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Archive for the ‘Real estate’ Category
Monday, September 5th, 2011
Housebuilder on track to hit profit target two years early as central London property market remains strong
London-focused housebuilder Berkeley Group will hit an ambitious profit target two years early, it said on Monday, as it provided further evidence of the UK’s two-tier housing market.
While house prices drift across the UK generally, upmarket builder Berkeley said it would now double profits in three years, rather than five.
The success of Berkeley is testament to the strength of the central London housing market – 70% of Berkeley’s land is within zones one and two. Equally, the lack of mortgage finance that has led to weakness in the broader UK residential property market affects Berkeley less since many buyers are from overseas, and pay in cash. Berkeley said in its most recent annual report that 50% of its customers do not require a mortgage.
The average selling price for a Berkeley property is around £300,000, twice the national average.
“Overseas buyers see London as a safe haven, and Berkeley has a reputation for good quality properties,” said Gavin Jago of Shore Capital.
Berkeley’s moves will be closely watched by those seeking to read the runes of the domestic property market, with the group credited with having successfully predicted the downturn, pulling back from land purchases at the right moment before the credit crunch took hold.
Berkeley said on Monday that it had purchased a further seven sites, and had secured better planning arrangements on sites in Battersea and Kew in London, North Bersted in West Sussex and Gillingham in Kent. In the four months to the end of August forward sales grew further, topping £850m.
Berkeley plans to return cash to shareholders through a series of large dividends rather than using the cash to expand.
Analysts at Numis said the positive outlook was “testament to the strength of market conditions in London and the south-east, well-timed investment in land and work in progress and Berkeley’s ability to add value through planning and sales. In our view, providing market conditions remain stable, the group has the potential to continue growing profits.”
The company could however be hit by the recent falls in stock markets if London is hurt, Citigroup said: “Investors and overseas buyers are major customers for Berkeley and any undue [sterling] turbulence and difficulties with rental markets may affect them more than the industry,” the broker added.
Investors voted in favour of all the motions at Monday’s Berkeley AGM, with the largest vote against being registered at the reappointment of Victoria Mitchell, the company’s deputy chairman.
Shareholders representing 11% of the companies shares voted against her reappointment. Mitchell has been a non-executive for nine years, regarded by some as too long a period in order to maintain independence. The company takes the view that she nevertheless adds a great deal of value.
Shares in Berkeley finished up almost 5% at £12.36.
Posted in Berkeley, Business, House News, London, Money, News, Property, Real estate, The Guardian | Comments Closed
Thursday, September 1st, 2011
The National Housing Federation has stated that it expects home ownership in England to fall to mid-80s levels, slumping to just 63.8% over the next decade (Minister vows to get UK building again as home ownership slumps, 31 August). But to address a critical shortage of homes the government has previously made the rather fanciful announcement that it aims to create 170,000 new affordable homes by 2015. In 2010-11 just 105,000 homes were built in England – the lowest level since the 1920s.
I’ve just had to abandon a major scheme that would have provided over 750 new homes, 25% of which would have been affordable, in an area of Essex that sorely needs them. This was because the amount of money the social landlords were initially able to pay for more than 180 homes was drastically cut as they in turn had their funding cut. This made the development untenable as I simply couldn’t afford to build 180-plus homes at a loss.
If the government is serious about increasing housing provision, it needs to recognise that cutting funding to social landlords is not going to help achieve that aim. Social landlords, in turn, need to start concentrating only on helping the poorest households, not mid-high income earners. Currently the rules are so arbitrary that for some affordable housing schemes you can earn as much as £60,000 and qualify for assistance. Others aren’t even means-tested, so you can earn £100,000 but still qualify for a handsome discount as long as you live or work locally.
Only by ending the inequity of a system that fails to address the needs of the poorest households, and freeing the housing sector from the myriad of red tape, taxes and levies that stifle development, will this country be able to get anywhere near delivering the number of new homes, both private and affordable, that it so urgently needs.
Bob Weston
Chairman and chief executive, Weston Homes
•?A well-aimed piece of PR spin from the National Housing Federation has managed to prompt a series of responses in your paper, mostly supporting the aim of the PR, that is to say support for a rapid increase in housebuilding. However, both the reported “facts” and the response need questioning.
1) The decline in home ownership was a projection based on the premise of higher price rises than is likely, given the need for “readjustment” in the housing market to historic links with earnings.
2) The current high rates of private ownership were only possible due to unsustainable reckless lending and borrowing.
