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House Prices are to rise
House prices are to rise in the short term with many investors looking to buy before the increased stamp duty on buy to let and second homes comes into force in April. This and many more stories from the property world in our round up of this week’s press.
House prices are to rise
A report from the Royal Institution of Chartered Surveyors (RICS) showed that the number of properties for sale fell for the tenth consecutive month in November with the amount of stock now at a record low. Over the past six months demand has outpaced supply in all regions putting pressure on prices with the cost of a home rising at its fastest pace in East Anglia, the south east and east midlands.
House prices are to rise still further in the short term with many investors looking to buy before the increased stamp duty on buy to let and second homes comes into force in April.
Millions of empty houses
The results of a 2011 survey across Europe has identified that one in six homes is empty. Most of the unoccupied homes are in southern Europe but closer to home 16% of homes in five regions of western Scotland, 14% of homes in northwest Wales and over 10% of homes in Cornwall and the Isles of Scilly are unoccupied. Homes in the EU with only a single occupant have increased by 2% to almost 1/3rd of all residences.
Couple sell off buy to let empire
Fergus and Janet Wilson retired maths teachers who started investing in property in the early nineties have agreed to sell their 900 properties to a consortium of institutions and wealthy individuals from Arab nations for over £250 million. The couple previously sold 100 properties to Chinese and Indian buyers in June.
They started their empire by accident when buying a property at auction in the street where they lived but then caught the property bug, at one period in 2006 they were adding one property a day to their portfolio which is mainly in the Maidstone, Ashford and Folkestone area of Kent. Although they suffered a hit during the downturn in 2007 they have benefited from soaring prices over the past couple of years and decided that now is the right time to cash in on their investments.
Law Society Pulls the Plug on Conveyancing System
Oh dear another IT disaster for the Law Society!
Following on from the failure of two internal systems over the past few years that racked up millions of costs but provided very little benefit, the Law Society last week announced that it is abandoning Veyo an e-conveyancing system that was officially launched just six months ago.
Veyo was meant to be the solution that would drag the house buying process out of the dark ages and into the 21st century. Certainly anybody who is involved in the process whether solicitor, agent, buyer or seller would agree that there was a real need for a replacement to the existing nerve wracking and labyrinth process but sadly despite racking up a reported £11 million of costs the project has now been declared dead.
A profound failure of governance has been put forward as a primary cause with top executive Catherine Dixon (who to be fair did inherit the flawed project) coming in for particular criticism.
So the dark age of conveyancing is set to continue with no light now at the end of the tunnel.
New Garden Towns
The government has announced the sites for two new garden towns.
Didcot in Oxfordshire will have 15,000 new homes by 2031 whilst up to 35,000 new homes are to be built in new garden communities in North Essex.
The towns will receive £1.1m of government funding for initial work that will enable them to build the homes as well as new transport improvements, schools and community amenities.
Housing minister Brandon Lewis said: “I’ve been really impressed by the level of ambition and vision shown by Didcot and North Essex and their determination to deliver new sustainable communities.
“We are determined to support communities that are eager to boost the number of homes in their areas to meet local need and this money will help get work up and running quicker.”
Matthew Barber, leader of Vale of White Horse district council, part of Oxfordshire, said: “People right across our district will benefit from Didcot becoming a garden town. This will encourage jobs, better transport links, improved facilities and infrastructure for everyone.”
£100million investment in private rental sector
Gatehouse Bank, the London-based investment bank, has announced further investment of £100m to develop a portfolio of private rented sector homes across the UK.
The money will be targeted at areas including Merseyside, Manchester and Birmingham, the company said, and will be in partnership with Sigma Capital Group, a UK-listed residential and urban regeneration firm with which Gatehouse already has an agreement.
Gatehouse is predominantly owned by institutional and sovereign shareholders from the State of Kuwait, and the PRS initiative is the latest in a series of investments made by Kuwaiti investors to support initiatives championed by the UK government.
This investment is Gatehouse’s second PRS initiative and follows its investment in a £110m programme to build in excess of 900 homes in Greater Manchester and Merseyside, which Gatehouse launched with Sigma in the second half of 2014.
Fahed Boodai, chairman of Gatehouse, said: “Our activities in PRS are a major strategic initiative for Gatehouse and further position the firm as a leading provider of institutional-quality real estate investments.”
Graham Barnet, chief executive officer of Sigma, said: “Our partnership with Gatehouse positions us at the forefront of delivering PRS homes across the UK, and Gatehouse’s activities will provide further support to Sigma’s goal of building 10,000 PRS units in the coming years.”
Property Investment Fund exceeds £100million
The value of the Ground Rents Income Fund jumped in the year to September to more than £100m following £27.8m of acquisitions and a valuation gain of £9.19m – with the investor committing a further £6milion to future acquisitions.
