This week’s Property Eye features the latest election news, the latest in Celebrity Watch, Betting on Property Investment and much more! View this email in your browser Property Eye Some of this week’s property related stories Celebrity Watch Mirren gives up French and takes up Italian Award winning actress Helen Mirren and her director husband Taylor Hackford are selling their partly restored house in Provencal France (which they have owned for 10 years) to concentrate on doing up their home in Puglia Italy. The couple, who also own properties in London, New York and LA hope to achieve a sale price of around £463,000 for their 3 bed French property and commenting on the decision Ms Mirren confirmed that “Italy is our home, so now I’m trying to learn Italian”. Bringing home the Bacon Francis Bacon’s old Battersea studio is for sale for £1.65 million. The painter shared the four-bedroom mansion flat with two friends and it also doubled as a studio for the famous artist. Royal Benefit A survey of 1000 buyers by Onthemarket.com has revealed that many people would be prepared to pay more for a property in a street with a royal sounding name. Royal, Palace, Lord, Queen, King and Crown led the way with 40% prepared to pay an extra £5000 for the privilege; 10% would pay up to £30000 more and 3% an extra £50000 or more. Royals Overlooked Apartments with open views of the back garden of Buckingham Palace are in development at No 1 Palace Gate. The existing civil service offices are being demolished for conversion into 72 homes. Only 14 of the properties will enjoy the views at an asking price of £30 million (although demand has been so strong that prices maybe “tweaked higher” according to a spokesman for developer Northacre). The development will range from one to five bedrooms plus a 20 metre pool, gym, Pilates studio, steam room, library, mini-cinema, dining room and restaurant that will serve meals in the flats and dining room. The original building on the site was the Palace Hotel built in 1861 and the development will be in five styles – 1860s Italianate Renaissance; 1880s French Renaissance; 1880s French Beaux Arts; 1890s Queen Anne and contemporary. Apparently no security checks are planned on potential buyers and both the police and courtiers are happy with the scheme. Beckhams Plan Ahead Happy birthday to David Beckham who turned 40 on 2nd May. He received a great birthday present when his application to install air conditioning into his £31.5 million mansion in Holland Park was given the go-ahead. Never ones to stand still the Beckhams’ have now submitted plans to improve the outside space. The changes involve lowering the paving by 70 cm to “improve the relationship between the house and garden”; raise trellises and add a wooden Wendy House (no air con mentioned). Clooney Hits Problems Whilst the Beckhams’ celebrate there is less good news for George and Amal Clooney. As previously reported in Property Eye Clooney submitted plans to replace an existing outhouse in the grounds of their multi million pounds manor house in Sonning with a wooden pavilion to house a 12-seater home cinema, swimming pool and hot tub. But in official documents published on South Oxfordshire District Council’s website the planning officer comments that the proposed pavilion is “not appropriate to the riverside setting and would result in the refusal of the application”. In correspondence relating to the plan a council officer suggested removing this element from the proposals but the couple have instead opted for “a significantly smaller River House” of a size similar to the existing outhouse.A final decision on the plans is pending. Reaction to Election Result The return of a Conservative Government with a slim but workable majority surprised but mainly delighted the property world. Here are some of the reactions as reported in the press in the immediate aftermath of the result being confirmed:- Lucian Cook UK head of residential research at Savills’ expected that much of the demand held back during the pre-election period will flow back into the market over the next 18 months as the potential threat of a “mansion tax” on high-value homes is now removed. British Property Federation’s chief executive Melanie Leech stressed the need for a coherent plan to deliver increased housing supply; to follow through on the commitment to fundamentally review business rates, and also to take action to put in place the right infrastructure – including real estate – that will allow the country to thrive. She also voiced the need to have clarity and a clear timetable as soon as possible about the proposed EU Referendum to minimise uncertainty. Uncertainty over the EU referendum also worried CBRE head of UK research, Miles Gibson because most of his firm’s clients feel investment would suffer if the UK were to leave the EU. Another to pick up this theme was Guy Grainger, UK chief executive at JLL, who felt that most British businesses remain committed to a strong position within the European Union and will need to engage in the reform debate to see if a referendum can be avoided. However he also stressed that the continuity of the government’s main policy objectives for the past five years will be very helpful for investors and developers in the housing market which he expected to continue to grow in line with stronger economic prospects, particularly in the regional cities and the South East. Executive director at Douglas & Gordon, Ed Mead, is confident that the election result will restore overseas investor confidence in UK real estate assets, leading to a surge in capital values over the next five years. Countrywide chief executive, Alison Platt was happy that the clarity of the election result will lead to greater activity especially in the £2m plus markets. She also anticipated that the new government will turn its attention to addressing the lack of housing supply by honouring its pledge to