3) One big attraction of home ownership is the free money many people have gained through rising prices. When prices are stagnant or falling, the high costs of home ownership may not be so attractive to young people who want to move around.
4) If enough houses were to be built to substantially reduce prices, many will be bought up by rich people and budding mass landlords, and many existing mortgage holders would experience high degrees of negative equity, exacerbated by the rise in interest rates that must happen sometime in the future.
5) As with other goods, it is not so much how many houses we have but how we share them out that is really important. It is the gross inequality in our society, more than anything, that is creating this problem.
Chris Savory
Bridport, Dorset
•?Allegra Stratton (Inside politics: Coalition fears it is unravelling right-to-buy revolution, 1 September) highlights the government’s unease at the burgeoning housing crisis and the low rate of housebuilding. In London, the affordable housing budget has been cut by two-thirds. Boris Johnson isn’t offering any new ideas to help private tenants suffering from record high rents. Nor has Boris offered anything new to reverse the rise in homelessness he had previously predicted. In 2008, Boris promised “a network of Community Land Trusts”, but not a single trust has been set up in London. The mayor needs to lobby for better protection for private tenants, and a realistic housing budget that can provide the low-cost social homes we need. In the meantime, he needs to put all his money and land into keeping rents as low as possible.
Jenny Jones AM
Green candidate for London mayor
•?The mayor of London, Boris Johnson, has long advocated community-led development and the benefits this can bring for building stronger communities.
Contrary to the suggestion in your article, the mayor has already determined that the community should hold the entire freehold of the St Clement’s site in Tower Hamlets in trust. He has also made clear that a community board should oversee management of the homes. This would make St Clement’s the country’s first urban CLT. The site is currently being procured on this basis, and the decision will be subject to the usual procurement rules. But it is clear that whoever is the successful bidder we intend St Clement’s to be held in trust, with the management overseen by the community.
Richard Blakeway
London mayor’s adviser for housing
•?Given the latest evidence that the UK welfare and housing system is failing to break the association between unemployment, poverty and homelessness (Homelessness could spread to middle class, study warns, 31 August), the time is now ripe for a Great Debate – one as “radical” and imaginative as the 1942 Beveridge report – on how to manage social and economic affairs in ways that meet the wellbeing of the many rather than the few. We could do with a quality broadsheet leading such a debate. Any suggestions?
Charlie Cooper
Lecturer in social policy, University of Hull
•?Not only is the current level of home owership even lower than the official figures indicate, but it is also declining at a much faster rate than forecast.
This is because up to three million homes included in the figure for home ownership are in fact leasehold, and leaseholders do not own their homes but merely have the right to live there until the lease expires. In order to stay in their homes leaseholders will have to pay large sums of money to the freeholder for an extension of the lease.
At the same time around half of all newly built homes are now flats, the majority of which are sold on a leasehold basis, reducing still further the proportion of households who will genuinely own their homes.
Nigel Wilkins
Chair, Campaign for the Abolition of Residential Leasehold
•?The key to the housing “problem” is the number of homes, not the proportion of owner-occupiers. There is inevitably a significant proportion of the population who at any given time would be better suited to renting than buying their homes. There is pressure to “get on to the housing ladder” for financial reasons; pressure that if you do not start early enough you will lose out financially. As a result the economy is driven by the housing market to an unfortunate extent. The key issue should be adequate housing to buy or rent. One simple – but probably politically unacceptable – measure would be to try to separate the concepts of a house as a “home” and as an “investment” by removing capital gains tax exemption from the principal private residence. The sky did not fall in when tax relief on mortgage interest was removed.
Paul Russell
Winchester
•?The National Housing Federation talks of the “chronic under-supply of housing” in the context of unprecedented developmental pressure on green spaces. However, markets are composed of supply and demand. England is the most densely populated country in Europe. Given that the UK is experiencing its highest rate of population growth for 50 years, with an estimated 10 million more citizens over the next 15 years, should we not also be talking about – and addressing – our chronic over-supply of people?
Simon Ross
Chief executive, Population Matters
Posted in Boris Johnson, Business, Communities, Construction industry, Homelessness, House News, House prices, Housing, Housing market, Letters, Liberal-Conservative coalition, London, London politics, Money, Politics, Property, Public sector cuts, Public services policy, Real estate, Society, The Guardian, UK news | Comments Closed
Tuesday, August 30th, 2011
• National Housing Federation says home ownership falling
• Group predicts house prices to rise 21% by 2016
• Rents forecast to rise almost 20% by 2016
• Call for more housebuilding to tackle crisis
The housing market is in crisis as home ownership tumbles and house prices soar, a study has warned.
