For the first time, detailed sales figures have been released for London’s iconic development, One Hyde Park.
The figures not only revealed world record pricing, but pointed to a strong super-prime market. While residential markets have been slowing around the world, super-prime markets have powered on.
Facts on One Hyde Park are that 40 of the available 80 units have exchanged, sales to date total in excess of £600m; average unit prices achieved are over £20m, equating to £4,600 sq ft although this rose from under £4,000 sq ft in 2006 to well over £5,700 sq ft more recently; sales volumes rose steadily through November to January and sales also reflected London’s global city status as multi-national buyers included British (20%), European (11%), Middle East (25%), Russian (33%) and North Americans (11%).
Liam Bailey, head of residential research at Knight Frank, said: “There has been considerable speculation regarding the achievement at One Hyde Park over the past 12 months.
“Not only has the development broken the £5,000 sq ft barrier, but prices for apartments with a park view have been steadily nudging towards £6,000 sq ft. While the credit crunch and the world financial market turmoil meant that purchasers held back from buying in September and October, by November there was a return of confidence, with sales beginning again and volumes at a five-month high.
“The fact that London has enjoyed a boom in top end property in recent years has been well reported. Since September, the prime market and the mainstream market have slowed, activity and price growth will slow further into 2008, but at the top end of the market there has been no such slowdown.
“In prime central London prices rose by a total of 26.2% in the year to the end of January 2008, a remarkable result, but prices for properties priced above £10m rose by over 36% in the same period. In the final quarter of 2007, when price growth for all property slowed considerably and prime central London managed only 1.4%, prices for the £10m+ bracket still managed 3.8%.”
Top 10 recession-proof boroughs in London
Richmond-upon-Thames , in the south west of the capital, tops the list of the 10 most recession-proof boroughs in London, followed closely by its neighbour, Kingston-upon-Thames, according to Knight Frank.
Its research took into account factors such as the affordability of housing, wage and unemployment levels, population growth and the qualifications of the locals. The average price for a property in Richmond-upon-Thames is £511,575 and Kingston-upon-Thames is £361,496. Classed as third on the recession-proof list was Bromley (£343,375), followed by Kensington and Chelsea (£774,361), Wandsworth (£482,337), Southwark (£367,306), Ealing (£364,832), Lambeth (£382,614), Greenwich (£282,045), and lastly Bexley £232,242. Eight of the 10 – with the exception of Kensington and Chelsea and Ealing – are south of the river.
Liam Bailey, head of research for Knight Frank, said: “This reflects the weight of demand, as well as population growth and earnings.”
Putting Wolverhampton on the map
Multi Development UK Ltd and Wolverhampton City Council have received confirmation that a large area of land in the city centre can be compulsory purchased to make way for a £300m regeneration scheme.
Hazel Blears, Secretary of State for Communities and Local Government, gave the council the go-ahead to compulsory purchase 72,000sqm of land to the south of the city centre for the construction of the Summer Row development. A mixed-use scheme is planned incorporating a shopping centre, cinema and leisure facilities, homes and a new underground car park.
Councillor Peter Bilson, Wolverhampton City Council cabinet member for regeneration and enterprise, said: “This is fantastic news for the ongoing regeneration of Wolverhampton. I feel that 2008 really is going to be a momentous year in the history of this city with several major regeneration schemes like Summer Row and the Interchange getting off the ground. It is certainly an exciting time to be living and working in Wolverhampton.”
The Secretary of State’s decision follows a public inquiry about the compulsory purchase order, held between April and July last year. The council and its development partner, Multi Development UK, gave evidence throughout the hearing that the creation of Summer Row was vital to the regeneration of Wolverhampton and future prosperity of the city.
New Star Asset Management sells its largest London office building
New Star Asset Management has sold its largest London office building in its UK property fund to Evans Randall for £127.5m at an initial yield of around 5.5%.
The profile fund manager has sold 60 Gracechurch Street to the west-end based investment bank following a strategic review of its UK Property Unit Trust which reviewed its large lot sizes in London and sought to reduce single asset exposure in the portfolio.
New Star Asset Management bought the building, which is Commerzbank’s HQ, in November 2006 for around £147m which reflected a yield of 4.75%.
Help! Landlords need somebody…
The National Landlords Association (NLA) has revealed it received a record number of calls from landlords seeking advice during 2007.
