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Calls for key business districts in London to retain their office space
The Mayor of London is bidding to preserve city’s key business districts by urging the government to reconsider proposals that could see valuable office space in the capital turned into homes. Last year the Mayor negotiated for four defined areas in central London to be exempt from a Government policy that allowed office space to be converted into homes without developers applying for change of use planning permission. These areas included the Central Activities Zone which incorporates the City of London, the South Bank and the West End. More than a third of London's jobs are within this area, and a further 280,000 jobs are expected to be created here in the next 25 years. The Mayor also successfully gained exemptions for the commercial area north of the Isle of Dogs and London's Enterprise Zones in the Royal Docks, plus the part of the City Fringe in east London which makes up the emerging Tech City opportunity area. The UK government has just finished consulting on a raft of planning proposals including one that would see the exemption for these areas removed, a move that the Mayor, Boris Johnson, says would damage London's internationally important business locations. Johnson points out that London is the beating heart of the UK economy and accounts for over a fifth of GDP. It is also a global centre for business, so the Mayor believes it is vital to maintain a stock of quality office space in key areas to ensure the city can continue to attract jobs and growth. The city is home to a number of unique clusters of economic activity from government offices, to financial services, institutions and professional bodies, which employ millions of people, contributing billions to the national economy. The Mayor believes that if these clusters were to be broken up in piecemeal residential conversions these benefits would disappear. ‘London is a colossal powerhouse of jobs and growth, and the motor of the UK economy. While increasing housing output is of vital importance, I am concerned that removing the exemption in our most thriving business districts could compromise both London and the UK's future economic growth,’ said Johnson. ‘London's success depends on a rich mix of uses and more high value residential property in central London could upset this balance and change the area for good,’ he added. In a letter to the Secretary of State for Communities and Local Government, Eric Pickles, the Mayor, together with London First, the British Property Federation and the Planning Officers Society London say that ‘incremental unplanned loss of office accommodation in strategically important office areas of London can significantly weaken the agglomeration benefits provided by these locations’. The Mayor and signatories to the letter also argue that criteria should be in place to protect other, strategically important business locations across the country. They argue that due to the large variation in size and function of office clusters throughout the country, especially between London and other cities in England, it would be challenging to agree… Continue reading
Farm land values in England up 2% in third quarter of 2014
The average value of farm land in England increased by 2% in the third quarter of 2014 and has increased 12% so far in 2014, the latest index shows. The average value of commercial farm land without any land or buildings now stands at an average of £7,689 per acre, or exactly £19,000 per hectare, the results from the Knight Frank farm land index show. Year on year, farm land prices are up 15% and over a 10 year period, farm land has risen in value by 187%, second only to gold at 224%. The 2% growth in the third quarter of the year builds on the 9% growth seen during the first half of 2014. This comes at a time when there is limited supply. The amount of publicly advertised land is down 15% compared with 2013, according to the Farmers Weekly Land Tracker and the ongoing demand from both farmers and investors continues to push up prices. Despite recent falls in the price of agricultural commodities such as wheat and milk, farmers are still focused on the long term and are keen to acquire neighbouring or nearby land when it becomes available. With house builders increasing their output and acquiring more development sites, the number of farmers with roll-over funds to spend on land is growing. As farmland is acquired for the controversial HS2 rail scheme this could also bring new buyers into the market, says the Knight Frank report. Investors’ hunger for land remains undimmed, as highlighted by the recent purchase of the Co-op farms portfolio for almost £250 million by the Wellcome Trust. Part of the problem for investors, particularly funds, is the lack of suitable investment grade land available, combined with strong competition from neighbouring landowners prepared to pay a ‘legacy’ premium for land that they may only have one opportunity to buy and once purchased may stay in their families for generations to come. Because of this, many investment led deals are happening off market. Knight Frank’s Agricultural Investments team, which is acting for a number of wealthy individuals and funds, estimates private deals are outnumbering public ones by as much as two to one. Although large tracts of arable land with relatively little value tied up in high value period farm houses are selling quickly and the market for estates with large residential properties is less fluid, according to Clive Hopkins, head of the firm’s Farms and Estates team. ‘In some instances, this has led to large chunks of an estate’s farm land being sold off separately for a premium price. I think this trend really highlights the strength of the farmland market. Traditionally it has been the house leading the sale, now often it is the land,’ he added. Continue reading
House prices have increased strongly annually across the UK, says latest ONS index
UK house prices increased by 11.7% in the year to August 2014, unchanged from the year to July 2014, according to the latest index from the Office of National Statistics (ONS). House price annual inflation was 12.2% in England, 4.7% in Wales, 6.7% in Scotland and 9.6% in Northern Ireland. The index report says that house prices are increasing strongly across the UK, with prices in London again showing the highest growth. Annual house price increases in England were driven by an annual increase in London of 19.6% and to a lesser extent increases in the South East of 12.3% and the East of 11.6%. However, excluding London and the South East, UK house prices increased by 7.8% in the 12 months to August 2014. On a seasonally adjusted basis, average house prices increased by 0.6% between July and August 2014, the data also shows. In August 2014, prices paid by first time buyers were 12.9% higher on average than in August 2013. For existing owners prices increased by 11.2% for the same period. ‘While price growth dulls, activity in the market is still vibrant, and total house sales completions are up 16% year on year in September. First time buyers have been bringing much of the vitality and optimism to the party,’ said David Newnes, director of Reeds Rains and Your Move estate agents. ‘While the market adapts to a mellower beat, schemes like Help to Buy and an accessible lending environment are essential to ensure that confidence isn’t silenced, and activity continues to sing,’ he added. He pointed out that a North/South divide remains evident in the race back from the debris of the financial crash. For six regions of the UK, average property prices achieved on completion are yet to match their pre-crisis score. The North has the furthest ground to travel, with average prices still 8.3% or £13,400 below their housing boom high in March 2008. The London property scene is on a different scale to the rest of the country. ‘Overall, the capital has seen the strongest housing market recovery, with prices having now grown 47.3% from their previous peak in February 2008. However, the rate of annual house price inflation in the capital eased in August, as we see growth relaxing into a slower tempo from the heady pulse earlier this year,’ said Newnes. Continue reading