Home ownership in England will slump to just 63.8% over the next decade – the lowest level since the mid-1980s, the National Housing Federation’s forecast, published on Tuesday, said.
Huge deposits, combined with high house prices and strict lending criteria, have sent home ownership into decline, the federation said.
The housing minister, Grant Shapps, admitted that “we have not been building enough homes”, but insisted the government was “in the process of reversing that through massive planning reform” and a “massive programme” involving the release of thousands of acres of public land to build new homes.
The National Housing Federation, which represents England’s housing associations, warned that the housing market will be plunged into an unprecedented crisis as it also forecast steep rises in the private rental sector and a house price boom. It blamed the bleak outlook on an under-supply of homes in the UK.
The chief executive, David Orr, said: “With home ownership in decline, rents rising rapidly and social housing waiting lists at a record high, it’s time to face up to the fact that we have a totally dysfunctional housing market.
“Home ownership is increasingly becoming the preserve of the wealthy and, in parts of the country like London, the very wealthy.
“And for the millions locked out of the property market, the options are becoming increasingly limited as demand sends rents rising sharply and social homes waiting lists remain at record levels.”
Shapps said the reason house prices had become so unaffordable was a tripling of prices in the space of 10 years from 1997 to 2007, which put them out of reach for many people.
Asked about the study’s forecast for future levels of home ownership, the minister said forward predictions were “hellishly difficult” to make and were “nearly always wrong”.
He cited a Halifax survey showing that house price affordability has been “improving quite dramatically” and that prices were more affordable than any time over the last 12 years.
However, he admitted there were significant challenges for first-time buyers and said the government had a responsibility to help home ownership.
Asked about the measures being taken, he told BBC Radio 4′s Today programme: “We are releasing enough government land to build Leicester twice over across the country – it is a massive programme.
“The new homes bonus is a multi-billion pound incentive to communities to build programmes, and we are hugely reforming the planning system, which is massively complex.”
He said thousands of pages of planning guidance and law were being boiled down to about 60 pages in a reform “that even the National Housing Federation, who have produced this report this morning, approve of”.
He added that he would be very disappointed if it did not achieve the goal of building more homes.
The federation forecast that, in England, the proportion of people living in owner-occupied homes will fall from a peak of 72.5% in 2001 to 63.8% in 2021.
In London, the majority of people will rent by 2021, with the number of owner-occupiers falling from 51.6% in 2010 to 44% by 2021, it said.
The north-east will be the only English region to see any increase in owner-occupier numbers over the next decade, rising marginally from 66.2% to 67.4%, the federation predicted.
Meanwhile, the average house price in England will rise by 21.3% over the next five years from £214,647 in 2011 to £260,304 in 2016, according to Oxford Economics, which was commissioned to produce the forecasts.
Average rents in the private sector are forecast to increase by 19.8% over the next five years, fuelled by high demand and a shortage of properties.
About 4.5 million people are currently on social housing waiting lists, but only those in the most desperate of circumstances have a realistic chance of being allocated a home.
The federation said that, in 2010-11, 105,000 homes were built in England – the lowest level since the 1920s.
Posted in Business, Communities, Construction industry, First-time buyers, guardian.co.uk, House News, House prices, Housing, Housing market, Money, News, Politics, Property, Real estate, Society, UK news | Comments Closed
Sunday, August 28th, 2011
Hometrack warned that there were signs that the balance between supply and demand was starting to shift, primarily from weakening demand
Alarm bells are ringing over the health of the housing market after Hometrack, the property data company, forecast steeper falls in prices this autumn – with the latest figures showing a 3.6% annual fall in August.
Hometrack’s prediction will fuel the view of bearish commentators that UK house prices are still some way from the trough, despite falls of about 10% since the credit crunch.
Richard Donnell, Hometrack’s director of research, said: “Weak consumer sentiment, pressure on household incomes and the uncertain economic outlook are likely to see demand weaken further over the remainder of the year. This is likely to accelerate the downward pressure on prices over the autumn months.”
Prices fell 0.1% in August for a fourth consecutive month, suggesting that the housing market has been in a temporary state of equilibrium with sellers and buyers having similar expectations over pricing levels. This has ensured that a steady flow of sales despite the weak economic backdrop.
