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Households are vulnerable
The Bank of England advises that nearly one third of households are vulnerable to a rate rise. Read about this and the week’s other property stories in our round up of recent press news.
Households are vulnerable
The Bank of England advised this week that nearly one third of households are vulnerable to a rise in interest rates. A 2% hike would mean that 31% of households would have to cut spending, work longer hours or increase their mortgage term. However the position appears to be improving because last year the corresponding percentage was 37% and the year before 44%.
New Stadium and Residential Development Planned
Brentford Football Club and property developers Prime Place, the residential development arm of Willmott Dixon, have secured detailed planning consent for a new 20,000 capacity football stadium, as well as 648 new homes, in Brentford.
The new stadium and seven new residential buildings will be located on a ten-acre site close to Kew Bridge and will comprise 304 homes for sale and 344 for private rental. There will be a mix of one, two and three-bedroom apartments plus facilities including a concierge service, private lounge/library and dining room, cinema, gym, and private landscaped gardens.
The developer also plans to improve the public areas including landscaping and greenery across the site, new pedestrian and cycle routes retail outlets and on-site car and cycle parking.
On completion of the stadium, Brentford FC will relocate from Griffin Park. Prime Place has already secured full planning consent to develop a further 75 two, three, four, and five-bedroom family houses for private sale on the Griffin Park site, including a memorial garden to celebrate the history of the football ground.
Cliff Crown, chairman of Brentford FC, said: “We are very pleased to be working with the Prime Place team who have a proven track-record of delivering high quality housing within a wider regeneration project.
“As well as creating a brand new stadium for our supporters and an attractive environment for visitors and local residents, this project will create jobs and opportunities for local businesses. We have an exciting future ahead of us.”
Southampton Development Planned
Inland Homes has signed an agreement with Southampton City Council to develop an 8.9-acre brownfield site to provide more than 380 residential units and a marine-based commercial development on the River Itchen.
This is just one of three development projects that the company has in hand because they have received planning permission for 95 residential units plus 4,000 sq ft of commercial space in Acton and submitted a planning application for more than 400 homes and 60,000 sq ft of commercial space in Aston Clinton, Buckinghamshire.
Stephen Wicks, chief executive of Inland Homes, said: “The group is on track to deliver another significant set of results for the current financial year. “Our strategy of focusing in southern England continues to position us strongly in our own market and we aim to take advantage of the current favourable economic environment to capture further opportunities.
Car Park Purchased for £24.8m
The student accommodation developer Urbanest has bought the 250 year leasehold interest in a car park on Miles Street, Vauxhall, from CLS Holdings for £24.8m and plans to develop a 454 room, 30 storey student building as part of CLS’s 1.58m sq ft Vauxhall Square development scheme. The sale proceeds were £3.2m higher than the car park’s book value at 31 December 2014.
Development of the student building is scheduled to start early in 2016.
Plans submitted for “tallest tower”
Great Western Developments and Sellar Property Group have submitted plans for the West End’s tallest tower, complete with a sky garden and restaurant.
The proposed development is on the site of the former Royal Mail sorting office in Paddington and comprises 100,000 sq ft of office space, with floorplates specifically designed to accommodate small-to-medium-sized industries, as well as 50,000 sq ft of retail and leisure space at Praed Street.
The current ramp leading to the entrance to Paddington station will be removed and the whole area in front of the station opened up. The developers plan to build a new and enlarged Bakerloo Line ticket hall and improve connectivity to the Circle/District and Bakerloo Line platforms.
Following the completion of the Crossrail link footfall through Paddington is predicted to rise considerably with more than 60 million people a year passing through the station by 2031.
Government announce de-regulation plan
Housing minister Brandon Lewis has announced a package of amendments to Housing Associations in the Housing and Planning Bill.
The main changes are the removal of the rules on how housing associations can spend income from sales; the introduction of a right for associations to charge higher rents to higher income tenants and a removal of the restrictions on associations to undertake organisational changes such as mergers, change in status, restructuring and winding up and dissolution
Speaking to the Communities and Local Government select committee, Lewis said the moves would give housing associations “more flexibility to manage their funds, to build more affordable homes and help more people into home ownership while insuring the historic grant is reinvested in housing as it was intended”.
Lewis will also propose tightening the regulator’s powers to appoint managers to housing associations, so they can do this where there are breaches of legal requirements, and a special administration regime to ensure creditors can recover their money in cases of insolvency.
Billionaire owner funds Mayfair scheme
Topland which is owned by billionaire Sol Zakay has provided £12m of acquisition and development finance for a 7,000 sq ft residential development in Mayfair opposite the American Embassy. The site which comprises three luxury duplex flats has an estimated gross development value of £30m. Zakay said the deal demonstrated the investment house’s continued commitment to funding high-end residential developments.
“Others in the market have fallen away but we remain committed to funding prime and super-prime residential,” he said. “For us location is critical and we know Mayfair and its strengths exceptionally well.”
