Record number of first-time buyers opts for fixed-rate loans
The Council of Mortgage Lenders’ monthly survey reveals that 85% of first time buyers chose a fixed rate deal in January. According to CML, this is the highest figure on record. Also, just over 70% of home movers also decided on a fixed rate product.
CML believes that the higher interest rates have led to this. “It is encouraging that increasing numbers of first-time buyers are looking into the payment certainty a fixed-rate mortgage provides, as they are the group that are more financially stretched and may suffer most if interest rates go up”, says Michael Coogan, CML’s director general.
Overall, fixed-rate mortgages accounted for 72% of all new loans in January - the
highest proportion since January 2006 - up from 69% in December.
The average interest rate of a fixed-rate loan in January was 5.27%, up from 5.23% in December, which is attractive when compared to the average interest rate of a discounted variable-rate product which reached 5.54%, up from 5.36% in December.
Coogan says: “Each month it seems that the prospect of another interest rate rise is balanced on a knife edge. More and more borrowers are protecting themselves against this risk, and choosing the certainty of fixing their monthly mortgage payments, which allows them to plan ahead with confidence.”
Largest ever investment by the Koreans into the UK’s property market
South Korean architectural property development company, CODA, has announced it is to build an £80m residential development in what is believed to be the first Korean property investment of this scale in the UK.
It is being backed by a consortium of UK and Korean banks and investment funds to deliver Harbour Square, a residential development planned for the £400m SA1 waterfront scheme in Swansea. According to Andrew Davies, Enterprise Minister for the Welsh Assembly Government, it is the largest single investment in SA1 to date.
“The fact that SA1 is being developed by the Welsh Assembly Government and that we will be engaging directly with them has created a huge amount of confidence amongst our investors and provided the assurance they needed”, says Hoshik Chi, chief executive of CODA.
Miles Thomas of global property consultancy Knight Frank, who acquired the site on behalf of CODA, says: “The continued demand for residential accommodation in Wales is the driver for increased investment at home and from abroad.
“This, coupled with a relaxation in South Korea’s laws regulating the purchase of property abroad, means that similar organisations may now look to Wales’ strong property market as a route to invest”, he concludes.
The development will consist of twin structures comprising of 406 apartments, including a percentage of affordable housing as well as car parking and seven retail units on the ground floor. The project is due to start in October 2007 and should be complete near the end of 2009.
£25m development of disused nursing home
ASRA Greater London Housing Association, a subsidiary of LHA-ASRA, has been given the go-ahead for a £25m development, turning a disused nursing home in Plumstead, south east London, into ‘affordable’ homes.
It was granted planning permission by Greenwich Borough Council for the 20-storey Elmsgrove House Project. New homes will include four bedroom duplexes as well as one, two and three bedroom apartments. Work is due to begin in July 2007 and should be complete in March 2009.
Rona Nicholson, director of London at the Housing Corporation says: “The regeneration of this key site into new affordable homes will transform both the appearance and quality of the surrounding area and provide more housing choice for local people.”
The development will include 50% ‘affordable’ housing and outright sale and commercial space with two areas of commercial floor space. “It is the first step in the regeneration of Plumstead and once completed, Elmgrove House will help re-establish the area as a coherent business and retail centre”, says Mukhtar Latif, development director of LHA-ASRA. The new development will be located opposite Plumstead Rail Station, and has 11 bus routes within 400 metres.
83% oppose development in local areas
Around 83% of NIMBYs (Not In My Backyard) oppose development in local areas, according to The Saint Consulting Group’s newly released annual survey of the public’s attitude to property development in the UK.
Topping the hate list in The Saint UK Index is landfill at 81%, whereas the most desired development with 79% of the vote is schools. It also shows that 27% of the London region welcomes new developments, but only 8% of the south west support new complexes. In addition, one in six UK residents has actively opposed a planning application while only 7% of Brits have ever supported a development.