Donnell added: “Furthermore, the proportion of the asking price achieved has been broadly static at about 93% for the past six months. This represents a sufficient discount to enable sales to proceed without headline price reductions.”
But Hometrack warned that there were signs that the balance between supply and demand was starting to shift, primarily due to weaker growth in demand for housing.
Its research shows that, so far this year, there has been a constant trend of prices falling across just over a quarter of the country, with price rises limited to a 10th of the market. But that picture could deteriorate in the months ahead as public sector job losses take their toll.
Donnell said that price inflation in parts of London had put a gloss on the figures for the first half of the year, and that once the “London effect” was eliminated, there was less scope for optimism.
He said: “The reality is that, against a backdrop of thin volumes, price rises in London … have limited the scale of [average] house price falls across the rest of the country.”
Properties in London take the shortest time to sell – six weeks – against more than 11 weeks in Wales, the north-west and Yorkshire & Humberside. This month, figures from the Land Registry put the annual fall in house prices at 2.15%, taking the average price of a property in England and Wales to £163,049.
The south-west experienced the greatest monthly rise in prices, with an increase of 2.2%, while the greatest annual price fall was in the north-east, with a decrease of 8.8%.
The Halifax on Sunday reported that the cost of buying a home for first-time buyers was now more than £100 a month lower than renting. The average monthly cost for the first-time buyer of a two-bedroom flat totalled £567 in July 2011, 16% (£110) lower than the typical rent on the same property type (£677 a month). By contrast, in 2008, the average cost of buying was 29% more than the cost of renting.
Since 2008, the cost of getting on to the property ladder has fallen by 40%, compared with an 8% drop in rents.
The decline in costs for first-time property buyers has been driven by lower mortgage rates and house prices in the past three years.
Suren Thiru, housing economist at Halifax, said: “While affordability gains are welcome, conditions in the housing market for those looking to get on to the property ladder remain challenging.
“Difficulties in raising a deposit and the economic uncertainty are likely to mean that the number of prospective first-time buyers entering the market will remain relatively subdued in the near term.”
Posted in Business, House News, House prices, Housing market, Money, News, Property, Real estate, The Guardian | Comments Closed
Saturday, August 27th, 2011
More than half the UK’s regions are now ‘blackspots’ for mortgage wannabes. Mark King looks at the knock-on effects for the entire market
Prospective homeowners continue to be forced out of the housing market, with “first-time buyer blackspots” covering seven out of 11 regions in the UK and half of all UK tenants expecting rents to rise in the next year.
According to property website Rightmove, only 23% of people who intend to purchase a property in the next 12 months are first-time buyers, when 40% is considered normal for a healthy housing market. This drops to 17.6% in the south-west and Wales and is below 20% in five other regions across England and Wales: Scotland, the south-east, East Anglia, East Midlands, Yorkshire and Humberside.
The website said the three top reasons were difficulties in raising a deposit (exacerbated by steep rental price increases); concerns over financial security (one in five first-time buyers said they were worried about meeting mortgage payments); and over-priced property values – a worrying seven out of 10 prospective first-time buyers told Rightmove they feel property is over-priced in their area.
The emergence of these blackspots, along with stalling wage growth, redundancies and stagnant mortgage approvals are pushing would-be buyers into the rental sector.
But in a report, to be published on Monday 29 August, Rightmove found more than half of people now renting expect their rent to be higher in 12 months’ time, with one in six of those believing it will rise by more than 10%. This comes on the back of a 4.2% rise in rents, according to LSL Property Services, over the year to the end of July, taking the monthly average to £705 (7.1% to £1,009 in London).
Despite rising rents, there is now more than twice as much rental demand for 12% fewer properties compared with April 2009, helping inflate the rental bubble.
Miles Shipside, director of Rightmove, said conditions for tenants continues to deteriorate, with inflation running at 4.4% and wage growth of 2.2%. He said: “Tenants’ pain is a landlord’s gain with a shortage of rental accommodation and continuing high demand further boosting landlords’ returns. The rental ceiling of what some tenants can afford appears to have some headroom left, despite disposable incomes being squeezed. While competition will help improve landlords’ rental returns, there are consequences to an over-inflated rental bubble.”
First-time buyers perform an essential function in the housing ladder by starting chains that help others to move. Shipside says this is now under threat: “The emergence of so many first-time buyer blackspots has serious implications not just for those who are unable to buy for the first time, but also housing markets in each of those regions. It is particularly bad news for first-time sellers, for example.”
