highest level for the month since 2007. The data, which combines both home movers and first-time buyers, comes from the latest study on mortgage trends by trade association UK Finance.

The report also found that mortgage lending for first-time buyers, home movers and remortgagers increased in February this year compared to the previous year, equating to £4bn in new lending. According to the study, there were 25,200 new first-time buyer mortgages completed in February 2018, up about 2.4 per cent from the same month in 2017.

“Homebuyers have shaken off the winter blues, with house purchases by first-time buyers and home movers reaching their highest levels for February in over a decade,” said Jackie Bennett, director of mortgages at UK Finance. “Remortgages are also up year-on-year, as homeowners look to fix costs amid anticipation of further interest rate rises.”

The group’s analysis also shows that there were 35,400 new homeowner remortgages in February, an 11.3 per cent increase than in the same month last year. The resulting £6bn in remortgaging for the month was 11.1 per cent more year-on-year.

Commenting on the results, Craig McKinlay, sales and marketing director at Kensington Mortgages said: “Amidst the noise about the Bank of England’s next decision on interest rates, remortgaging levels continue to remain high as borrowers organise their finances before any potential rate rise. Prudent borrowers are now locking themselves into competitive mortgage deals that remain on offer through the mortgage market, whether it’s for two, three or five years.”

According to UK Finance’s analysis, despite a nearly nine per cent drop in the number of new buy-to-let house purchase mortgages this February compared to last year, there were 14,100 new buy-to-let remortgages completed in the month, an increase of 20.5 per cent from the same month in 2017.

“Spring came early for the UK housing market, with a flurry of activity in February pushing total homeowner purchases to their highest rate since 2007,” said Shaun Church, director at mortgage broker Private Finance. “Lenders are eager to get a slice of this revitalised market and first-time buyers should use this to their advantage to ensure they secure the most competitive mortgage deals.”

Source: City A.M.

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House Price Inflation – Government assessment of pressures

The Ministry of Housing, Communities and Local Government has released a short analysis illustrating the individual relationships between some important housing market pressures and house prices.

The report is not intended to be exhaustive and has limitations, but uses relationships estimated from the affordability model in the 2007 and 2008 reports by the National Housing and Planning Advice Unit (NHPAU). Click here to see the full report.

The analysis starts with the assumption that housing is a mature market and that Price is determined by the forces of Supply and Demand.

The 2008 NHPAU, ‘Affordability still matters’ report estimates the key drivers of house prices and their relationship with affordability sets out that holding all else equal:

  • If the number of households increases by 1% (Demand), house prices would increase by about 2%
  • A 1% rise in real incomes (Demand) would increase house prices by 2%
  • If interest rates increase by one percentage point (Demand) then house prices would fall by around 3%
  • If housing stock increases by 1% (Supply), house prices would fall by around 2%

House prices

From 1991 to 2016 the mix adjusted average house price in the UK increased from £54,000 to £206,000 (a 284 per cent increase). Deflating to 1991 prices using the Consumer Price Index, this is equivalent to a £70,000 increase over the same period in real terms.

Population Growth

In 1991, the population of England was 47.1 million. In 2016, the population of England was 54.5 million. This is equivalent to an increase of 16per cent over this period (1991 to 2016). As above a 1% increase in households should lead to a 2% increase in house prices meaning this population change should have led to a 32% price rise all else being equal.

The Immigration affect

Over the same period the non-UK born population of England increased from 3.5 million to 8.4 million. Therefore, the increase in the non-UK born population in England is expected to have led to a 21% of the overall 32% increase in house prices due to the Demands of an increasing population.

Real Income Growth

Over the 1991 to 2016 period there was a real term income growth of 75%. Applying the above ratios this demand led pressure should have raised house prices by 150%.

Interest Rate changes

Due to the wide range of interest rates pre-credit crisis from the period, 5-15%, and the subsequent levels below 0.5% there has been no estimated modelling of the effects interest rates have had on house prices whether inflationary or deflationary.

Housing Supply

From 1991 to 2016 housing stock in England has estimated to have risen approximately 20% from 19.7 to 23.7 million. Using the 2 to 1 ratio this Supply increase is thought to have had only a 40% deflationary pressure on house prices.

Therefore, from the government estimates and assumptions, it is real terms income growth that is showing as the highest inflationary pressure on house prices from 1991-2016 with this only being marginally dampened by deflationary supply pressures.

