According to Knight Frank, the new Mayor of London’s main pledges to residential housing in the Capital include help more Londoners afford their own homes, design developments with crime reduction in mind as well as protecting green spaces.
Boris Johnson’s housing manifesto contains several detailed policy pledges: release Greater London Authority-owned land and £130m from the Regional Housing Pot to launch a new ‘First Steps Housing Scheme’, which will be open to first-time buyers frozen out of Government schemes; work with the boroughs to build 50,000 more affordable homes by 2011; invest £60m from the Regional Housing Pot to start renovating the capital’s 84,205 empty properties to help low-income Londoners; incentivise the boroughs to release dormant housing to those stuck in bed and breakfast accommodation; work with local councils to deliver more family-sized homes and increase shared ownership schemes for low-income families by a third amongst others.
Liam Bailey, Knight Frank head of residential research, said: “The main policy areas being articulated surround the objective to improve affordability. There is a problem here, in that targeting one group over another in terms of access to housing or the receipt of subsidy does little more than shift the affordability problem around the population. Pouring subsidy into the system without raising development volumes will actually harm other groups by raising the cost of housing generally.
“The ambition of Boris to raise the volume of housing completions in order to ease London’s housing crisis is about to hit the market reality that over the next few years overall development volumes will be far lower than national and local government would ideally like due to market conditions. The number of year-on-year new build sales have been at least 25% lower so far in 2008, if purchasers continue to find difficulties in accessing mortgage finance, sale numbers will remain low and developers will not be encouraged to bring land forward for development.”
Prime Central London Index, property in prime Central London will weaken further
Key highlights include prices for housing in prime central London remain unchanged in April. The only properties that did grow in value were those priced between £2.5-5m and those over £10m, which increased by 0.3% and 1% respectively. Over the last 12 months, prime property prices have risen by 17.3%, less than half the rate seen at the height of the market in August 2007.
In addition, the ratio of achieved price to asking price has fallen over the last 12 months with an average of 96% of original sale price being achieved in April and in April 2007 the figure was 102%.
Liam Bailey, head of residential research at Knight Frank, said: “The Knight Frank ‘Prime Central London’ index for April provides further evidence of the weakening state of the flagship UK property market with poor growth across the board.
“Even though property in this elite category is now worth 17.3% more than a year ago this disguises the fact that we are now in the grip of a major housing market slowdown; in August last year home owners in this category were seeing growth at an annual rate of around 38%.
“Vendors are becoming more attuned to the more difficult market sentiment, although there is still some over ambitious pricing in the market. A year ago average achieved prices hit 102% of asking price, since then the relationship has reversed, with achieved prices only averaging 96% of asking prices – the lowest ratio seen since mid 2004.
“This is given added emphasis by statistics which show a rise in the number of days a typical property in this category stays on the market from launch to sale. While 12 months ago vendors could expect to see their property move through the market in just over a month (47 days), now the sale board has to stay up for around two and a half months (76 days).”
BPF calls NLA ‘absurd’ for criticising greater investment in rental housing
The BPF has responded to an ‘absurd’ press statement from the National Landlords Association (NLA), which criticised moves to encourage greater investment into rental housing.
The NLA’s statement suggested that it is in the interests of consumers to prevent competition in the marketplace. The association believes that moves to encourage branded rental would pose a threat to individual landlords. However, the BPF believes the continuing increase in demand for more homes and better rental standards is driving the need for a professional rented sector.
According to BPF, demand is currently insatiable for private rented sector property and promotion of institutional investment is vital at this time to continue to expand the sector, so that peoples' housing needs are met and rents are kept affordable.
Ian Fletcher, director for residential policy, said: “The BPF supports professional landlords whether they are small, medium and large and indeed has all in its membership. Whether a consumer chooses a small, medium or large landlord should ultimately be their decision and not dictated by the NLA or any other person or organisation.
“Continuing to promote professionalism in the sector at all levels and its expansion should ultimately be good for the whole sector. The BPF will therefore continue to promote an agenda, which logically supports choice, meeting housing need, affordability and expanding opportunities. The NLA on the other hand, seems to want to promote protectionism, which will lead to fewer choices, greater housing need and higher rents.”
EP launches new site developers’ scheme
English Partnerships has launched a new scheme aimed at making it quicker and easier for developers to bid for its sites. The national regeneration agency announced plans to develop a new pre-qualification scheme under EU law and is seeking comments on the details from the industry.
The proposed scheme - expected to be in place for sites marketed from October - will allow developers to supply pre-qualification information required under EU law on a one-off basis, rather than site by site. While individual site opportunities will continue to be advertised openly, developers accepted into the scheme will be able to ‘short-circuit’ the current process by submitting reduced levels of information when bidding for English Partnerships’ sites.
John Walker, chief executive of English Partnerships, said: “This move is a rationalisation of the way we do business, making our procurement process swifter and more cost effective. More importantly, it will speed up our decision making process by significantly reducing the administrative burden for both us and for housebuilders.
“In today’s difficult economic climate, we need to work even more closely with our development partners to ensure the Government’s housing targets are met, without compromising on quality.”
To join the scheme developers could be asked to submit information on financial standing, diversity, environmental sustainability and legal status.
Chelsea withdraws intermediary product range
Chelsea has withdrawn its intermediary product range after receiving a high volume of mortgage applications from brokers.
It said this has resulted in service delays and in order to ensure it continues to provide a high quality service to its intermediaries it has taken the decision to temporarily withdraw all of its intermediary products by close of business today.