Owner occupation rates peaked in 2003 at 70.9% after an 80-year period of growth, and have since declined to a level of to 67.4% in 2009-10 (the latest figures available). The growth in home ownership rates have now stalled, which is less an inevitable flattening out of a market that is close to its natural capacity and more a generational story that is not being told.
Matt Griffiths of first-time buyer website PricedOut said there is now a definite split in the age groups of those who own their own home. Between 1991 and 2009-10, owner occupation levels in the 16-24 age group fell 61% (36% to 14%), while owner occupation in the 25-34 group fell by 30% (67% to 47%). Home ownership in the 35-44 group also fell, by 14% (78% to 67%). But levels of owner occupation continued to rise in older groups. Between 1991 and 2009-10 the 65-74 group saw a 14% increase in home ownership (62% to 79%), while those aged over 75 saw home ownership rise by 38% (53% to 73%).
The percentage of young people getting a foothold on the housing ladder today is are clearly falling behind the number who managed it 20 years ago. Griffiths argues this decline is exacerbated by the growth of the private rented sector, with the rise of the buy-to-let market enabling those with existing housing wealth to “out-bid” potential first-time buyers for property.
The growth of the private rented sector is projected to continue to increase to 20% of households in 2020, according to the National Landlords Association, from 14% of households in 2008.
Griffiths says: “Unfortunately the unenviable position of generation rent is reinforced by the political dynamics of home ownership – older homeowners are a larger group, vote more and are much more vocal in defending their interests. Politicians therefore have been very reluctant to challenge the generational inequalities in the housing market and tiptoe round the problem.”
The statistics all indicate that government initiatives are desperately needed to help buyers get a foothold, but the FirstBuy scheme has been roundly criticised for assisting only a small number of first-time buyers.
“The government’s flagship first-time buyer scheme – FirstBuy – is a classic example of how to do close to nothing with maximum publicity,” Griffiths says. “It will only benefit 10,000 young people and will have no impact on the drivers creating generation rent. Nowhere is this more apparent than in the response to the credit crunch – where stopping house prices falling has been a major concern of government and the Bank of England. The pain of market readjustment is therefore now being felt primarily in the rental market – with younger people shouldering higher costs. Given this group was the major loser from the boom, this seems a bit unfair.
“Over the longer term, there appears to be a seriousness from some in the coalition to deal with lack of new homes via planning reform – and they will face stiff opposition from the grey vote even here. But the government seems to have implicitly accepted that, for the time being, there will be a lost generation of young homebuyers.”
Posted in Borrowing & debt, Business, Communities, House News, Housing, Housing market, Money, Mortgage lending figures, Mortgages, News, Property, Real estate, Renting property, Society, The Observer, UK news | Comments Closed
Tuesday, August 23rd, 2011
The housebuilder, whose brands include Charles Church and Westbury, said sales had climbed 4% over the last eight weeks while its order book is 10% ahead of last year at £1bn
Britain’s second-largest housebuilder Persimmon has seen a bounceback in summer sales, driven by the north, after a dip in the first half of the year. Shares in the York-based company climbed 3.4% to 396p, as it cheered investors by raising its dividend to 4p from 3p.
“The sales momentum in the northern business has been maintained – normally we see a slowdown in the summer months,” said Mike Farley, the chief executive. “We have seen some slowdown in the south and central [England],” after the south saw better sales rates in the first half.
“We need to see what happens in the autumn period when a pick-up usually takes place.” The autumn selling season should kick off from the second week in September.
“We’re not getting carried away, but the market is stable which is down to mortgage availability. Mortgage rates are very low, and low interest rates will be here for a while. We don’t see problems with affordability, it’s that lack of deposit.” But he noted that the average loan-to-value ratio [LTV] is 80%, against 75% a year ago, which means there are more deals that require smaller deposits from buyers.
The housebuilder, whose brands include Charles Church and Westbury, said sales had climbed 4% over the last eight weeks while its order book worth £1bn is 10% ahead of last year. This comes after a 5% dip in the first six months of the year, when Persimmon completed 4,439 homes, compared with 4,657 a year ago. It expects sales volumes to be flat over the year as a whole. The group made an underlying profit before tax of £59.7m in the first half, up 52%.