boost house building through the provision of more affordable housing and more garden cities. Alan Brown, chief executive of house builder CALA Group, was emphatic that the election result is good news for the UK housing market because the Conservative party “ truly understands the intricacies of the housing crisis and is clear on how to address the UK’s chronic shortage of new homes”. He was pleased that the distraction of the election is now out of the way but wanted the new government to further enhance some of their key policies, without the need for coalition negotiations. Particularly a renewed focus on speeding up the clearance of planning conditions while encouraging local authorities to bring forward more developments to increase the housing supply in their communities. Not enough Bricks and Brickies As we’ve previously reported in Property Eye there remains a shortage of bricks and bricklayers and the position is not improving. A state-of-the-trade survey by the Federation of Master Builders (FMB) discovered that over half of small and medium-sized construction companies continue to find it difficult to recruit bricklayers and twice the number find it hard to recruit skilled labour compared with a year ago. The survey also discovered that there continues to be a long wait for brick supplies with 62% of builders waiting for up to 2 months; 25% up to 4 months and 16% over 6 months. Commenting on the shortage of skilled labour the chief executive of the FMB said “The next government must ensure it sets the right framework in terms of apprenticeship funding and standards”. Builders dismiss politicians’ new homes targets Aspirations of the main political parties to build significant numbers of new homes have been dismissed as unachievable by house builders surveyed by Knight Frank. 67% claim that the maximum build could not exceed 180000 per year. This compares with targets of 200,000 (Conservatives and Labour), 300,000 (Lib Dems) and 1,000,000 over the next 10 years (Ukip). Housing experts believe that a minimum of 240,000 new homes are required each year to keep pace with demand. Builders and developers can’t get anywhere near that figure because of the shortage of skilled labour, limited development funding, lengthy mortgage processes and delays in processing planning applications by local authorities. Maybe one solution could be the introduction of an American style build-to-rent sector in Britain as suggested by the Better Renting for Britain campaign. The campaign which is backed by not-for-profit housing associations, publicly quoted companies (including British Land), pension funds and corporate investors have written an open letter to the next government calling for a greater focus on promoting build to rent through single companies owning large portfolios of homes with the long-term occupier in mind. They also want local authorities to identify how much rented housing they need and then allocate land to it and for planning laws to recognise the difference between building for rent and building to sell. Retrospective Legislation – Landlords Read This……. If you are a landlord and took a deposit from your tenant before 6th April 2007 then as a result of back-dated legislation you must take action before 23rd June 2015 to place that deposit into one of three government backed deposit schemes. The three schemes are the Deposit Protection Scheme (free but no interest paid on the deposit); MyDeposits and Tenancy Deposit Scheme (both impose a charge of up to £24 but also pay interest on the deposit). Landlords must also provide tenants with “prescribed information” (which can be downloaded from the websites of the deposit schemes) which explains the deposit protection scheme and information on the tenancy. Take action now if you have not complied with both of these requirements or be liable for a penalty of up to 3 times the deposit. Betting on Property Investment Nigel Payne the former boss of Sportingbet has become chairman of K&C REIT and is raising £6million on AIM as an investment vehicle specialising in central London property. K&C REIT is a real estate investment trust that plans to build up a £500 million London property portfolio and offer a tax-efficient exit strategy for homeowners looking to sell up. New Stately Home to be built in Cotswolds Property tycoon Jamie Ritblat is mid-way through building an 18th century style mansion at his farm near Winchcombe, Gloucestershire. The mansion will have a main house comprising 11 bedrooms, billiards and cinema room, gun storage area, wine cellar and servants quarters, a kitchen wing with roof terrace and an underground swimming pool. The grounds will include a boules pitch, croquet lawn, tennis court and fruit cages. North South Divide Whilst the London property market showed double-digit growth in the year to March (up by 11.3%) prices fell in the North East by 2.9% during the same period. The big divide in the fortunes of home-owners in London and the South East (also up 11.3%) and those in the North East is now obvious. An increasing number of Northern families are trapped in negative equity (i.e. the value of their property is now less than the amount of mortgage they have borrowed). Figures from the Land Registry also reveal that the overall average price of a home in the UK fell by 0.8% in March to £178,007 (compared to a peak of £181,049 in 2007) while the annual rate of growth slowed to a 13 month low of 5.3%. In January the number of properties trading for a price in excess of £1 million fell by 19% to 851 compared to 1049 a year earlier. This is fuelling speculation that pre-election jitters about the possible introduction of Labour’s “mansion tax” are slowing the market. A view that is supported by reports of sliding sales from estate agents Countrywide and Foxtons and a drop in approvals for home loans in March down to 61,341 from 61,523 in February. Overseas Investment in London Property