Interestingly the estimates are saying that Population and Immigration growth have proportionately had less of an inflationary affect than you would at first think. However, this is a very simplistic and crude modelling of the Housing Market with many other factors also in play. It also assumes that the Housing Market is still very ‘mature’ with little influences other than pure supply and demand on price.

Source: Property 118

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House prices in London’s most expensive borough Kensington and Chelsea have surged 30 per cent annually

Despite London house prices continuing to slump, the city’s most expensive neighbourhoods have seen prices surge in March. According to the latest house price index from Your Move, the borough of Kensington and Chelsea saw an increase of over 30 per cent compared to the same month last year.

Prices in London overall fell 0.7 per cent, meaning prices have declined for a third straight month across the capital. The average cost of a property in London is now £602,539, down 1.5 per cent from last year.

However, thanks to a number of high-value sales in the city’s most expensive neighbourhood, the drop in prices is no longer concentrated in the premium market. According to the research, the top 11 of London’s 33 boroughs have actually seen the smallest fall over the last 12 months to March this year.

Seven high value property sales in Chelsea and Kensington of over £10m pushed the average price in the area to a new high of over £2.5m. By contrast, other premium neighbourhoods have seen huge drops, with prices in Wandsworth slipping 15.9 per cent in the last year.

Overall, the Your Move report shows that the annual house price growth across England and Wales has slowed for the tenth successive month in March to 0.7 per cent, compared to 5.1 per cent in the same month last year. The average house price in England and Wales is now £301,490, up just £1,985 on a year ago.

But while house prices continue to tumble in London, six out of the ten regions examined by the report have set new peak average prices. Excluding London and the south east, the rest of England and Wales has seen prices grow at 2.6 per cent, with Bristol leading the charge at 8.4 per cent growth.

“The slowdown in London and the south east is now well established,” said Oliver Blake, managing director of Your Move. “Yet the performance of many of our key cities and regions elsewhere shows that there’s still life in the market yet.”

Source: City A.M.

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Does immigration really make house prices go up, and more new homes make them go down?

What determines house prices? Most people would say ‘supply and demand’ – but what about interest rates, wages, and employment?

And what about immigration, which current housing minister Dominic Raab controversially claimed was responsible for house price rises.

It turned out that he had been given the information by civil servants, based on what critics described as ‘back of fag packet’ estimates by a now defunct quango.

Well, now you can see for yourself what actually has been said about house prices – and immigration.

Back in 2007 and 2008, the National Housing and Planning Advice Unit (NHPAU) published two reports about affordability. The body was abolished in 2010, after three short years, in the bonfire of the quangos.

Its reports were written around a University of Reading model which estimates the relationship between housing supply and affordability with demographic trends, incomes, the labour market and the housing market.

The NHPAU reports concluded:

  • If the overall number of households rises by 1%, house prices would go up by 2%
  • A 1% rise in incomes would increase house prices by 2%
  • If interest rates go up by 1%, house prices would fall by 3%
  • If housing supply rises by 1%, house prices would fall by around 2%

The Ministry of Housing, Communities and Local Government has applied these figures to house prices over a 25-year period from 1991 to 2016.

In that time the number of households in England has gone up by 4.8m – or 16% – theoretically causing a 32% increase in house prices.

Most of the rise in the number of households was due to immigration, says the ministry. During the same period the non-UK born population of England rose by 4.8m from 3.5m to 8.4m. This theoretically contributed a 21% rise in house prices.

What about earnings? Between 1991 and 2016, household incomes shot up by 75%, leading to a 150% rise in house prices.

Interest rates?

A tricky one, because interest rates have actually fallen. The Bank of England’s base rate has declined 11% over the period. In 1991, mortgage rates averaged 7.6%; in January 2016, they averaged 4.2%.

Unsurprisingly, the Ministry of Housing therefore concludes that rises in interest rates currently aren’t much use in predicting house price movements.

Housing supply has risen 20.6% over the period, which theoretically should have led to house prices reducing by 40%.

Which, when we last looked, they hadn’t.

So it does make you wonder whether building the hundreds of thousands more houses that everyone says are needed to solve the housing crisis will actually solve anything at all.