Shrugging off the gloomy economic news and financial market turmoil over the past few weeks, Farley said: “People would rather buy their own homes than rent – it’s cheaper to buy than to rent.” He said first-time buyers usually made up 15% of Persimmon’s visitors on site, but that number had risen to 23% thanks to the government’s First Buy scheme. Having secured a fifth of available funding (£35m), Persimmon has earmarked 2,100 properties on 290 sites around the country for sale with First Buy funds.
Paul Connolly, a director at project and at construction consultancy Turner & Townsend, said: “Housebuilders are in a more robust position than a year ago and continue to move in the right direction, but further challenges lie ahead. People buy houses when they feel confident and confidence is in short supply at present given rising living costs and the ever-present threat of unemployment. The fact that house prices are falling in most areas of the country also hits confidence and may even see people delay committing to a purchase in the hope of getting property at a lower price further down the line.
“On a positive note, there is increased competition among the lenders with some exceptional mortgage rates available at present, even at higher LTVs. While criteria remain tough, this will add to demand and drive transactions.”
The average price of a home sold by Persimmon in the first half fell nearly 4% to £162,647 because the builder sold more affordable homes, with an average price of £100,000, and more smaller houses with two bedrooms. This will reverse in the second half, as it has taken more orders for larger homes with three or four bedrooms, with an average price of £205,000.
Killian Murphy at Davy Research said: “Amongst the UK housebuilders, Persimmon is considerably better placed than its peers, with 43% of the landbank acquired following the downturn and only 13% impaired, and is virtually debt-free.”
Persimmon had reduced its debt to £15m from £51m at the end of 2010.
Posted in Business, Construction industry, Editorial, House News, Housing market, Money, Persimmon, Property, Real estate, The Guardian | Comments Closed
Friday, August 12th, 2011
UK taxpayers left £275m out of pocket after deal is reached by Olympic Delivery Authority
London’s Olympic Village has been sold to the Qatari ruling family’s property company in a deal that leaves UK taxpayers £275m out of pocket.
Qatari Diar, the oil-rich state’s investment arm, and UK property developer Delancey Estates teamed up to buy the athletes’ village next to the Olympic Park in east London for £557m.
After the 2012 Olympic Games, the village will be converted into a neighbourhood with 2,818 homes, including 1,000 family homeswith three or four bedrooms. The rest of the properties range from studio flats to five-bedroom apartments. The area will also include a schoolwith 1,800 places for children aged three to 19, shops, bars, clinics and parks.
The Olympic Delivery Authority, which sold the site, had already sold 1,379 of the residences in the 11 blocks of the athletes’ village to Triathlon Homes for £268m in 2009. They will become affordable housing such as shared ownership or socially rented apartments.
Qatari Diar and Delancey plan to turn the bulk of their share of the residences – 1,439 properties – into private rental accommodation, rather than selling them. They say this will create the first UK private sector residential fund of more than 1,000 homes to be owned and directly managed as an investment.
At the moment, the apartments in the village do not have kitchens as athletes will eat at dining halls. They will be fitted out for long-term residential use after the games when kitchens will be added and new floors put in. The first tenants are due to move in in late 2013.
The joint venture also acquired six adjacent development plots with the potential for a further 2,000 new homes. The deal includes a profit-share that should provide income to the public sector in future.
Jeremy Hunt, the culture secretary, hailed the sale as a “fantastic deal that will give taxpayers a great return and shows how we are securing a legacy from London’s Games”. The village cost £1.1bn to build, but the ODA insisted it never expected to recoup building costs. “It was an entirely empty site, it didn’t have any infrastructure, roads or parks. There was always going to be a public sector contribution to help put those in,” said a spokesman.
He added: “We weren’t just looking for the highest bidder, but for the best owner with long-term commitment.” He said the ODA supported the property investors’ plans to turn most of the residences into rental accommodation.
Jamie Ritblat, chief executive of Delancey, said: “This acquisition reflects the first truly great residential investment opportunity in the UK; offering the chance to break the mould and create a sustainable leasing model to provide first class accommodation for those who see the chance to rent long-term, as the way forward.”
The ODA had to dip into the Olympic contingency fund and use £324m of public funds after a private developer, Lend Lease, failed to put forward a funding package in 2009 due to the financial crisis. That money will now be repaid to the Olympic budget out of the village sale proceeds – this has been uncertain during the economic downturn.
Qatari Diar already owns the Chelsea Barracks site, which it bought from the Ministry of Defence in 2007, and it will redevelop the US embassy in Grosvenor Square, London, as well as the Shell Centre on the South Bank.
