Here’s what’s driving that house price confusion
The UK’s main house price indices have been diverging noticeably in recent years, as this blog pointed out last week. A look at the trends in housing sales helps explain why.
Here are some useful charts from housing data firm Hometrack. Read more
Landlords are the real winners in the UK housing market
An interesting picture of the changing face of the UK housing market is provided by an analysis of census data by estate agency Savills, given exclusively to the FT.
The private rented sector is the main success story – it’s the only part of the market to have increased in value since the recession, and now makes up 17 per cent of the UK’s housing stock by units and 18 per cent by value, Savills found.
How much do parents value a safe environment, green spaces and a good education for their children? Such things are priceless – except that, of course, they are not. The best things in life may be free, but buying a house in the vicinity of the best things in life is expensive.
Economic researchers use house prices like a movie jewel-thief uses an aerosol spray. The aerosol isn’t important by itself, but it reveals the otherwise invisible laser beams that will trigger the alarm. The house prices aren’t necessarily of much direct interest, but indirectly they reveal our willingness to pay for anything from a neighbourhood free of known sex offenders to the more familiar example of a popular school. Read more
Who’s behind that soaring housing benefit bill?
The number of housing benefit claimants is rising, and thus so is the cost to the Treasury, data from the Department for Work and Pensions shows. The number of people claiming housing benefit has increased by a startling 780,000 since the beginning of 2009 to 5 million.
There are a couple of small rays of light for the government.
Firstly, the rate of increase in claimants has slowed since the general election in May 2010.
Buy-to-let: don’t believe the hype?
Buy-to-let properties have bucked the housing market trend in recent years, seeing steady growth in lending.
Partly this is because new finance to owner-occupiers has dropped off so much since the credit crunch: the lack of mortgage availability, particularly for first-time buyers, has fuelled a booming rental market. Demand is pushing up the cost to tenants: average rents are up 4.3% year-on-year.
All this makes buy-to-let an exciting prospect for investors.
But buy-to-let mortgages are looking increasingly risky, according to detailed new data from the Council of Mortgage Lenders. Read more
On new grammar schools
There’s an interesting development in Croydon, my scenic home town. The south London borough is fully comprehensive: it has no academically selective state schools (“grammar schools“). Since 1998, it has also been forbidden for new grammars to be opened anywhere in the country, except as replacements for closing ones. But Croydon council has an interesting idea.
Tim Pollard, the councillor in charge of schools, has written about a new school site that the borough is opening. The council want an existing school to run the site, in Norwood, as an annex. If the “parent” school were a grammar, the new half-a-school could be too.
…we took the decision yesterday to open up the competition to run this school to all types of secondary school, not just community-style comprehensive schools. The criteria the new provider needs to meet are that it should be a Good or Outstanding school in its OFSTED rating, that it should have well above average GCSE and A-level results and that it must be able to demonstrate that it can apply its admissions criteria appropriately and be in a position to receive funding from the Government as it expands.
So does that mean it could be a Grammar School? Yes, it could.
In Croydon we converted our last grammar schools into comprehensives many decades ago, in line with what was then government thinking. Our neighbours in Sutton, Bromley and Kent, on the other hand, resisted the intense pressure then put on education authorities to follow suit and kept their selective schools. Those schools, including Wallington Boys & Girls, Wilsons and Newstead Woods, are now amongst the most popular choices for Croydon parents who seek the best standard of education for their children. They are heavily oversubscribed, with many more children passing the exams than can possibly be accommodated.
It will be worth watching this unfold. “Satellite” schools and “annex” sites may be a loophole for establishing new grammar schools. Kent council, which is fully selective, will open a grammar school annex in Sevenoaks. But selection is firmly embedded there.
A Croydon grammar annex would be a bigger step – it would both mean a grammar crossing a borough border and introducing selectivity into a new area. This is all early on, but if Croydon gets this through, it could open up grammars once again as a national issue.
Here is why.
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Kate Allen works in the editorial statistics team in London. She previously specialised in housing data reporting for a national trade magazine.
Chris Cook works in the FT's comment team. After joining the FT in 2008 as a Peter Martin Fellow, he worked for two years as a leader writer and then as education correspondent.
Emily Cadman joined the FT in 2010 and is head of the interactive desk.
Martin Stabe works on the FT's interactive team, specialising in databases for interactive graphics.
Keith Fray heads the editorial statistics team, providing data for articles and graphics. His background is in economics, studying at Birkbeck College, London.
Norma Cohen is the FT's Demography Correspondent.
Valentina Romei is a statistical researcher at the FT. She joined the FT in 2008 after working both as an academic and market researcher.