Chairman Malcolm Naish said: “We have seen pricing move up significantly with RPI reviewable rents being in demand particularly. The traditional 25 year reviews with rents doubling have also seen a significant yield shift from around 6% in March 2012 to around 4% today.”
New Crowdfunding scheme launched
Pocket, the starter home developer, has launched a second mini bond through crowdfunding platform Crowdcube to help fund its developments. The mini bond which will trade as Pocket Land Bonds and offers investors a fixed return of 7.5% over four years, aims to raise £1.25m.
It is using crowdfunding alongside more traditional sources of finance. The Greater London Authority has recently increased its 10 year loan from £21.7m to £26.4m, to buy the land to build up to 4,000 affordable homes across London, while Lloyds has made available a £30m loan facility to fund construction.
Pocket co-founder and chief executive Marc Vlessing said: “Pocket continues to grow to meet strong demand for affordable housing among London’s city makers, and this bond is an exciting opportunity to support an alternative solution to London’s housing crisis and get a great return on your capital.”
Investment can start from £250 with the option to invest in further blocks of £250. At the end of the four year term, investors can either continue to hold the bond for another year on identical terms or choose to redeem them.
The first Pocket bond launched this spring and raised more than £1m.
Funding secured for Elephant and Castle development
Lone Star has secured a £133m development finance facility from Lloyds Bank and Wells Fargo for its Two Fifty One scheme in Elephant & Castle.
Consisting of a 41-storey residential tower and a six story office building, the development represents Lone Star’s first direct investment in London.
The scheme, located 50 metres from Elephant & Castle tube station, will provide 335 residential units and is due to complete in late 2017.
Robert Maddox, senior vice president, Wells Fargo UK commercial real estate said: “We are excited to support their first investment in direct development in London.”
Madeleine McDougall, head of institutional clients, Lloyds Bank Commercial Real Estate, added: “Elephant & Castle is an area with enormous yet untapped potential and we feel that Two Fifty One will help to unlock some of that. This transformative scheme will act as a catalyst for major regeneration.”
Go ahead for London scheme
Northwood Investors has been given planning permission for the demolition of First Chicago House, 90 Long Acre, London, and to replace it with offices and 119 residential units.
The existing office building, which was constructed between 1979 and 1981, comprises eight storeys, lower and upper ground floors and a two-level basement car park.
Westminster Council last week signed off plans for a new 179,000 sq ft seven-storey office building fronting Long Acre and a residential building of eleven storeys, which will include some affordable housing.
There will also be 37,000 sq ft of retail space at the ground floor level.
New development planned in Peterborough
Weston Homes has acquired a psychiatric care building called the Gables at the former Peterborough District Hospital to develop a £19m residential scheme comprising one and two-bedroom apartments and three, four and five-bedroom houses.
Construction at the Gables is set to begin in early 2016, with a new sales and marketing suite due to open in spring 2016.
“We plan to build an array of high-quality homes, including apartments ideal for first-time buyers and generous family homes,” said Bob Weston, chief executive of Weston Homes.
Grand plan proposed for Edinburgh
A development consortium comprising local based companies, Murray Estates and New Ingliston, and a joint venture set up by Frogmore and Salmon Harveste has submitted a planning application to the City of Edinburgh Council for the creation of a £700m commercial and residential development on 90 acres of land in Edinburgh.
The scheme will be business-led and the first phase will start in 2017 if planning is granted. This will create around 2.25m sq ft of built space, of which 1.3m sq ft will be commercial. The consortium said that the development will regenerate currently “unproductive” land and would attract more than £700m of onshore and international investment with several thousand construction and more permanent jobs created over a 30-year period.
“Everyone is aware of the diminishing levels of grade A space in the city centre, which in turn is leading to higher rents on Edinburgh Park,” said Jestyn Davies, director of Murray Estates. “International Business Gateway should help to ‘balance’ rental levels for quality office accommodation in Edinburgh, which is essential to attracting both investors and tenants.”
The masterplan safeguards a westward extension of the tramway to Newbridge while less than one mile to the east, a rail/tram interchange station is under construction.
Martin Dalziel, director at New Ingliston, said: “It is extremely unusual, with a proposal of this type and of this scale, for high-end transport infrastructure to be already in place and fully operational before the first turf is cut. The seamless link the trams provide to Edinburgh Park the central business district and both main railway stations will in itself help generate investor and occupier interest.”
He added that a second phase of development would be added at a later date.
And also in Edinburgh…..
The University of Edinburgh has bought a former surgical hospital building which it plans to renovate into a new hub for business and to build a further phase of 500 apartments in the existing residential development at Quartermile.