The report was published on Friday, meaning that in the weekend papers, the row about Raab and what he said about immigration and house prices rumbled on.

https://www.gov.uk/government/publications/analysis-of-the-determinants-of-house-price-changes?utm_source=cbc9f2c0-5657-4890-94cf-c8497239e5a5&utm_medium=email&utm_campaign=govuk-notifications&utm_content=immediate

Source: Property Industry Eye

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Record number of landlords remortgaging for home improvements

The number of landlords remortgaging to release money for home improvements has reached a record high, Countrywide’s Monthly Lettings Index found.

In the last 12 months, out of the 171,421 landlords who remortgaged their buy-to-let property, 9,523 did so to take money out to spend on their investment.

This is up from 8,459 in 2017 and three times more than in 2016 (2,967).  In the last 12 months 5.6% of landlords who remortgaged released cash to spend on their property, up from 1.9% in 2016.

The greatest increase was in the East of England where, in the last 12 months, one in 10 landlords (10.4%) who remortgaged released money to spend on home improvements, up 6.8% in the last two years.

Johnny Morris, research director at Countrywide, said: “A record number of landlords are remortgaging to release money to spend on their properties instead of trading up.

“The additional transaction costs incurred from the stamp duty changes for second-homeowners means more landlords are choosing to invest in their properties, refurbishing and improving them and holding on to them for longer to maximise gains.

“Average rents grew in seven out of eight regions across Great Britain, with Scotland being the only region to see falls.  Rental growth during the first quarter of this year stands at 2.1%, 0.5% faster than the same period in 2017, as low stock levels continue to drive growth.”

Every region across the UK has seen a rise, but regions in the South have seen the biggest growth in landlords releasing cash.  In London, 7.4% of landlords remortgaging released money for home improvements, up 4.4% in the last two years.

Landlords in London took out the most money to spend on buy-to-let improvements, £35,470 on average.

This is over three times the amount an average landlord in Yorkshire and the Humber withdrew (£11,150).  Across Great Britain as a whole, the average landlord remortgaging to make improvements took out £22,850.

The Midlands saw the fastest rental growth, up 2.8% year-on-year, followed by Wales (2.1%) and Greater London (2.1%). Average rents in Scotland fell for the second month in a row, but the rate of decline slowed in March.

Source: Mortgage Introducer

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Using debt to leverage your property portfolio

Those who begin the often long journey to building a property portfolio tend to have an aversion for debt which can prove detrimental to their long-term investment returns. The idea of using cash to purchase property is admirable, limiting debt makes perfect sense in many everyday scenarios but the use of long-term debt instruments can seriously improve your long-term property investment returns.

DO NOT OVERSTRETCH YOUR FINANCES

In years gone by it was possible to obtain a 100% mortgage in the UK which led to many people investing in the buy to let property market. The idea was that rental income from investment property would be significantly higher than the cost of a mortgage. This effectively allowed investors to pay off their mortgage, increasing their property equity, using tenant income. The problem with 100% mortgages is that mortgage rates move, rental rates are dependent upon the area and if your investment property is vacant for any period of time, this can seriously impact your cash flow.

So, if for example you have £100,000 in cash to invest in the property market then why not split this between two different properties. An investment of £50,000 in cash in a property ensures that from day one you have an equity content of £50,000 if ever required. If a property was going to cost £100,000 then you would arrange separate mortgages, or a combined buy to let mortgage, for £100,000 in total. If the mortgage rate was 5% but you were able to obtain a rental yield of 10%, which is not impossible with HMOs, then not only do you have the financial headroom of the cash equity content in each property, but income should more than cover mortgage costs.

INCREASING YOUR EQUITY

Each mortgage payment effectively increases your equity share in a property therefore after five or 10 years the combined equity share can be significant in the above example. It is then possible to use existing equity share as collateral for more property investments and more debt which is covered by rental income. If you notice, we have not even touched on the subject of capital gains which in the long term can be significant.

In order to be successful with property investment you need to be flexible and take emotion out of each decision. You may have your favourite properties, they may have emotional ties to you, but there may come a time when you need to sell and reinvest elsewhere. If for example:

You acquire a property for £100,000 with a rental yield of 10% and the value of the property increases to £150,000; then the rental yield (assuming no increase in rent) would fall to 6.66%. Your rental income would still be £10,000 a year but as a percentage of the value of the investment it would fall.

