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In Property Eye we provide a weekly roundup of recent property news items:-
If at first you don’t succeed………
After striving for 6 years TV and radio presenter Jamie Theakston has at last managed to sell his Grade I listed Tudor mansion in Ditchling, East Sussex having agreed to cut the price from £2million to £1.85million. Theaston bought the 4,300 sq ft 5 bedroom house in 2004 for £800,000 and it has been on and off the market since 2009.
Property Auction Houses Expecting Record Sales
Andrews Robertson is bullish about the prospects for its September auction in London and for the auction market as a whole as buyers look not just beyond London but also outside of the South East as a whole for value.
The residential and commercial auction will feature more lots than last July’s event, which raised £10m from 57 lots, reflecting a 91% success rate, its highest for the year so far. The average lot size was £353,576 and the largest sold for just over £1m.
While the success rate might dip slightly, the amount raised is expected to be matched or bettered, with a cluster of five blocks of flats in Southampton with a guide price of £2.5m being one lot in particular that is expected to appeal to bidders. It comprises 22 let residential units, each producing a rent of around £7,000 a year, and 22 ground-rent investments.
Investors continue to look outside the capital, said a spokesman for the auction house “People will invest where they can, because in London there is not enough supply. Southampton is very popular. There is a lot of investment going on there.”
He added: “The South East is still very popular, but now there are lots of people looking even further afield to areas such as the West Midlands in search of value for money.”
Savills is also confident that this month’s auction will outdo last September’s – and that one lot in particular will pique buyers’ interest.
The star lot in its circa 240-lot catalogue is a new-build nine-bedroom house on a 500-acre private island in Beauly, Inverness shire, offered with a reserve price of £3m by a private investor who commissioned the property in 2003.
It includes a library, a cinema and a private loch for trout fishing. There are a further seven bedrooms in other properties on the estate, which was once used as the summer home of former Prime Minister Sir Robert Peel.
“The quality and the detail are exceptional: it must be the best house built in Scotland in the last 50 years,” said Chris Coleman-Smith, director, national auctions at Savills.
He said there had already been strong interest in the property both from owner-occupiers and buy-to-let investors, and that he believed bidding would be competitive. “It cost an awful lot more than what the reserve is to build and finish it,” he said.
With around 240 lots, the September auction catalogue is significantly bigger than its 186-lot catalogue in July. That auction raised just more than £45m and achieved an 80% success rate. A total of 217 lots were offered in September 2014, when more than £42m was raised and 72% lots were sold. Coleman-Smith said “all the factors are in place” to beat last year’s total.
He also predicted strong sales at the lower end of the pricing spectrum. “The £150,000 to £900,000 market is very buoyant, and I don’t think there’s any reason for that to change,” he said.
Residential lots comprise around 80% of the catalogue and Coleman-Smith predicted that properties in the West Midlands and central London would attract particular interest.
Threat to House Builders
An EU proposal to include building industry debts in the high risk category for lenders threatens to prevent smaller lenders and building societies lending to house builders on commercially viable terms. The Bank of England has written to the European Banking Authority to request that the proposals are altered but if they go ahead as planned then small lenders will be forced either to withdraw from the market or charge considerably more which could lead to increased house prices. Either way it is another blow to the government’s hopes to double the number of homes built in the next five years.
West End Car Park for Sale
A prime West End car park is shortly coming to the market, clearing the way for a commercial or residential development.
The NCP-operated car park on Welbeck Street will be put on the market next year ahead of a sale that is likely to fetch more than £75m.
The car park is the latest in the West End to come up for sale as investors look to cash in on an upsurge in values for both office and residential.
The corner site is located behind Debenhams’ Oxford Street department store and close to Bond Street tube station and is expected to accommodate a 200,000 sq ft scheme.
Chance for first time buyers in South London
Affordable housing developer Pocket has exchanged contracts to acquire four sites in south London that will deliver 137 homes for first-time buyers. Three of the sites were bought from Lambeth council whilst the fourth site was acquired from a private individual and will be its first in Southwark, located just off the Old Kent Road.
In total, the sites are expected to be worth more than £60m upon completion. The homes will be sold to middle-income Londoners at a 20% discount to the local market.
“Both Lambeth and Southwark are vibrant boroughs with significant numbers of city makers, and we want to bring affordable home ownership to as many of them as possible,” said Nick Cuff, land director at Pocket.
The first homes are expected to go up for sale in mid-2016 with the project finally completing in 2018.
Retirement Homes in focus
Retirementmove, the UK’s only estate agent specialising in pre-owned retirement properties, is launching a new division in an effort to tap into the burgeoning new-build retirement market.
The new division, which will be launched next week will serve specialist retirement homebuilders catering for the over-55s sector.
