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Concerns over watering down of affordable housing commitments
Property experts are warning of an affordable housing time bomb in the UK which needs addressing to ensure enough homes are not only built but in the pipeline to cover future demand. It follows a recent case where a new appeal mechanism to remove the obligation of a developer to provide affordable housing was implemented and may open the flood gates for others to follow suit. Prior to the recession, many property developments were granted consent on the basis that, under section 106 agreements, a certain percentage of what was to be built would be earmarked for social housing. However, as the downturn began to bite, many developers found that the projects they were involved in were becoming increasingly unviable and sought to reduce the number of these properties and replace them with dwellings for private sale. Before 2008, local councils were able to stand their ground with regard to social and affordable housing requirements. But as the recession took hold and developers started to withdraw on their affordable housing commitments, councils were held over a barrel. It now seems that a new mechanism introduced through the Growth and Infrastructure Act 2013 is being used by developers to reduce their affordable housing commitments and follows a number of recent cases where the affordable housing requirements were reduced. This includes a development in Gloucestershire where the affordable housing commitment went from 20% on one site and 30% on a second site to 14.1% across the two. Another case in Exeter resulted in the affordable housing provision being reduced to zero. Angus Taylor from property consultants Bruton Knowles now believes that developers and councils need to work closely together before committing to a scheme so that a reasonable balance is struck between the provision of affordable housing stock while allowing developers to make any scheme viable and profitable. ‘Although we’re coming out of the recession, I believe there is going to be more cases where developers appeal on their affordable housing commitments. Coupled with a reduction in the number of affordable houses being built during the recession has made for a perfect storm in affordable housing provision,’ he said. ‘What’s key is that developers undertake stringent viability studies prior to the submission of any planning application. That way they know what the bottom line will be before any work is carried out,’ he explained. ‘Councils also have to be reasonable in their demands on what they’re asking developers to provide, otherwise nothing will get built leaving a shortfall of both private and affordable housing. What we don’t want is for this ruling to turn into a free for all where developers en masse appeal against their prior commitments,’ he added. Continue reading
Sharjah to allow expats to buy property for the first time
Foreigners are to be able to buy in Sharjah for the first time after the government passed a law enabling expats from anywhere in the world to invest in the real estate market. Leases of up to 100 years will be granted to overseas buyers provided they hold a United Arab Emirates residency visa, officials have confirmed One reason behind the decision is the huge demand for homes from people working in neighbouring Dubai. But there will be restrictions on locations with only property in new investment areas on the edge of the city centre being available. The first new development to offer the long leases will be Tilal City, a 25 million square feet development on Emirates Road close to the Al Dhaid Interchange which is being developed by Sharjah Asset Management and Eskan Real Estate Development. The project comprises 1,800 land plots. Officials said the new rules would create ‘new cluster cities’ outside central Sharjah which would reduce traffic and congestion in the main city centre. The move is also aimed at outlawing the number of disputes caused by foreigners attempting to get around the previous rules which prevented anyone other than GCC Arabs, and a few non-GCC Arabs and Asians with special permission, from owning real estate in the emirate. ‘There are over 220 nationalities here in Sharjah. But we think the biggest demand will come from Arab and Asian Muslims living here who want their families to live in a stable and safe environment,’ said Hamad Salem Al Mazrooa, director general of the Sharjah Real Estate Registration Department. ‘The only restriction is that they must have a residence visa at the time of purchase. If for some reason after the purchase their residence visa expires, they are free to hold the property, lease or sell it as they wish,’ he explained. Officials are keen to prevent developers selling hundreds of off-plan apartments to speculators who would then flip them on at a higher price, something that contributed to the recent boom and bust in house prices in Dubai. ‘We want to avoid off-plan speculative flipping, as in the past in the UAE before the crisis where developers were marketing the project and didn’t finish building, took the money and left the country,’ Salem explained. The Sharjah Real Estate Registration Department is to open a small registration office at the Tilal City site where foreign investors could start to register their properties. Faisal Durrani, international research and business development manager at Cluttons, described it as an historic milestone for Sharjah. ‘Traditionally, international investors have focused their attention on Dubai and Abu Dhabi, but the move will open up a new market, to investors residing in the UAE,’ he said. ‘The success of Tilal City is likely to determine whether a number of similar schemes are brought forward in Sharjah. However, based on the number of gated community feasibility studies that Cluttons has been commissioned to undertake, in close proximity to Sharjah International Airport, we expect to see similar developments launched… Continue reading
UK property prices up over 12% year on year, latest data shows
UK house prices increased by 12.1% in the year to September but there is considerable variation with London driving national prices up, the latest data shows. Overall, house price annual inflation was 12.5% in England, 5.8% in Wales, 7.6% in Scotland and 10.9% in Northern Ireland, according to the figures from the Office of National Statistics. Annual house price increases in England were driven by an annual increase in London of 18.8% and to a lesser extent increases in the East at 13.4% and the South East at 11.6%. Excluding London and the South East, UK house prices increased by 9.1% in the 12 months to September 2014. The data also shows that on a seasonally adjusted basis, average house prices increased by 0.5% between August and September 2014. In September 2014, prices paid by first time buyers were 13.3% higher on average than in September 2013. For existing owners, prices increased by 11.5% for the same period. According to Peter Rollings, chief executive officer of Marsh & Parsons, the housing market recovery is still showing spritely movement, and good ground has been covered in property values compared to a year ago. ‘Values have retreated back from peak levels in the majority of regions across the country. London remains the spark plug injecting energy into the overall annual rise in UK house prices, and lively demand to live and work in the capital has always spurred growth on at a faster pace than in other regions,’ he said. ‘Following a slower than normal summer in London, an attractive combination of greater supply of property, excellent lending conditions and more realistic asking prices are attracting good amounts of potential buyers to the market,’ he added. David Newnes, director of Reeds Rains and Your Move estate agents, pointed out that recent hiccups in the market have not shaken the overall underlying stability. ‘Zooming in on the regional footprints unearths a more complex path of growth as the recovery continues to advance with a Southern leaning slant,’ he said. ‘If we omit London and the South East from our calculations, a milder annual change in property prices emerges. Yet at the very top end of the housing market in prime central areas of London, growth is subsiding,’ he added. He also pointed out that the firm’s research shows that October saw the highest level of house sales completed in a month since November 2007. ‘This increased level of house sale completions marks a considerable, though laborious, reflection of the increased buyer activity earlier in the year since the recession zapped the energy from the market. Not only this, but activity is starting to shift towards areas where the recovery still requires support and attention,’ he explained. The research also found that the biggest uplift in completions in the third quarter of 2014 compared to 2013 has been witnessed outside of London. Completed house sales in both the West Midlands and East Midlands have risen 22%, while in London house sale completions are up… Continue reading
