190mph double deck trains between London and Birmingham
A new high-speed rail line carrying double deck trains at 190mph between London and Birmingham could reduce the journey time to 45 minutes and allow direct services between the West Midlands and Paris, according to Greengauge 21, a group of rail industry leaders.
The new line, estimated to cost around £11bn, would connect with the Channel Tunnel Rail link just north of St Pancras station in London.
Passengers from Birmingham could catch Eurostar trains that bypass Central London and arrive in Paris in three hours or Brussels in two hours and 45 minutes.
The line could eventually be extended all the way to Manchester but, to reduce early costs, would initially connect with the existing line about 20 miles north of Birmingham.
Even with part of the journey limited to 125mph on the existing line, the journey time between London and Manchester would fall from two hours and 10 minutes to just 90 minutes.
Jim Steer, director of Greengauge 21 and former head of strategy at the Strategic Rail Authority, said the line would eliminate the need to continue the 30 flights a day between Heathrow and Manchester. The line, which would take up to 15 years to plan and build, would be designed to take double-deck trains like those on French high-speed lines. It would have a capacity of 16,000 seats an hour between London and Birmingham and a large proportion of the passengers would previously have driven between the two cities.
Properties in Central London rising by 33%
The best properties in Central London have risen by as much as a third in the past year, according to the latest Knight Frank report.
The research found this is the fastest rate of growth in the capital since 1979 and means that prices in central London are now rising faster than the wider UK market by almost three times, with Belgravia and Knightsbridge leading the way, charging £3,000 sq ft. Only Monaco is able to compete with London in these terms, the report claims, with prices of £2,190 per sq ft and New York, Hong Kong and Tokyo follow on at £1,600, £1,230 and £1,100 per sq ft respectively.
Liam Bailey, Knight Frank’s head of residential research said: “Our data reveals some indications that the market may well be close to its peak in London. A slight shift in demand and supply appears to be beginning which, if it continues, will begin to see a move away from a sellers to a buyers market. We believe that price growth will begin to become more subdued by late summer, but we still think that central London prices for property priced over £3m will grow by 20% in 2007.”
Growth in UK commercial sector slows down
Growth in the UK commercial property sector is slowing down, according to figures from the Investment Property Databank (IPD).
Total returns for May 2007 were at 0.71%, down from 0.86% in March. First quarter figures bring the 12-month return for commercial property down to 15%. The total return for the year ending December 2006 stood at 18.1%.
Malcolm Frodsham, research director at IPD, said: “It’s been inevitable that the strong inward yield movement had to end at some point, and the first quarter has seen only a modest inward movement in the sectors where investors can see strong future rental growth.”
BPF calls on the government to help retaliatory evictions
The British Property Federation (BPF) has responded to a Citizens Advice Bureau (CAB) report on retaliatory evictions by calling on the government to help the commercial property industry herald in a new era of better landlords.
The report says that thousands of tenants suffer run-down housing for fear of being evicted for complaining by unregulated landlords. CAB concluded that victims of retaliatory eviction should keep notes to be able to prove to a court that they had acted within their statutory rights as tenants (e.g. by requesting that repairs be carried out), and where this had been upheld the landlord would be prohibited from evicting the tenant for a minimum of six months.
The BPF believes that a middle ground needs to be found which stops any mistreatment of innocent tenants, but which also ensures that unruly tenants cannot use this as a loophole to remain in their occupancies. The federation is calling on the government to work with property developers to help encourage a larger level of institutional investment into the private rented sector.
Buy-to-let landlords confident in their investments
A survey conducted by Bradford and Bingley of almost 5,000 buy-to-let landlords across the UK has revealed that the vast majority of investors remain confident over the future of their investment portfolios.
The study revealed that 94% of landlords were expecting rents to either increase or stay the same over the next six months, which is a rise of 7% on figures released 12 months ago.
Investors with buy-to-let mortgages largely use their ventures as a way of recouping additional income, with just one in ten employed as a full-time professional landlord.
Andy Wiggans, director of mortgages at Bradford and Bingley, said: “Buy-to-let remains a popular market that attracts a wide spectrum of people from all walks of life looking for long-term capital growth or a means of supplementing their pension.”
House price growth slows down
According to Rightmove Research, growth in residential asking prices from mid-May to mid-June stood at just 0.8%, with annual price inflation rising slightly from 13.1% to 13.2%.
The monthly rise, while up on last month’s figure of 0.4%, came despite an increase in supply from sellers looking to avoid having to pay for a Home Information Pack, originally set to be introduced earlier this month.
Rising residential rents, according to ARLA
Rents rose for the fourth quarter running for each type of property, including detached, semi-detached and terraced houses and flats according to the Association of Residential Letting Agents (ARLA).
The quarterly survey says that as a result, void periods have fallen to an average of 24 days. Over two thirds of all agents in Prime Central London report rising rent levels, as do half of the agents in the rest of the South East. The proportion of agents reporting rises in the rest of the country rose from 33% to 35%.