“Since Retirementmove launched in June last year, business has boomed,” said chief executive, Richard Drew. “We have close to 200 pre-owned retirement properties on our books and some 3,000 people on our database – and that figure is growing all the time.”
The addition of the new-build division would ensure Retirementmove could offer a comprehensive, tailored and personalised service both to people looking for retirement homes and developers wanting to target their sales messages to the right demographic, he added.
BPF wants government to encourage private developers to build care homes
Central and local government should encourage private developers to build care homes for the UK’s ageing population, the British Property Federation (BPF) has urged.
In a recent paper, the industry body said that an increased provision of care homes could relieve pressure on the NHS and help cash-strapped local authorities to save funds.
It said local authorities should include a provision for homes in local plans, allow a preference for development of care homes in certain areas and allocate specific sites for development of care homes near hospitals.
“The property industry is ready to deliver the care homes that will be needed to ensure our elderly population can live in an environment where they are comfortable and cared for,” said Melanie Leech, BPF chief executive.
The collapse of UK care home provider Southern Cross in 2011 hit the reputation of private sector provision. But the BPF said occupied beds cost the NHS £250 a day and 61% of these are taken up because elderly people are waiting for space in a care or residential home.
Calls to “open up” the Green Belt
According to a survey carried out by Property Week nearly three quarters of senior industry figures think planning restrictions on the green belt should be relaxed to enable the development of new homes,
The survey posed two questions to 125 senior figures in the residential property industry:-
Should the restrictions on the green belt be relaxed to build new homes – 66% answered yes – relaxed in certain areas, 24% no, 8% yes – fully relaxed and 2% don’t know.
Should the government set mandatory housebuilding targets for councils – 46% yes and with penalties; 22% no and 5% don’t know
In answer to supplementary questions 72% of respondents thought the current generation of children would be unable to afford to buy a home before they are 40, while only 26% thought those children would prefer to rent, rather than owning a home.
Residential Developer swoops to buy townhouse
Residence One, the luxury residential developer run by brothers Benjamin and Nicholas Wilson, has swooped to complete the acquisition of the leasehold of the six-storey Grade II-listed townhouse in Chester Square London for £10.5m.
The purchase, which exchanged in the weeks before the UK general election, reflects a price/sq ft of £1,406 – the lowest paid for a property on the square in many years.
Residence One plans to transform the property into a luxury residence complete with a spa pool, steam room, gymnasium and cinema room, expanding the size of the property to 7,467 sq ft.
Maidenhead Regeneration Project Approved
A £230m project to redevelop the 3.3-acre Broadway site in the centre of Maidenhead has been approved by the Council. The project, which will consist of five new buildings framed by Broadway, Queen Street and Kind Street, including 225 apartments, and more than 600,000 sq ft of new offices and 48,000 sq ft retail is expected to be completed by 2019, in time for the arrival of Crossrail.
Loss of Office Accommodation Continues
The trend for UK cities to lose office accommodation to residential and particularly student accommodation is strongly evidenced by the example of Cardiff where Carnegie Developments paid £432,500 to turn the Courtyard in Letty Street for conversion into student accommodation.
Price Premium of being near a good school
There tends to be a premium on house prices in the catchment areas of the best-regarded schools and a recent survey of more than 4,500 parents, by Santander Mortgages, found that one in four had moved to be within a catchment area, with those who moved paying an average premium of £32,127 for an address near a desirable school.
Evidence suggests that competition for homes in defined catchment areas for schools that achieve good results can be fierce which in turn underpins price growth, resulting in a noticeable differential in pricing between homes close to schools and those further away. For example local agents in Edinburgh suggest that property prices in the City are totally driven by schools — state and private, with many parents sending their children to state schools in the early stages and then switching to private later.
Those who are struggling to secure a home close to a school may want to keep an eye on areas where applications are being submitted for new schools. The government has pledged to open 500 new free schools over the next five years.”
Agents in the southern commuter belt of Surrey, Sussex, Hampshire and Kent confirm that buying is very much driven by the location of railway stations and independent day schools. Large boarding schools, though, tend to have less effect on house prices.
Catchment areas can have an effect on the rental market too. Data from the Countrywide lettings index shows that rental premiums in good catchment areas tend to be smaller than those for purchases but are still not insignificant, with the average tenant living within half a mile of a school rated as “outstanding” paying 14 per cent more than one living farther away.
Land Prices Increasing
The price of UK urban development land has jumped by 3.2% in the second quarter compared to 1.6% in the first three months of 2015 according to Savills research. Annual growth now stands at 10.7%.
Greenfield land values rose by 0.9%, up from a 0.5% rise in first quarter. Annual growth for green field land now stands at 4%.
However as ever, the picture across the UK was varied, with high-demand, low-supply areas such as Manchester and Birmingham seeing increases in value contrasting with a fall in greenfield development land in parts of Devon, Cornwall and Norfolk
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