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Crossrail Potential

crossrail potential

London property deals with Crossrail potential,  features as one of our property updates from this week’s press.

Celebrity Watch

Actor Jamie Dornan

Fifty Shades of Grey star Jamie Dornan and wife Amelia Warner, aka musician Slow Moving Millie, have sold their Gloucestershire holiday home for £500,000. The three-bedroom, semi-detached Cotswold stone cottage, which had been on the market since May, features a quirky monogrammed wall in the kitchen.

Wes Brown’s Property Woes

Sunderland footballer Wes Brown and his wife, reality TV star Leanne Wassell, have been struggling to sell their five bedroom house in the village of Prestbury, and have now reduced the price by £1m down to £2.95 million. The well-appointed house has a cinema, an impressive indoor pool and spa and is a short distance from fellow footballing icon Wayne Rooney.

Apple of his eye?

Apple design guru and celebrated technology designer Ross Lovegrove, is selling his unique West London pad for £12 million. The three-bedroom property has eco-aware technology throughout and is adorned with unique design features such as, a dramatic spiral staircase and large open-place rooms filled with light, plus a roof terrace.

Profit for Pamela Skaist-Levy

Fashion designer Pamela Skaist-Levy (founder of Juicy Couture) and her husband, film director-producer Jeff Levy, are selling their Thirties-built Beverly Hills manor house for £32.8 million.. The couple bought the eight-bedroom, 10-bathroom home in 2005 for £11.4 million from former Ticketmaster CEO Fred Rosen, so they stand to make a very healthy profit.

manchester property

Is Manchester the new London?

London aside, no region has embraced the private rented sector (PRS) more than the North West. Plenty of city-centre developments in Manchester and Liverpool have been planned since the start of the decade but now many are actually beginning to rise out of the ground.

This has led one leading market professional to claim that Manchester “is starting to act like a mini London”.

Although Mancunians may object at being seen to follow the capital’s lead Steven Verity, senior director, at CBRE’s Manchester office goes onto say “Traditionally there used to be places such as No.1 Deansgate [a luxury high-rise developed in 2002], which was the epitome of where everyone wanted to be but now people want to live in certain parts of the city centre, not because it’s a better or a worse place, but because of their lifestyle which means that rents are derived from the quality of a scheme and its facilities rather than its immediate surroundings, allowing scope for PRS developments right across the central zone”.

There are now a plethora of Manchester schemes either underway or on the starting blocks with initial investor backing but the PRS effect is “spreading out across the Manchester-Liverpool megalopolis”, according to David Ramsdale, residential research analyst at Cushman & Wakefield.