Paul Curran, managing director of Quartermile Developments, said: “This is an excellent opportunity for Quartermile and the City of Edinburgh. The Surgical Hospital is a fundamental part of our development masterplan of 29 buildings. It is a magnificent building which has always been used for teaching, so it is apt that its primary use will be for learning.”
Professor Sir Timothy O’Shea, principle at University of Edinburgh, said: “We are very excited about the acquisition of the old Surgical Hospital and its potential. It will enable us to expand our outstanding teaching facilities and help us consolidate our position as a world-class university that is accessible to the wider community.”
10% increase in new homes expected
Housebuilder Bellway said its reservation rate in the 18 weeks from 1 August to 6 December had increased 12% year-on-year to 165 homes a week. The strong start to the year led the group to forecast its total completions for the full year to the end of July 2016 will rise around 10% year-on-year, from the 7,752 it completed in its 2015 financial year.
Chief executive Ted Ayres said: “The group is committed to its strategy of creating shareholder value through disciplined volume growth and increasing the supply of much needed new homes. The group continues to trade well and is favourably positioned to continue delivering volume growth, whilst maintaining a strong focus on return on capital employed.”
Who will re-design Houses of Parliament?
The government has revealed the nine shortlisted parties which have been selected to progress to the next stage of the procurement for design and programme management services for the overhaul of the Palace of Westminster.
The selected shortlist for the architectural and building design services are
Allies and Morrison,
Building Design Partnership,
Foster & Partners and
Whilst for the programme
Development of greenfield sites
, project and cost management services the list is
Aecom and Mace in a joint venture,
Capita Property Infrastructure and Gleeds Cost Management in a joint venture,
CH2M Hill UK,
EC Harris and
Turner & Townsend
The decision is expected to be made in the coming months, and work is scheduled to start in 2020 or 2021.
Controversy over Government’s plans to relax Green Belt restrictions
In a controversial move the government has unveiled plans to loosen restrictions on the green belt to enable the development of thousands of new low-cost homes for first-time buyers.
A consultation on the plan, published by the Department for Communities and Local Government last week, said the proposal would allow local areas to identify “small sites” within their green belt for housing with the definition of “small” to be determined locally.
“We consider that the current policy can hinder locally-led housing development and propose to amend national planning policy so that neighbourhood plans can allocate appropriate small-scale sites in the green belt specifically for starter homes, with neighbourhood areas having the discretion to determine the scope of a small-scale site,” the consultation stated.
The consultation, which closes on 25 January, also said that previously developed sites within the green belt could also be made available for the development of housing, in the same way that brownfield sites elsewhere are brought forward for new housing.
“We arehousing, to reduce the need as far as possible to release other land,” the consultation said.
“This could potentially include some brownfield land that sits within the green belt that already has buildings or structures and has previously been developed.”
This move which will help the government’s plans to provide 200,000 starter homes over the course of this parliament was welcomed by developers but slammed by the Campaign to Protect Rural England (CPRE) who argued that it would allow housebuilders to cherry pick greenfield sites instead of developing brownfield land.
“This consultation is really concerning. Instead of addressing the current difficulties in bringing forward the right sites for the right homes, it proposes to release yet more land for development, often in the countryside and possibly in the green belt,” said Paul Miner, CPRE planning campaign manager.
“The current policy isn’t working, but these proposals will make things worse.”
Singer Joe Jonas makes £200k
Joe Jonas has sold his three-bedroom Los Angeles home after only a year for £1.93 million, making £200,000 on the deal. The singer, who recently split from model Gigi Hadid, is currently renting a house through Airbnb (listed at £1,663 a night) while searching for a new place.
Astrologer to sell home
Queen of the stars, London Evening Standard astrologer Shelley von Strunckel, is selling her King’s Cross home for £3.5 million. The three-bedroom, two-bathroom apartment is on the fourth floor of a historical canal side building, with brilliant views across Battlebridge Basin and Regent’s Canal to St Paul’s Cathedral, the Shard and the London Eye.
Britney buys into luxury estate
Britney Spears has bought a £4.6 million villa in Thousand Oaks (an exclusive enclave which was originally developed by Hollywood stars Bruce Willis and Sylvester Stallone). The five-bedroom, seven-bathroom residence enjoys panoramic views over the surrounding mountains and also has a tennis court, infinity pool, spa and three hole golf course.
Frankie finds a buyer
At £300,000 less than the original asking price of £2.45million Frankie Dettori’s home has been snapped up for £2.15 million
After 17 years Frankie and his family have left their home at White Horse Stables in Stetchworth to move closer to family members and schools in Cambridge.
The five-bedroom Arts and Crafts-style low-rise property, once a cosy hotel favoured by the Queen Mother, has an entertainment area that includes a pool, sauna, games room and gym.
A two-bedroom cottage, stables and 15.4 acres were included in the sale.
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