The Qatari property developer has been embroiled in a high-profile row over the £3bn Chelsea Barracks scheme, which recently received the green light two years after Prince Charles intervened over plans for the 13-acre site. In June 2009, the developer withdrew its planning application after the Prince of Wales wrote to its chairman, the prime minister of Qatar, saying his “heart sank” when he saw the modernist design by Lord Rogers.
Qatari Diar’s then-partner, the CPC Group owned by the Monaco-based property developer Christian Candy, launched a high court action to claim £81m in compensation after the scheme’s collapse. The architects behind the revised plans are Dixon Jones, Squire and Partners and Kim Wilkie.
Posted in Business, Communities, House News, Housing, Housing market, London, Money, News, Olympic Games 2012, Property, Real estate, Society, Sport, The Guardian, UK news | Comments Closed
Friday, July 29th, 2011
House prices have risen or remained unchanged for six of 2011′s seven months
House prices edged up by 0.2% in July, taking the annual shift in prices to -0.4%, a result of sluggish demand for homes combined with a gradual rise in the supply of available properties, according to Nationwide building society.
It said stability had been the watchword for the housing market during the last year, with the average price of a house now standing at £168,731. House prices have now risen or remained unchanged for six of 2011′s seven months, with the highest increase being 0.6% in February.
But Nationwide said the volume of transactions had remained at historically low levels in recent months. Only 204,000 housing transactions were recorded in the second quarter of 2011, the lowest number since the second quarter of 2009.
Robert Gardner, chief executive of Nationwide, said: “No doubt much of this reflects the uncertain economic climate. However, some commentators have suggested that there may be more fundamental factors at play, such as a trend away from owner-occupancy.”
Gardner said this could be the result of stretched affordability and strict lending criteria making it difficult for first-time buyers, coupled with younger households finding owner-occupancy less suitable for their needs.
“As the economic outlook brightens, labour market conditions strengthen and housing affordability becomes less stretched, so demand for housing should improve,” Gardner argued. “Time will tell whether a greater preference for renting will remain in evidence or the desire for home ownership once again asserts itself.”
Matt Hutchinson, director of the flat and house share website Spareroom.co.uk, might be of use: “The Nationwide talks of stability but this is little more than a euphemism for stagnation. With the exception of London, property transactions are at severely low levels due to the disconnect between buyers and sellers.
“Properties aren’t selling because what buyers are prepared to pay falls well short of what sellers are willing, or able, to accept. As Nationwide points out, the days of young couples buying their first home in their early 20s are all but over. Within a matter of years, we have transitioned from a culture of property ownership to property rental.”
In June, the Genesis Housing Association reported that the proportion of people who are homeowners had dropped from a peak of 70.9% in 2003 to 67.4% in 2009-10.
The group said, if the current trend continued, only 60% of the population, or 15.5 million people, would own their own home by 2025 – 1.9 million fewer than now, while about a quarter of households would rent their home from the private sector.
The Nationwide figures suggest prices are rising slower than the index from bank Halifax, which earlier this month reported prices rose 1.2% month-on-month in June, with the average home costing £163,049. The Nationwide announcement comes just a day after Land Registry figures for the previous month, showed house prices in England and Wales moving sideways in June.
Figures also released today from the Building Societies Association showing gross lending by mutuals in the first six months of the year totalled £10.2bn, up 20% on the £8.5bn lent during the same period last year. Gross lending by mutuals totalled £2.1bn in June 2011, up 16% compared with the £1.8bn extended in June 2010.
Adrian Coles, the director-general of the Building Societies Association, said: “Despite the evident weakness in the housing market, mutuals continued to strengthen their position with gross lending and approvals up 20% in the first half of the year compared with the first six months of last year. Mutuals continue to perform strongly in tough economic conditions, and are offering highly competitive products tailored to meet the needs of the communities in which they operate.”
The number of loans approved for house purchase climbed to a 13-month high of 48,421 in June from 46,418 in May and a four-month low of 45,804 in April, according to Bank of England figures.
But mortgage approvals remain very low compared with long-term norms. Howard Archer, chief economist at his Global Insight, said they averaged about 90,000 a month since 1993, while a level of 70,000-80,000 has in the past been considered consistent with stable house prices.
He said: “The Bank of England also reported that there was a net mortgage repayment of £0.1bn in June. This appears to be the consequence of current low mortgage activity and elevated repayment level, reflecting the desire of a significant number of homeowners to reduce their debt by paying off more of their mortgages.”