Although Liverpool’s PRS market does not match Manchester’s in size, with 730 units currently under construction over three sites, its first major scheme, the Keel, Moorfield and Glenbrook’s £30m redevelopment of a former HMRC building, is close to completion and flats are now being shown to potential tenants. Liverpool is also the location chosen by Vista UK Residential Real Estate Fund (the UK’s first investment fund solely for PRS) for its first investment a £50m, 324-bedroom scheme in the city’s Baltic Triangle.

Outside of the two main cities the market is already moving into surrounding satellite towns including plans for 100 residential apartments in Chester but developments are likely to be smaller and potentially aimed more at downsizers with visiting families.

It does seem that PRS is in the North West to stay and as more schemes deliver and investor confidence grows so more schemes are likely to follow.

Public housing

Labour poised to back public housebuilding drive

A new report issued by Shadow housing and planning minister John Healey argues that it is not possible to meet the country’s housing needs “without a substantial and sustained programme of public house-building”. He argues that in the long run the benefits of more public homes will outweigh the upfront costs of building them and also reduce the housing benefit bill.

Criticizing the last five years of coalition government as a “failure for housing with higher rents, more homelessness, less home ownership, and fewer homes built” the report predicted that by 2020 if current trends continue average deposits will have reached £76,000; there will be 508,000 fewer homeowners than in 2010; renting will be £3,500 more a year, costing an average of £11,500 annually;  and 74,000 families will be made homeless a year.

Healey said: “Ministers spent the last parliament blaming Labour. This won’t wash now. The Tories have their own track record in government, which is five years of failure.

“Their five years of failure on housing means worry and misery for millions of people now struggling with the cost of housing crisis – higher rents, more homelessness, the lowest rate of home ownership in a generation, and fewer homes built than at any time since the 1920s.”

London Deals Including Crossrail Potential

Ealing

Thackeray Estate has added a potential £40m of value to its existing £300m portfolio following a range of completed site acquisitions and exchanges across London including the planned conversion of a 21,000 sq ft commercial site in Ealing into a 150,000 sq ft residential scheme.

Other big transactions include the acquisition of a 25,000 sq ft site in Hammersmith, the sale of a 7,000 sq ft Edwardian building, planning permission for a commercial to residential conversion in Southwark and a mixed-use development scheme comprising 17 private residential apartments in Chelsea with a projected value of more than £30m.

Charles Thompson, director at The Thackeray Estate, said: “Recently we’ve been focused on optimising the development potential of a number of sites in our growing portfolio. To gain planning permission for these two sites has significantly increased their value enabling us to develop high quality product in these two key London areas.

“While adding value to our current stock, we’ve also been busy acquiring new sites. The site in Ealing is an exciting prospect due to its prominent location, which is boosted by the imminent launch of Crossrail in the area”.

Wandsworth

Workspace Group has exchanged contracts for the acquisition of a former Mecca Bingo site in Wandsworth for £26.1m. The site adjoins Workspace-owned Riverside, an existing 100,000 sq ft office and workshop building with a rent roll of £1.2m. The combined site provides nearly six acres of land with significant redevelopment potential, including residential.

It is located close to Earlsfield station, which is one stop from Clapham Junction, a current mainline and proposed Crossrail 2 interchange station.

(For more information on Crossrail see https://thehomecloud.co.uk/blog/buying-property-on-the-crossrail-route)

This deal increases the number of Wandsworth properties owned by Workspace to four including a recently completed town centre mixed use redevelopment and the launch of The Light Bulb, a new 52,000 sq ft business centre.

Jamie Hopkins, chief executive of Workspace, said: “This is a hugely exciting purchase for Workspace of a site we have been tracking for some time. It provides the opportunity to create a major employment hub in Wandsworth, complementing the schemes that we have already delivered at Kennington Park and The Biscuit Factory in Bermondsey. We look forward to working with Wandsworth Council and the local community on the redevelopment of this strategic site.”

London propety deals

Battersea Park

Arnaud Touret has acquired two adjoining Victorian properties near Battersea Park at values which are thought to exceed the record for the area of £2,000 per square foot. They will be redeveloped into super-prime mansions and both are expected to be worth £13m-£15m after redevelopment.

