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New committee formed to promote Build to Rent sector in UK
The British Property Federation (BPF) has announced the creation of a new committee that will focus on promoting the emerging build to rent sector. At a time when the housing crisis is acute and private renting has overtaken the social housing sector as the second largest tenure in the England, the committee will reinforce the important role that build to rent can play in increasing housing supply and tenant choice. It will work to ensure that both local and central government continue to support the sector, and create the right conditions to encourage investment and speed up delivery of this new housing product. The committee, which will be formed as a sub-set of the BPF’s residential committee, will be chaired by Andrew Stanford, UK residential fund manager at LaSalle Investment Management and former head of the government’s Private Rented Sector Taskforce. Adam Russell, acquisitions manager at FizzyLiving, will act as vice-chair. ‘Build to rent fits so well with so many of the new government’s priorities, delivering new supply of quality rented homes, accelerating the speed of housing development, making good use of brownfield sites, supporting place making and meeting customer needs,’ said Stanford. ‘There are many innovators in this new market and I am so pleased we have brought many of them together, in this new group, to drive that important dialogue with local and national government forward,’ he added. Continue reading
Firm identifies trend for changing commercial buildings for residential use
There is a growing trend in the property market in Scotland for empty commercial buildings to be changed into residential use, according to real estate consultants. Many commercial properties have recently being sold with a view to being occupied for alternative use, according to CKD Galbraith, which is increasingly being asked to evaluate the future potential of a building when valuing the property. The firm says that within the commercial sector, a number of buildings utilised as commercial properties are now being marketed with a view to change of use to residential and offering opportunities for private individuals and property developers. ‘We have been involved in many sales of commercial properties where we have determined that demand for commercial uses was limited and that a property’s prospects were greatly enhanced by promoting them for alternative use, in particular residential,’ said Harry Stott, of CKD Galbraith’s commercial team. Many present fantastic residential opportunities for developers or potential home owners alike to create some unique and stunning homes full of character and history,’ he added. This trend also particularly applies to town house properties in Edinburgh, according to Katie Gibson, a commercial agent within CKD Galbraith’s Edinburgh office. The firm was recently been involved in the sale and purchase of Edinburgh Townhouse Commercial properties in Gayfield Square and Chester Street, which again were of more interest to the residential market. ‘Whilst there is greater demand in Edinburgh for commercial use of town house buildings the potential returns and demand are often far greater for residential conversion particularly in the New Town,’ she explained. ‘We also get a number of private client requests looking to purchase town houses and commercial buildings that have outlived their current usage and offer fantastic opportunities for residential conversion,’ she added. Other examples include the former Ballathie Estate Office which offers limited demand as a commercial property, but presents a prospect for residential purposes subject to consent. Situated in a rural location in Perthshire, it is a single story U-shaped stone building arranged around a private courtyard with feature archway. The property was constructed in 2001 and has been utilised as a farm shop and café and estate office. The internal accommodation comprises two self-contained units which could be used as two separate residential units or linked to form one larger property. North Range, East Lodge at Stanley Mills is another such commercial property which lends itself well to potential residential use. Formerly used as office space it is part of Stanley Mills, a listed complex of buildings established as a cotton mill in the 1780s. However, restricted demand in the area for office use has resulted in CKD Galbraith applying for a change of use consent on North Range, East Lodge to residential which is where the firm believes the principal demand lies. Continue reading
More people expected to rent than buy in UK by 2025
By 2025 there may be slightly more people renting privately in the UK than owning with a mortgage, according to new research, with average prices rising to £360,000 by 2020. There will also be a greater number of mostly older people than ever before owning their home outright, amounting to almost 35% of all households, says the analysis from accountants PricewaterhouseCoopers. The analysis also says that UK house price growth is projected by PwC to average just over 5% per annum over the period to 2020. So the average residential property in the UK could be worth around £279,000 in 2015, rising to around £360,000 by 2020. Overall the total UK owner occupation rate is projected to fall from a peak of nearly 70% before the financial crisis to around 60% of households by 2025 and house price growth is projected to moderate to around 5% per annum. The report also points out that as house prices have risen much faster than earnings and social housing supply remains constrained, the number of households in the private rented sector has more than doubled since 2001. This trend is predicted to continue with an additional 1.8 million households becoming private renters by 2025. This would take the total to 7.2 million households, almost one in four of the UK total in 2025. The trend is particularly strong in the 20 to 39 so called generation rent age group where more than half will be renting privately by 2025, according to PwC’s latest UK Economic Outlook report. Also by 2025, PwC analysis finds that there could be slightly more people renting privately than owning with a mortgage. The number of households who own their home with a mortgage fell from around 10 million in 2001 to only around eight million in 2014. This is projected to decline further to just under 7.2 million by 2025 as limited housing supply and mortgage availability make it harder for first time buyers to get on the housing ladder. There will also be record numbers of people owning their own home outright. This accounts now for 8.4 million households and PwC projects this will rise to 10.6 million households by 2025, around 35% of the total. A key driver is the rising proportion of over 60 year olds in the UK, who are far more likely to have paid off their mortgages. ‘Driven by a decade of soaring house prices pre-crisis and lower loan to value ratios post crisis, the deposits needed by first time buyers have risen significantly. As a result, a generation of private renters have emerged and this will increasingly be the norm for the 20 to 39 age group,’ said Richard Snook, senior economist at PwC. ‘There is also a rising dichotomy in the market between those, mostly older, households who own outright and those, mostly younger, households who still have a mortgage or rent to pay,’ he explained. ‘Overall, we project that the proportion of owner occupiers,… Continue reading