BBC Manchester Site
Bruntwood and Select Property Group have announced their plans for re-development of the former BBC site on Manchester’s Oxford Road.
The development will consist of 617,848 sq ft of residential development; 390,000 sq ft of commercial space and 82,000 sq ft of retail and an events space.
A series of public consultations are being held this week ahead of submitting a planning application in January.
£120m raised for Private Rental Scheme
LaSalle Investment Management has raised £120m for its first UK PRS Residential Fund which it plans to use to build a diversified portfolio of high quality rental properties across the country with a mix of income producing and new-build assets. LaSalle expects to invest more than £500m in the sector within the next few years on behalf of its institutional clients, through the fund and other investment vehicles.
Alan Tripp, head of UK at LaSalle IM, said: “The sector is expected to become an integral part of institutional investors’ portfolios and holds a significant focus for LaSalle in the next few years – our long term ambition is for 10-15% of UK assets under management to be allocated to the build to rent sector.”
House Prices to Rise 50% in ten years?
A joint report from the National Association of Estate Agents (NAEA) and Association of Residential Letting Agents (ARLA) predicts that UK house prices and rents are set to rocket by 2025.
By then the average price of a UK house will have reached £419,000 and a staggering £931,000 in London.
By the same date average UK rents are predicted to increase from £134 a week to £171 an increase of 27% and from £234 to £314 in London – 34% extra.
Lower home ownership rates are also predicted with a decline in the percentage of the working population who own their own home from 62% to 55% in the next ten years.
The report also predicts that the proportion of private renters in the UK will increase from 20% of households in 2015, to nearly 29% by 2025.
It is this combination of a declining home ownership rate and resulting increased demand for rental properties that is a key reason for prices to be driven up.
David Cox, managing director of ARLA said: “Buying and renting a home is a giant step, and is out of reach for many. Rent costs are already growing at a rate that people are struggling to keep up with, and they’re due to become even less sustainable over the next decade – particularly when the new landlord tax sets in, which will put off many would-be landlords from entering the market. If we’re to see the property market lifted out of its current state, we need to help the rental market from top down as well as bottom up, ensuring landlords are not penalised for their choice of income, and they can in turn give tenants the best possible price and service they deserve.”
Mark Hayward, managing director of the NAEA said: “House prices are only going to go one way, and unfortunately that is up. For so many already priced out of the market, this is news aspiring house buyers will not want to hear. Ongoing house price inflation, combined with low wage inflation, tighter lending restrictions and a shortage of affordable housing, means owning a home will continue to be distant dream for many. Increased rental costs will also make it more difficult for current renters to save for a house deposit; as much of their income will be eaten up in rent.”
ARLA and NAEA agree that a drastic and immediate policy overhaul is necessary and have put forward the following recommendations:-
- The London Rental Standard scheme should be extended to the rest of the country; this would identify letting agents and landlords who maintain their properties to high standards and as a result improve the condition of private rental properties coming onto the market
- The government should continue its effort to revisit the idea of reducing the area of the Green Belt and set up a committee which would explore this possibility in detail.
- The Private Rented Sector Taskforce should have extended powers coupled with government debt guarantees which would encourage large-scale institutional investment into the private rental sector, creating more available properties and helping to bring rental costs down.
- The government should add construction sector occupations, such as bricklayers, to its shortage occupation list, making it simpler for employers to hire non-EU nationals.
- Longer term, the government should incentivise firms in the construction sector, to offer more apprenticeships and training programmes.
- The government should form an advisory body in the form of an independent housing policy committee, which is not directly elected.
- The government should offer a stamp duty exception to pensioners looking to downsize their property.
The groups stated: “Our simple plea before the election was ‘Britain deserves better’. Since the General Election, the government has pledged to solve the acute problems facing the property industry, aiming to build one million new homes before the end of this Parliament in 2020. But words simply aren’t enough. The housing crisis Britain is facing is deep-rooted and if it is to be solved, it will require finance, suitable land, time, new skills and most importantly, the appropriate national regulation of the key stakeholders, not least the estate agents and letting agents that form our membership. We are calling for change – and it needs to happen soon.”
New Development in Stratford
A new development just 400 years from the Olympic stadium has been given the green light.
The 2.5-acre site which currently consists of 93,000 sq ft of light industrial space has secured planning consent to provide 200 residential units, including a mix of townhouses, apartments and 17% affordable housing, and a new 34,000 sq ft business centre.
Jamie Hopkins, chief executive of developers Workspace who have secured the permission, said: “We are delighted to have been granted planning permission for a new business centre in Stratford and see this as great news for new and growing companies in the area, who will benefit from the new space we’re providing.
News has reached us that pop diva Mariah Carey is renting a Malibu beach house for the festive season, listed at £6,600 a night on Airbnb. The property has fantastic Pacific views, infinity pool, private gym, tennis court detached guesthouse and should the weather turn chilly, the master suite has an open fireplace.
The Home Cloud wishes you a Merry Christmas wherever you are spending it and a Happy New Year and we will return after the holidays with more information from the property world.
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.