The site overlooks Battersea Park on the south bank of the Thames and is only three minutes from Chelsea.

Fulham

Press reports suggest that Ptarmigan Land is seeking a developer to build 237 homes at Albert Wharf, either through a partnership or an outright sale. It is rare for such a riverside site with planning consent to become available and the Wandsworth Bridge Road site is one of the few remaining residential riverside development opportunities in south-west London.

As competition from developers for Thames side sites remains fierce offers are likely to exceed £60m for the 3.6-acre site which is currently home to a CEMEX concrete batching plant and includes three riverside wharves. The developer will need to provide 87,000 square feet of space beneath the flats to allow the cement plant to remain on the site.

The proposed scheme will comprise four buildings ranging from five to 13 floors with flats and commercial and retail space, a Thames path and a jetty.

This will be part of a wider redevelopment of the Fulham riverfront into a residential strip and will be adjacent to a 463 flat development at Fulham Wharf and opposite the Hurlingham Retail Park, which is being converted into 242 homes.

More Investment in the Student Market

The Student Hotel (a hybrid student housing and hotel brand) has received a €100m (£74m) equity investment from APG, the asset manager for the Dutch pension fund ABP which raises the equity capacity of the Student Hotel group to €250m.

The Amsterdam-based group which currently operates more than 2,750 rooms across six cities plans to invest more than €600m in the coming three to five years and will focus on leading European university cities including the UK in a bid to attract international students, young professionals and youth travellers.

Its ambition is to create a €1bn core real estate portfolio, totalling more than 10,000 rooms by 2020.

“We think that the European student housing market offers a very compelling investment opportunity,” said Robert-Jan Foortse, head of European property investments at APG Asset Management.

Tesco

Tesco looks at site disposal

Tesco, Britain’s biggest supermarket, is negotiating to sell a £250m portfolio of 10 residential sites in London and the South East to Meyer Bergman. The portfolio which includes sites in Woolwich, Kensington, Barnet and St Albans (mostly with planning consent) has a capacity for 4,000 residential units and an end value of more than £1bn, according to Euro Property.

Because of declining sales Tesco announced the closure of 43 stores in January and also cancelled 49 development projects and is now looking to use its land bank for residential development instead.

Councils decline approval for 1/5th of all office to residential applications

Councils in England have declined approval for 20% of recent office-to-residential applications, according to analysis  of government data by Property consultancy Daniel Watney  (the first national overview of office-to-residential applications since planning laws were relaxed in May 2013).

The report shows that between April 2014 and June 2015, 916 of 4,887 applications for conversion through permitted development rights (PDR) were refused on ‘prior approval’ grounds across England. In London, 493 of 1,959 applications roughly a quarter were blocked. The average for other cities was one in 10.

Although PDR allows office-to-residential conversions to be carried out without a planning application, developers still have to seek prior approval from councils where certain other planning consents, such as transport and highways issues, contamination and flooding risk, are required.

Charles Mills, partner at Daniel Watney, warned that councils should not misuse the prior approval process as a “workaround” to veto conversions.

The research found that Bristol has approved the most conversions at 54, while Brighton and Hove has rejected the most – turning down 12.

In London, Richmond upon Thames, has had the greatest number of applications at 208, refusing 74 and approving 134.

statistics

Statistics of the Week (thanks to Property Week Magazine)

This week’s vital residential stats

£8,250 is the amount the government’s Help to Buy scheme has pushed up the average house price, according to Shelter.

6.7% is the proportion of Help-to-Buy sales in the North East – the highest level of any region.

£3.4bn is the rise in mortgage lending in August – the biggest monthly increase since spring 2008, according to the Bank of England.

71,000 are the number of mortgage approvals in August, the highest level in 18 months

4.2% is the rise in house prices in England and Wales in August, the slowest month since November 2013, according to the Land Registry.

17% is the fall in sales of properties of more than £1m in August, when compared with the previous year, according to the Land Registry.

Contact Us

If you have any comments on any of the above or would like more information about buying, selling, renting, letting or finding a property please get in touch via our website thehomecloud.xenacia.com

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