In a statement to brokers, it said: “Our commitment to the intermediary market remains strong and we will be introducing new mortgage products for intermediaries on 9 th May.
“This will allow us to service the new mortgage business that is currently in the underwriting centres. We would like to apologise for the inconvenience caused during this period.”
Scotland’s 2012 Olympics loss of £315m
A new row has broken out between Holyrood and Westminster after Scottish ministers calculated that Scotland is to lose £315m to fund the London Olympics in 2012 - £165m more than first thought.
Governments in Edinburgh and London are already at loggerheads over £150m of lottery funds that are being diverted from Scotland to pay for the games. Now Scottish ministers claim the Treasury is to withhold a further £3m a year over the next five years to pay for the regeneration of the East End of London.
In normal circumstances, for any spending on services that are devolved, Scotland gets 10%. The funds are referred to as “Barnett consequentials”. Olympic money is being treated as a special case, however.
Recently, MPs accused the organisers of the 2012 games of being “willing to spend money like water”. From an initial estimate of £3.4bn, the official bill is now put at £9.3bn.
“ECAs must be expanded”, says BPF
The British Property Federation (BPF) has called on the Government to make better use of the Enhanced Capital Allowances (ECAs) scheme, designed to reimburse landlords for making existing buildings ‘greener’.
Speaking at a recent UK Green Building Council ‘Dragon’s Den’ event, the BPF joined organisations including Friends Of The Earth and the Empty Homes Agency to make a case for one type of incentive scheme to help ‘green’ the country’s building stock.
ECAs currently exist to encourage energy efficiency investment by the private sector in plant or machinery. The BPF believes the problem is that they do not cover investment in the actual fabric of buildings, despite the fact that this is where the most significant savings may lie.
Speaking at the event, Andrew Teacher, BPF spokesman, said: “The scope of ECAs must be expanded. In many cases, improvements to the building’s fabric – such as insulation or glazing - will hold the key to improving energy efficiency, particularly in minimising waste heat. Without incentives, many of the kinds of improvements necessary would take too long to offset against the savings they would create, which would be felt mainly by tenants.”
RTPI believes Planning Bill is moving too slowly
Urgently required action to reduce the risk of flooding may be delayed by the tardy progress of the Planning Bill, according to the Royal Town Planning Institute (RTPI).
Last year, a series of floods caused by a combination of heavy downpours and poor drainage caused £3.3bn of damage and severely disrupted the supply of utilities - including fresh water - to thousands of homes across the UK. The Environment, Food and Rural Affairs (Efra) Committee’s investigation into the flooding recommends that local authorities insist developers install Sustainable Drainage Systems (SUDs) on all new developments. SUDs are drainage schemes designed to imitate the natural progression of water, reducing the dangerous build-up of surface water which caused last year’s floods.
The RTPI backs the introduction of measures for SUDs but is concerned that the slow progress of the Planning Bill could mean it won’t gain Royal Assent before parliament rises for its winter recess. The RTPI believes, as a result, the bill will have to be carried over into 2009, meaning that at least 10 avoidable months of potentially damaging development would have taken place by the time the recommended measures are formally adopted.
Rynd Smith, RTPI policy director, said: “Last summer’s devastating floods were a graphic demonstration that immediate action was needed to improve surface water drainage. Efra’s recommendation to promote the use of SUDs to mitigate flood risk is welcome but the vehicle it has chosen to drive this agenda forward is in danger of stalling.”
Property searches carried out by both consumers and surveyors
Just under half of homebuyers (49%) believe an issue brought up by a property search would affect their decision to proceed with the purchase, according to a new survey by Land Data. In a similar survey carried out by Land Data only 8 months ago, the same question revealed just 30% believed it would affect their decision to purchase.
The increase is likely to be due to more information on property searches being made available to the public, along with greater media coverage on flooding, contamination and planning issues, which have all alerted the homebuyer to the importance of an accurate and comprehensive property search.
The Land Data poll also revealed that more than half of homebuyers read their property searches themselves (51%) and do not rely solely on their solicitor/conveyancer to do this for them. A large number of consumers questioned (46%) also said that they understood the difference between a personal property search and a Local Authority search.
Alex Fraser, chief executive of Land Data, said: “We are delighted to see awareness has increased over such a short period of time. It is important for consumers to be aware of the importance of property searches and to know how to use that information as part of a home buying decision.”
All commercial buildings need an EPC
From July 2008, commercial buildings with a smaller floor space than 10,000sqm of usable space will be required to have Energy Performance Certificates (EPCs) to demonstrate how energy efficient they are.
Currently commercial buildings with over 10,000 square metres of usable space are affected by the new legislation.
Sarah Dunkerley, Awarding Body for the Built Environment’s (ABBE) operations manager, said: “People are becoming more familiar with the idea of domestic energy assessment for homes, which the government introduced as part of Home Information Packs. The next challenge is to make people aware that commercial buildings now need these certificates too.”
More help to LAs for flood recovery
Floods Recovery Minister John Healey has said that all the extra money the UK is receiving from the European Union (EU) to help with flood recovery will be passed on to communities affected by last summer’s floods.
Healey announced that the Government was able to set up a Restoration Fund of almost £31m for English local authorities affected by last summer’s flood to support their efforts to rebuild their communities because of the success of the UK in bidding for the European Union Solidarity Fund. This money is the net receipt from Europe and is on top of up to £88m already made available to flood-hit areas to help them get back on their feet.
The new fund will be made available to local authorities, police authorities and fire and rescue authorities on the basis of costs incurred in dealing with the problems since the summer. Local authorities will be free to spend this money as they decide according to local priorities.
