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Compensation package for home owners on UK high speed rail route confirmed
A package of compensation and assistance for property owners along the London to Birmingham High Speed 2 rail route (HS2) has been confirmed by the UK government. With immediate effect owner occupiers of homes and small businesses between generally 60 metres and up to 120 metres from the line in rural areas can submit an application to HS2 Ltd to purchase their property at the full, unblighted value under the voluntary purchase scheme. This is the value of the property as if there were no plans for HS2. As an alternative to the voluntary purchase scheme, these eligible property owners will also have the option to accept a cash offer of 10% of that same value and stay in their homes and businesses. Transport Secretary Patrick McLoughlin said that this will support people who want to remain in their community. Those beyond the 120 metre boundary but within 300 metres of the line in rural areas will, following Royal Assent of the Phase One HS2 Hybrid Bill, be able to apply for a home owner payment ranging from £7,500 to £22,500, which will enable them to share early in the benefits of the railway. Eligible owner occupiers living any distance from the line of route can now apply to the Need to Sell (NTS) scheme, which also pays the unblighted value to people with a compelling reason to sell their property, but who have been unable to do so, other than at a substantially reduced price, due to HS2. The criteria for the NTS scheme is more relaxed than the exceptional hardship scheme (EHS) it replaces and, unlike the EHS, will consider applications from those who may not need to move immediately. HS2 Ltd has also launched a residents’ charter to help ensure that residents are treated in a fair, clear, competent and reasonable manner. The Residents’ Commissioner overseeing the charter is Deborah Fazan who has considerable experience as a commissioner and property advisor on transport and construction schemes. In her new role, she will ensure that HS2 Ltd meets its commitment to the communication standards and personal support set out in the new charter. ‘This comprehensive package of compensation and assistance is looking after those people who live along the HS2 route while balancing our responsibilities to the taxpayer. People at the heart of this vital new railway will also benefit from HS2 Ltd’s new residents’ charter and the appointment of the Residents’ Commissioner, who will ensure that the commitments in the charter are upheld,’ said McLoughlin. Simon Crowther, HS2 Ltd’s land and property director, said it is important that those living near to the railway are able to easily access the financial assistance that the government is offering. ‘The residents’ charter sets out our commitment to making that happen. We will be working closely with the new Residents’ Commissioner to deliver the standards required, ensure that people are treated fairly and help them understand what they are entitled to,’ he… Continue reading
Investment in London commercial property market close to last peak in 2007
Investment in central London’s commercial property market reached £20.5 billion in 2014, marginally below the last investment peak in 2007 when £20.6 billion was traded, a new report shows. The huge weight of money flowing into the London real estate investment market from the UK and abroad looks set to continue in 2015 with the level of demand far outstripping the available supply, according to the data from global real estate adviser Cushman & Wakefield. A breakdown of the findings show that investment volumes in the City of London and Docklands reached just over £5 billion in the fourth quarter of 2014, the highest quarterly volume ever recorded in the market. The report says that the strong end to the year meant that the annual total reached £13.8 billion, which is the second highest on record behind the 2007 peak of £13.9 billion. Indeed, half of all investment volumes in the final quarter were as a result of three transactions in excess of £250 million each, which reflects the annual trend and 48% of all 2014 investment volumes were due to 10 transactions above this threshold. The report points out that increasing numbers of investors and surging volumes of equity are being invested into the City of London market with interest from a wide cross-section of investors, notably the world’s largest sovereign wealth funds. It also shows that overseas investors remain the most active in terms of transactional investment volumes accounting for 78% of both the fourth quarter and annual total. Asian investors dominated fourth quarter investment volumes but over the year North American investors have spent the most money in London. However, 2014 witnessed positive net investment from both Asia and the Middle East, while all other regions including the UK disinvested from the capital. Due to exceptional demand, the market yields are being driven down for all investments with prime at 4.25 to 4.5%, albeit several transactions have completed below 4%, notably the Gherkin. ‘We saw a strong City of London investment market in 2014 with international investors dominating acquisitions. The international appeal of London continues with an ever increasing spread of new global investors entering the market and there are no signs of an imminent slowdown,’ said James Crawford, Cushman & Wakefield’s head of City of London investment. ‘Deals from £1 million to £1.2 billion closed during 2014 and capital values hit an all-time high of over £1,400 per square foot at the Gherkin. The first half of 2015 shows all the early signs of a continuation of last year but we expect some profit taking to occur later in the year and uncertainty around the general election in May,’ he explained. ‘We estimate there is £250 billion of liquidity in the market available for direct investment in property and when this is combined with an improving debt market, a severe supply demand mismatch will be created,’ he added. The report also shows that the momentum recorded in… Continue reading
Prime country house price growth in the UK slowing, latest data suggests
Price growth in the prime country house market lost some of its momentum in the latter half of 2014, with property values increasing by just 0.5% during the second half of the year. This compares to growth of nearly 3% over the first six months of 2014, according to the latest prime property analysis from real estate firm Knight Frank. The annual change in prime property prices in 2014 was 3.4%, in line with the firm’s forecast for the year. The number of prime country house sales in 2014 was 3% higher than in 2013 and prime country house prices are forecast to increase by 2% in 2015. According to Oliver Knight, of the firm’s residential research team, the countdown to the 2015 general election, tighter mortgage lending and the prospect of an interest rate rise, all contributed to slower price growth in the second half of 2014. ‘More restrained price growth in recent months reflects what has happened in the mainstream market, with the Nationwide House Price Index having eased for the fourth consecutive month in December. Any slowdown in the wider market is likely to have an impact on buyer sentiment in the prime markets,’ he explained. ‘In spite of more moderate prices rises, market activity has remained robust. The number of prime country house sales completed by Knight Frank in 2014 was 3% higher than the previous year and 24% higher than in 2012, indicating that demand remains strong,’ he said. He also pointed out that reforms to stamp duty, announced by Chancellor George Osborne during the Autumn Statement, sparked a flurry of activity in early December as prime property buyers looked to move ahead of the rate change. Under the new rules, buyers of homes valued at more than £937,500 face higher stamp duty charges. As a result, the day prior to the new rules coming into force, was the busiest day of 2014 for the prime country market in terms of transactions levels. ‘It is possible that the prime sector of the market may take some time to absorb the changes as a result of the higher upfront cost of moving, with harder negotiations between buyers and vendors likely,’ said Knight. He also explained that prime country house prices are still trading at a large ‘relative’ discount to prices in London, having experienced several years of static or modest growth since the end of the financial crisis and prime prices remain 16% below the previous market peak. Also, price performance is increasingly dependent on property type. While the average cottage increased in value by 6.8% in 2014, manor houses rose by just 1.4%. ‘We are forecasting average price growth of 2% across the prime country market in 2015, but do not rule out some areas of outperformance, especially in key commuter towns,’ Knight concluded. Continue reading