There may well be an opportunity to sell the property, banking a £50,000 profit, and reinvest in a £150,000 property with a 10% rental yield (as well as long-term potential for capital growth). This would see an increase in your actual rental income to £15,000 a year and the ability to pay off your mortgage at a faster rate.

However you could also use the £50,000 profit (and initial investment of £50,000) as part payment on other investments, acquiring two new properties for £100,000 each. This would:-

  • spread your risk
  • increase your overall rental income to £20,000
  • increase your mortgage liabilities but they would be backed by a greater equity share and rental income

and the cycle begins again. It all comes down to relative long term value for money.

CONCLUSION

It is all about buying properties which offer relatively high rental yields and disposing of these properties if the rental yield falls significantly; as a consequence of an increase in the value of the property. There is an obvious argument for holding the property in the longer term and looking to bank a greater profit in the future. However, property markets tend to be cyclical and history shows us that a relatively high rental yield offer significant support to the value of a property even in troubled times.

It is simply a case of mixing and matching investments which offer high rental yields against those which offer potential for high levels of capital appreciation. In many cases a relatively high yield would indicate relatively low potential for capital appreciation, whereas potential for high levels of capital appreciation would indicate a property with a relatively low rental yield. This is not always the case and there are pros and cons to each of the investment strategies, therefore it is worth maintaining a long-term balance.

Source: Property Forum

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The pound is the ‘darling of the currency world’ right now — and it’s only going to get better

  • The pound is the “darling of the currency world” right now, according to ING FX strategist Viraj Patel.
  • That’s because the pound has stopped trading on Brexit developments for the time being, and is moving more on its fundamentals.
  • “Gone are the days of noisy Brexit headlines stirring sharp – and almost sentimental rather than fundamental – knee-jerk moves in the currency,” Patel wrote.
  • The pound is currently trading at around $1.42, close to its highest level since the Brexit vote. You can track its progress on Markets Insider.

LONDON — The pound is the “darling of the currency world” right now as it finds a sweet spot during a lull in developments over Brexit, and benefits from continued weakness in the dollar.

Writing on Friday, Viraj Patel, currency strategist at Dutch bank ING noted that “2018 is very much a different Brexit trading environment for the pound,” compared to the last year and a half of pain following the UK’s vote to leave the EU back in June 2016.

Several factors have played a role in this recent resurgence, ranging from increased market confidence that the UK and EU can strike a Brexit deal, to falling confidence in the agenda of US President Donald Trump.

Britain’s better than expected economic performance in the last 18 months has also boosted sterling in the first quarter of 2018.

“Gone are the days of noisy Brexit headlines stirring sharp – and almost sentimental rather than fundamental – knee-jerk moves in the currency, with the buffer of last month’s Brexit transition deal buying GBP investors some extra time to assess the Brexit facts,” Patel wrote.

The pound has shifted, Patel said, from trading on political developments around Brexit, and moved towards trading on cyclical factors like data, which provide a view of the state of the British economy.

“With the next stage of negotiations surrounding a future UK-EU trade deal, which begin next week, likely to be long-winded and complex, it appears that we’re back to good old-fashioned UK data watching to determine the short-term direction for the currency,” he said.

That data driven trading means that the next week or so could be a big one for the pound, with numerous data releases on the immediate horizon.

“The week ahead shouldn’t disappoint here given the array of key data releases to watch out for – including the latest UK labour market report (Tue), CPI data (Wed) and retail sales (Thu),” Patel said.

Strong data next week, he added, should boost the pound even further, as it is likely to increase the chances of the Bank of England raising interest rates at its May meeting, which is now just over two weeks away. Higher interest rates are, broadly speaking mean higher currencies — so if the BoE does raise rates from 0.5% to 0.75% on May 3, the pound should benefit.

“We think signs of firming wage growth next week may seal the deal for a May BoE rate hike – though it is the UK activity side that may hold the key to the pace of BoE normalisation and GBP’s cyclical re-pricing,” Patel said.

Another factor helping the pound be a currency darling right now, is its traditionally strong performance in the month of April.

The pound has traditionally performed well in April, regardless of both the political and economic situations in the UK and globally.

“April seasonality is approaching again for GBP, which tends to rally no matter what the political/macro backdrop,” Kamal Sharma, a strategist at Bank of America Merrill Lynch wrote in a note to clients in late March.

Sharma calculates that the pound has ended every April for the last 14 years at a higher level against the dollar than it started the month.