Posted in Blogposts, Business, First-time buyers, guardian.co.uk, House News, House prices, Housing market, Money, News, Property, Real estate, UK news | Comments Closed
Thursday, July 28th, 2011
Land Registry figures show the market is fragile but buy-to-let landlords are seeing healthy returns
Another day, another set of house price figures. According to the Land Registry, prices across England and Wales tracked sideways in June, reaching an average of £161,479 compared with £161,823 in May, taking the annual fall in prices to 2.5%.
London was the only region in England and Wales to experience an increase in prices over the last year (up 0.8%), but annual growth in the capital has now slowed to its narrowest since October 2009.
Wales experienced the largest monthly growth, with average prices there rising by 2.8%, followed by south-east England (1.3%) and the West Midlands (1.1%). North-east England experienced the greatest annual (-7.1%) and monthly (-2.1%) price falls.
From January to April 2011, the number of housing transactions averaged 42,733 per month, down from the same period last year, when sales averaged 45,509. Sales volumes have been relatively consistent over the past six months.
While most house price figures are merely white noise, offering little beyond a single snapshot of the market and failing to indicate a trend, at least the Land Registry figures are one of the more reliable barometers – they are based on actual registered property sales rather than approvals or even asking prices.
Nicholas Ayre, director of UK buying agents Home Fusion, said there was plenty in the Land Registry’s figures for “doomsayers to get their teeth stuck into” but warned against making rash judgments based on one single set of statistics. He said: “The data can be fickle. Just as your car’s fuel gauge becomes unreliable when the engine’s running on empty, so these figures have less value when the number of sales is so low.
“Outside London, demand has fallen off a cliff, and unsurprisingly, so have prices. At the top end of the London market, supply is limited and demand is booming and this is steadily driving prices up. Less fashionable areas appear more of a buyers’ market, with a big gap opening between asking and sale prices. And because there is more supply and fewer buyers, those looking to buy can afford to be pickier.
“For the country as a whole, the market is still desperately fragile. With lenders still reluctant to offer mortgages, and many who bought in the boom trapped in their current homes by negative equity, there’s little chance it will perk up any time soon.”
Some industry insiders are claiming the Land Registry figures are further evidence of a boom in buy-to-let, bolstered by statistics from Moneyfacts showing the number of buy-to-let mortgages available has hit 505 – the highest level since September 2008.
David Whittaker, managing director of Mortgages for Business, said the Land Registry figures “prove now is a golden period for landlords”. He said: “Property prices are stagnating but mortgage availability remains tight for owner-occupiers and demand for rental property is causing rents to soar. The yields available to landlords on buy-to-let property are very healthy indeed and offer much better rates of return compared with other investment or savings vehicles.
“We expect prices to remain flat for the rest of the year so landlords will be able to bolster their portfolios further over the next five months, taking advantage of the rental market and providing a safety net for those having to rely on the private rental sector for accommodation.”
How do you interpret the latest statistics? What are prices and rents doing in your area? Is it really a golden age for buy-to-let landlords?
Posted in Blogposts, Business, First-time buyers, guardian.co.uk, House News, House prices, Housing market, Money, Property, Real estate, UK news | Comments Closed
Thursday, July 28th, 2011
In the market for a new place, or even your first one? You’ll have plenty of questions and concerns, so why not put them to our panel of experts who will be online on Thursday
Despite yo-yoing prices, difficulty in getting mortgages and a lack of decent properties on the market, it seems lots of people are still desperate to either move house or buy their first home. Analysts are still predicting further price falls, but with record high rents, many first-time buyers believe now is as good a time as any.
Gross mortgage lending was up by 16% in June, although admittedly any increase was bound to look big against the low levels of lending in previous months.
So if you are planning to go house shopping this weekend, what should you look out for? Have you struggled to get an affordable mortgage lined up? Have you made an offer but the seller is being difficult? How do you go about getting the conveyancing sorted out? What sort of survey should you have?
We have three experts – David Hollingworth of mortgage broker London & Country, Martin Codd of solicitors Penningtons and the team at property portal Zoopla – lined up to answer your questions from 12.30pm on Thursday, 28 July.
Please post your queries below and make sure you come back to see their responses.
Posted in Blogposts, Business, guardian.co.uk, House News, House prices, Housing market, Money, Property, Real estate | Comments Closed
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