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Demand for prime rental properties in London set to continue in 2015
The strengthening London economy and the continued expansion of sectors such as technology and telecommunications will underpin demand for prime rental property in London, a new analysis suggests. This will also filter out into the wider commuter zone, though demand from the financial and business services sector is forecast to remain relatively subdued, according to a new report from real estate firm Savills. The firm is forecasting rental growth of 17% over the course of the next five years unless a mansion tax is introduced and levied on the owners of homes worth £2 million or more. The Labour party has said that if it wins the general election in May it will introduce such a tax. On the supply side, a more muted sales market in the run up to the election could result in more would-be sellers bringing stock to the rental market, according to Lucian Cook, director of residential research at Savills. ‘In the short term this is likely to continue to suppress rental growth. In addition, in certain locations on the fringes of prime London, where high levels of new build stock have been bought by overseas investors, we expect rents to come under pressure over a longer period,’ he said. ‘Beyond London we expect the preference for prime family housing in key commuter towns to continue, with existing demand supplemented by that from those relocating to these areas and temporarily renting before buying,’ Cook explained. ‘On the supply side, we believe a stronger sales market is also likely to reduce the impact of the accidental landlord over the medium term, causing a reduction in available rental stock at the top end of the market and supporting rental growth,’ he added. He also pointed out that the reform of the stamp duty system in December may impact on future investor behaviour. ‘Stamp duty costs will be lower for all acquisitions below £937,500. However, across Kensington and Chelsea the average stamp duty bill is expected to rise by over £40,000. This may drive investor demand to higher yielding, lower value parts of the market that equally are less likely to be affected by the continued political rhetoric around a mansion tax,’ said Cook. ‘The Autumn Statement also contained provisions to increase the levy on those long term UK residents who wish to retain their non-dom status. Though many will be home owners, this may impact on the budget of long-term renters,’ he explained. ‘A similar differential in rental performance was seen in the prime regional market. Smaller properties servicing core market demand have generally performed the most strongly, with one and two bedroom units delivering annual price growth ?of 4.3%, bringing total growth over the three years to 11.7%,’ he added. ‘By contrast, there has been a much thinner market for large properties at the top end, which continue to be price sensitive. Rental value for properties with six or more bedrooms rose by just 1.1% over the course of 2014, with… Continue reading
New home starts in Australia hit all-time high, latest data shows
More new homes in Australia were started in the September quarter of 2014 than in any quarter since records began in the mid-1980s, the latest figures shows. Building activity figures from the Australian Bureau of Statistics shows that detached dwelling commencements increased by 0.8% in the quarter while ‘other dwelling’, predominantly multi-unit dwellings, rebounded by 30.2%. In aggregate, the total number of dwellings commenced increased by 12.5% in the quarter to reach 52,380, a new record. With New South Wales, Victoria, Queensland and Western Australia, the four largest states, all recording their strongest quarters on record for multi-unit dwelling commencements at the same time, there is little surprise that activity reached a new record, according to the Housing Industry Association. ‘Furthermore, another incremental increase in detached dwelling starts sees this part of the market record the strongest quarterly result since 2010. This result confirms that residential building activity was tracking along at a very strong level during 2014,’ said HIA senior economist Shane Garrett. ‘However, part of the particularly strong September quarter result can be attributed to a catch up after the rather disappointing result in the June quarter when the number of starts fell well short of expectations,’ he pointed out. ‘Following the surge in residential buildings approved in late 2013 and early 2014, there was a substantial accumulation of multi-unit residential building projects that had obtained approval but did not commence construction in the first half of the year. The figures confirm that much of the activity in the pipeline entered the construction phase in the September quarter,’ he added. A breakdown of the figures show that new home starts increased in all states with the exception of South Australia where activity fell by 5.7%. Activity in New South Wales increased by 30.7%, in Victoria by 0.9%, in Queensland by 18.1%, in Western Australia by 5.1%, in Tasmania by 2.9%, in the Northern Territory by 9.6% and by 22.8% in the ACT. Continue reading
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