The NLA Advice Line, offering free advice to member landlords, received an average of 2,600 calls per month last year on a wide variety of topics. Throughout the year, this amounted to over 31,000 individual enquiries. The top five landlords enquiries included how to remove a troublesome tenant, queries about the tenancy deposit scheme, queries about housing benefit payments not matching the rent, student tenants and questions about licenses for Houses in Multiple Occupation (HMO).
David Salusbury, Chairman of NLA, said: “As there are more and more issues that landlords have to consider, it is unsurprising that record numbers are calling the NLA Advice Line for help. For some they are seeking confirmation of a certain course of action but for others they require more detailed advice. Most staff answering calls are also landlords and have years of experience to offer our member landlords who need some support.”
“Use March budget to ease housing market problems”, says NAEA
Stewart Lilly, president of the National Association of Estate Agents (NAEA), has called on Chancellor Alistair Darling to use March’s Budget to ease the immediate problems facing people in today’s housing market.
The NAEA has called for a revision to stamp duty as first-time buyers are being priced out of the market. The association also thinks Capital Gains Tax (CGT) should be revised to create a better incentive, thus enabling investors to buy and sell property more easily, creating fluidity and variety in the market.
NAEA has proposed a series of thresholds similar to income tax, so for example, for a property worth £250,000, the first £200,000 would be under the Stamp Duty limit, meaning Stamp Duty would only be levied on £50,000 at 1% (£500), Suggested stamp duty thresholds are 0% for up to £200,000, 1% for £200,001-300,000, 2% for £300,001-450,000, 3% for £450,001-1m, 4% for £1m and above and 4.5% for £2m and above.
Lilly said: “The Government needs to be aware that with inflation rising consumers need a helping hand. We would like to see a scale of stamp duty that reflects the house price inflation in recent years. We would also like to see a revision of CGT for buy-to-let investors who are fast becoming the back-bone of the private rental sector.”
Gross mortgage lending up in January
Gross mortgage lending rose to an estimated £26.5bn in January, up 11% from £23.9bn in December 2007, according to the Council of Mortgage Lenders (CML).
Typically, lending is lower in January than in December. Gross mortgage volumes are expected to be lower in the coming months following a fall in mortgage approvals towards the end of last year.
Michael Coogan, CML director general, said: “Gross lending held up well in January. However, there is considerable uncertainty in the housing market at the moment and we expect lending volumes to be lower in the coming months.
“It is likely that demand will be stronger for remortgages than for house purchases in the short term. Home buyers might be more inclined to transact if their moving costs were reduced and the Government has the opportunity to address this by raising stamp duty thresholds and cutting the rates of stamp duty in next month’s Budget.”
Tenants leave ‘bad vibes’ for landlords
Watch out for the unexpected when you move into a rented home, according to The Deposit Protection Service (The DPS).
Sex toys were the number one item left behind by departing tenants, followed by rubbish, rotting food, furniture/domestic appliances, cats, condoms, cannabis plants, dirty nappies, dead animals and pornographic videos.
Kevin Forth, client services director at The DPS, said: “More than 1,000 landlords across the UKwere keen to talk to us about the items that their tenants had left behind, which certainly reinforces the message of selecting the right renters from the very start of the lease. Cleaning up after tenants who have made a hasty exit is an unfortunate part of the landlord’s job.”
In addition, The DPS research exposed some other bizarre objects including pairs of false teeth, illegal immigrants, Nazi memorabilia, bed bugs, a pair of fake breasts, bomb making equipment with a large quantity of fertilizer, a wallet with £100 - ‘to help pay the bills we’ve left’ - and a milk bottle filled with blood, just to name a few.
Get the best from your auction
Auction Finance believes novice property developers snapping up bargains at auction are losing money by falling foul of planning regulations.
The company said there was a rise in the number of people buying unusual buildings at auction to turn into homes, but if planning permission cannot be secured this can become an expensive error.
Scott Hendry, new business manager at Auction Finance, said: “Auctions are a great way of picking up unusual properties. However, before jumping in and bidding for an unusual property to turn into a home, buyers should check the planning status of the site. This will avoid disappointment and the potential for an expensive mistake.
“A good proportion of properties that are auctioned for redevelopment will have had planning permission of some kind granted before they go under the hammer. This adds value for the seller and in cases where it has not been done it is worth enquiring at your local planning department to find out why before you decide to make a bid. This is an approach we often see from some of our more experienced clients.”