Seven out of ten Prime Central London agents say there are more tenants than properties. This is the highest figure seen since the ARLA surveys started 6 years ago. In the South East, 10% more agents report demand is outstripping supply.
Meanwhile, the average capital asset values of rented houses rose during the past three months by 2.2% in Prime Central London and 0.3% in the South East. By contrast, they fell by 3.9% in the rest of the UK. Average rented house values ranged from £885,000 in Prime Central London to £229,900 away from London and the South East.
Rented flats did less well, with the average asset value across the country down by 1.3% for the three month period. Asset values for flats ranged from £501,000 in Prime Central London to £210,000 in the South East and just £153,000 in the rest of the country. However, flats showed a slightly higher gross return.
Despite the rising rent levels, the average weighted returns are down marginally from 5% to 4.8% for houses and from 5.1% to 5% for flats. ARLA believes this to be a reflection of continually rising house prices during the quarter.
Middle Eastern Investors Invade London
According to data from DTZ, the value of UK commercial property held by Middle Eastern investors has almost trebled in five years (£3.34bn in 2001) and now stands at £8.9bn. The average lot size for Middle Eastern investors is £59m.
Nick Edmondes, partner at Trowers and Hamlins which advises many Gulf-based funds, says: “Middle Eastern investors have come from being relatively small players in the UK property market five years ago to serious deal makers today.
“Middle Eastern investors are still building up their UK commercial property assets despite capital values already being high. They are confident that there is more capital growth to come and the prospects for rental growth in the city are good.”
According to Trowers and Hamlins, in the last year Middle Eastern investors have become the principal backers of several of the largest developments in Central London.
Two major skyscrapers planned for the City - the 288 metre 'Helter Skelter' and the 242 metre Heron Tower - have recently secured backing from Middle East investors and are due to begin construction shortly. One Hyde Park, a £1.5bn residential scheme, at which an apartment was recently sold for £84 million, is being financed by the Foreign Minister of Qatar.
New gross lending high
Gross lending reached a new May record of £30.6bn, according to the Council of Mortgage Lenders (CML).
The figure is up by 12% on April’s lending total of £27.4bn, and is 5% higher than the same month in 2006 (£29bn). However, the rate of year-on-year growth is not as high as we have seen in the first four months of the year – typically around 12-15%.
Michael Coogan, CML director general, said: “While today’s lending figure is a new record for the month of May it does indicate that the market is slowing down following the rapid and sustained growth we saw last year.
“Going forward we expect lending to ease as we progress through the year, but the market will remain in good shape. Although further interest rate rises will continue to dampen demand, we are still on course to meet our prediction of a record £360bn of lending during 2007.”
Steady demand for commercial property
Despite the booming London market, nationwide demand for commercial property has been steady over the last six months, according to the Confederation of British Industry (CBI) and property advisors GVA Grimley.
Over the next six months, growth in demand for commercial property is expected to pick up, returning to near the long-term average.
The twice-yearly survey of property trends which covers occupants in offices, shops, factories and warehouses reveals that over the last six months 22% of occupiers increased their property holdings while 20% reduced them. Firms are more optimistic regarding the next six months, however, with the balance expecting to increase the amount of space they occupy (+8%) close to the long term average (+11%).
Lai Wah Co, the CBI's principal economist said: “The outlook for the next six months is encouraging, with demand for commercial property set to pick up. While demand for office space is expected to improve, retail property occupiers expect their expansion to slow however, reflecting expectations that four recent interest rises will now start to restrain growth in consumer spending.”
Buy-to-let still going strong
According to Bradford and Bingley, residential rental incomes are set to grow over the coming six months.
This has been attributed to the influx of immigrants and the continued difficulty of getting on the property ladder. The survey found that the typical investor is male and aged between 36 and 45.
Andy Wiggans, director of mortgages at Bradford and Bingley, said: “Despite recent reports of a slowdown in the buy-to-let sector, our biggest ever survey of those at the heart of the market shows it remains strong.
”Buy-to-let remains a popular market that attracts a wide spectrum of people from all walks of life looking for long-term capital growth or a means of supplementing their pension.”
Recent interest rate rises, however, have made it more difficult to pay mortgages, which could pose problems for landlords with a significant portfolio, who will see their outgoings pushed up.
Unexpected house repairs cost £19.2bn in 2006
Repairs to UK property cost Britons more than any other unexpected household bills over the past 12 months, according to research from Abbey Savings.
Around 79% of Brits were hit with an unexpected expense over the last year, with 36% of respondents to a poll admitting that they had been forced to fork out more than £1,000 each time. Unexpected house repairs cost £19.2bn last year in the UK, an average of £1,206 for each of the 15.9m people affected.
Many Britons used credit cards and overdrafts to pay for unexpected bills and expenses.
Repairs can add to house prices, but those that are poorly executed can push them down dramatically.