Nick Keable, managing director of Saint Consulting UK says: “Those engaged in development across all property sectors need to stop moaning about how councils refuse their applications. They need to understand public opinion and then react to it by changing the way they operate.”
The survey questioned 1,000 people throughout the UK in January and February 2007 in what the company describes as the only survey of its kind. It records attitudes to different types of development, provides a breakdown by country/region, shows people’s attitudes to the planning system and tackles public opinion on out-of-town retail, green belt development and zero carbon homes.
Total commercial activity rises to 61.2
According to Savills’ Commercial Development Activity PMI report, conducted by NTC Research, the total commercial activity index rose to 61.2 in February, from 51.4 in January. Around five times as many panel members (27.9%) reported an increase in activity as those that signalled a decline.
This is supported by raising levels of public (18%) and private sector (34%) development in February, with rates of growth above their respective long run averages. Mat Oakley, head of Savills’ commercial research department, told PIN: “We started the survey when the market was very quiet in 2003. If we started it in a boom time, the reflection of the period would be more serious.”
February data reveals that eight of the nine areas of commercial property covered by the survey increased in activity. The sharpest rates of growth were in private sector new build and refurbishment activity from January’s figure of 58.2 to February’s figure of 63.8.
“Private sector office development continues to be a major driver of the development market, and this looks likely to continue over the short term”, said Oakley.
In addition, higher levels of commercial development were broad-based across all three geographical areas monitored by the survey in February. Out of London, the rest of the south east and the rest of the UK, the latter was the most prominent. In January ’07, its index was 56.5 and it has risen to February’s figure of 66.8. Panellists also indicated that commercial development growth in London and the South East eased from the previous month.
Oakley told PIN: “A ripple effect has occurred. London and the south east have been stronger for a while, so the rest of the UK is now catching up.”
Peel puts Liverpool on the waterside map
Peel, owners of Mersey Docks and Harbour Company and Liverpool John Lennon Airport, has unveiled plans to ‘put Liverpool in the same league as other magnificent waterside cities that are famed worldwide.’
It plans to invest £5.5bn to transform the 150 acre site that stretches from Princes Dock in the south to Bramley Moore Dock in the north into Liverpool Waters. The scheme will include 21m sq ft of development comprising of a mix of residential and commercial space. The company is also responsible for plans to transform the Wirral Waterfront with a £4.5bn investment.
“There is no reason why Liverpool cannot be in the same league as other magnificent worldwide waterside cities, as Peel has the vision, the resources and the expertise to deliver”, said Lindsey Ashworth, development director at Peel. “The developments at the Wirral and Liverpool will see the area become the ocean gateway to the North West.”
Peel’s total investment in Liverpool between the two projects is more than £10bn, which the company claims is the largest investment of this type in the North West in over a century. An outline planning application will be submitted within the next 12 months, although the projects are likely to take up to 30 years to complete.
Dover rockets into the market with £50m makeover
Dover District Council has been given the go-ahead for a £50m makeover of the St James area in Dover’s town centre.
Plans for the Dover Town Investment Zone were submitted by developer Bond City. The development includes an 85,000 sq ft food store with 35,000 sq ft of additional shop and restaurant space, a 100-bedroom hotel, 53 ‘affordable’ homes and a new 600 space car park.
Tim Ingleton, Dover District Council’s transport and project manager, told PIN: “It is the start of a very interesting time for us here in Dover. It provides opportunities for further development in and around the area, and will kick-start a fully fledged regeneration programme in Dover.”
The South East England Development Agency has agreed a grant of £7.5m to assist in the development. Dover District Council itself will contribute in excess of £750,000 to the project. Kent County Council is contributing £500,000 and English Partnerships have also expressed intentions to invest in the redevelopment of the area.
Ingleton said: “This will create a boom of investors. Traditionally Dover has been at the lower end of the market scale, but we are already seeing unprecedented levels of enquiries that otherwise would not have happened. This development will rocket Dover into the market.”
Subject to final agreements and approval from the Government Office of the South East, construction work could begin on site in mid 2008, and will finish in 2010.