“Within the G10 FX complex, there is no stronger seasonality than in GBP through April,” Sharma wrote.

That trend includes major events including the financial crisis, general elections, and the Brexit referendum.

The pound is currently trading at around $1.42, close to its highest level since the Brexit vote, as the chart below shows:

The pound is the 'darling of the currency world' right now — and it's only going to get better Commercial Finance NetworkMarkets Insider

ING’s forecast, considering all the above information, is that the pound will continue to appreciate, ending the second quarter at around $1.45.

Source: Business Insider

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New-build market in the UK to benefit from genuine competition for water connections

John March, Water Director at GTC shares his views on how the new-build market in the UK is to benefit from genuine competition for water connections

From April 2018, measures introduced by Ofwat, the UK water regulator, sweep away barriers to competition and, for the first time, give housebuilders and developers in England and Wales a real choice of providers for new water and wastewater connections. This opening up of the water market is expected to bring developers in both the private and public sectors significant benefits, including the opportunity for developments of all sizes to adopt a truly multi-utility approach, sourcing all of a site’s utilities through a single network provider.

Until now, there have been very limited opportunities for developers to source their water networks from anyone other than their local water company. In England and Wales, water companies supply domestic water and wastewater services on a monopoly basis within their specific geographical areas. It has always been an option for new developments to choose a competing water company, but under the previous rules, it was only financially viable for competing companies to become involved on the largest projects.

Water competition – the changes

These competing water companies are referred to as NAVs – ‘New Appointment and Variation’ – and are licensed by the regulator on a per-site basis. NAVs own and manage the site network providing billing, maintenance and customer services. They either install the network themselves or adopt networks installed on a developer’s behalf by Self-Lay Providers (SLPs).

Following an investigation into how the water market was operating, Ofwat identified several significant barriers to competition. These involved the way in which tariffs for bulk water supply and income offset were calculated. The changes being introduced will make it easier for developers and competing water companies to establish what an incumbent water company will charge to connect a new development to their existing water network. The charges will also be fairer, with new connections being the same irrespective of who the final network owner will be. In addition, Ofwat has undertaken to streamline the lengthy licensing process required to appoint alternative network providers, such as GTC.

Bringing water into line with the markets for gas and electricity

Housebuilders and developers are used to the freedom to choose their network providers for gas and electricity connections and indeed most of new electricity and gas connections are undertaken by independent network providers. The gas and electricity markets in the UK were liberalised twenty years ago and the opening up of those markets has delivered increased competition on price, higher service standards and more innovation and development. The same benefits will now be available in the water and wastewater markets. The Home Builders Federation (HBF), the representative body for the home building industry in England and Wales regards these developments as so significant that it has established a committee to focus on how these major changes will impact its members.

GTC, as the UK’s largest independent utility network provider to the new-build market, has welcomed the opening up of the water market and has been working with Ofwat and Water UK, which represents the water industry, to help make these changes happen. GTC has considerable experience of being a NAV licence holder and is already responsible for more than 8000 live water and wastewater new connections, with contracts to build out tens of thousands of further connections on sites from Newcastle in the north to Weston-Super-Mare in the southwest. GTC is looking forward to being able to offer the whole housebuilding sector the opportunity to benefit from its different approach to network provision across all the utilities.

The future is… multi-utility

With the arrival of genuine competition in the water market, adopting a multi-utility approach is now a realistic option for housebuilders and developers working on sites of all sizes. Now all a development’s utilities – water, wastewater, electricity, gas, ultrafast FTTH (Fibre-to-the-Home) and in some case district energy – can be sourced from a single independent provider. Utility procurement can be simplified with only one set of tenders, one company to deal with and a single project manager who oversees the installation of all the utilities with all the time and cost-savings, that would deliver.

GTC and its sister company Metropolitan, has worked in just this way on several flagship projects such as King’s Cross and Greenwich Millennium Village in London and has direct experience of the benefits that co-ordinated utility installation and combined network management can bring. Those benefits will now be available to much smaller developments, even those of as few as 50 houses.

Developers need to act now

The new measures come into force in April and every housebuilder and developer needs to consider how these changes will affect their utility procurement. Provided an order has not yet been placed, it is still possible to review options.

Robust competition across all the utilities for new-build developments can only be a good thing. It is now up to housebuilders to take full advantage of these new opportunities.

Source: Open Access Government