Tag Archives: london
Planning permission in London too low to meet new housing targets
The current rate of planning permissions in London mean that just two thirds of the target number of homes that government officials say are needed will actually be built, according to new research. London’s planning system is allowing new homes at an annualised rate of just 27,470 as of the end of 2014, or just 69% of the target for 40,000 finished new homes each year announced by Chancellor George Osborne and London Mayor Boris Johnson in February and underlined in March’s Budget. An analysis of planning applications across the city by London estate agents Stirling Ackroyd shows just 6,780 homes were given planning permission in the last quarter spread over 826 different sites. These approvals represent 80% of all potential homes receiving a planning decision in the fourth quarter 2014. This is out of plans for 8,632 possible homes in the quarter. By contrast, if 100% had been approved, this could have allowed an annualised rate of up to 34,530 new homes, or 86% of the official target rate. In reality the number of homes reaching completion stage currently stands at an annualised rate of just 18,440 after the final quarter of 2014 saw just 4,610 properties finished in the space of three months. Despite this low base, London has seen an acceleration in finished homes. Last quarter’s figure represents a 30% increase from the third quarter of 2014. This is almost twice the acceleration in home completions seen outside the capital as across the rest of England there was a 17% uptick. However, new home starts were far lower last quarter, at just 3,040 or an annualised rate of just 12,160 homes per year. If this pace of housing starts continues and is reflected in the annual rate of completed homes it would mean failing to reach even a third of the government’s annual target. Out of all London’s boroughs, Tower Hamlets gave permission for the greatest number of new homes in the final quarter of 2014 at 1,197 dwellings spread over 25 different sites. This means more than one in six homes receiving planning permission in the capital was in Tower Hamlets, or 17% of the quarterly total. Second to Tower Hamlets in absolute terms was Croydon, where 682 homes came through the planning system, followed by Richmond with 591 dwellings approved in the quarter. At the other end of the scale Lewisham allowed just 11 new homes in the final quarter of 2014 out of a potential 18, while Kensington and Chelsea approved 13 out of 16 possible new homes and Lambeth only 17 homes out of a total of 40. Comparing the number of homes given permission to the total number of potential dwellings applied for via planning applications, boroughs vary by the leniency or rigour with which they have interpreted their guidelines. Greenwich and Hammersmith and… Continue reading
Africa’s growth cities attract increased foreign real estate investment
An increased numbers of international investors are investigating opportunities in African real estate markets, attracted by the continent’s startling economic and demographic growth prospects, it is claimed. According to a new Africa Report 2015 from international real estate firm Knight Frank, the population of Africa will quadruple to over four billion by 2100, with nearly one billion of these people in Nigeria alone. It argues that could be the single most important demographic trend that will shape the world over the course of this century and by 2100 nearly 40% of the world’s population will live in Africa, with the large majority of these being in the continent’s fast growing cities. Nigeria is now the largest economy in Africa with GDP estimated at $594.3 billion, followed by South Africa at $341.2 billion and overall Sub-Saharan Africa is one of the world’s most rapidly developing economic regions, and it is projected that 13 of 20 fastest growing global economies over the next five years will be in Africa. According to the report Luanda in Angola has one of the highest prime office rents in the world at US$150 per square meter per month, driven by demand from the oil and gas sector, and an extreme lack of availability. Luanda’s population is forecast to increase by more than 70% from 2010 to 2025 period, while Dar es Salaam, Kampala and Lusaka are expected to double. ‘Allied to strong economic growth, this is creating increased demand for good quality real estate of all types,’ the report says. It also points out that the retail sector has seen a huge increase in activity as a result of the rise of the urban middle class and the expansion of South African retailers such as Shoprite and Pick n Pay into the rest of Africa. Modern shopping malls are a relatively new concept in much of Africa, but a spate of new malls has been developed in key cities such as Accra and Nairobi. ‘The growth of Africa’s cities and economies will do much to define the global socio-economic landscape over the coming decades,’ said Matthew Colbourne, Knight Frank international research associate. ‘These major long term trends are driving the construction of high quality real estate across the continent. The most visible demonstration of this is the rise of the modern shopping centre concept in cities such as Nairobi, Lagos and Accra, but there are development opportunities in all property sectors,’ he explained. ‘Large volumes of good quality commercial and residential property are needed to support the continuing African growth story, presenting excellent opportunities for global funds looking to diversify or enter into African markets,’ he added. The report also points out that Africa’s growth potential has led to a notable increase in activity involving overseas investors and South African funds over the last two years. For example, Chinese investors’ involvement in large scale development and infrastructure projects across Africa has been particularly eye-catching…. Continue reading
Prime property in UK university towns could be snapped up by buy let pensioners
People in the UK who are able to take money out of their pension pots from next month can be confident that if they choose to invest in buy to let they are likely to see strong returns, it is claimed. Recent research by IPSOS MORI suggests over 15% of the estimated 200,000 expected to cash in their pension will choose an investment in property. Management and investment company Grant Property Investment, said it has already seen a 28% rise in property sales in the last quarter of 2014 compared to the same quarter the previous year and expects a further rise when the pension changes take effect in April. For those who do enter the market, there is the potential to enjoy the potentially higher returns than the 3% to 4% pensioners could receive when buying an annuity, the firm believes and points out that investors would also own an asset that can substantially grow in value in the future. ‘As a business, we only source prime traditional Georgian and Victorian properties in areas that have high occupancy and can produce a high rental yield. Consequently, on behalf of individual and institutional investors we are very active in 12 UK cities, including Edinburgh, Stirling, Dundee, Glasgow and Aberdeen,’ said As Peter Grant, chief executive officer of Grant Property. Grant acknowledges that recent analysis from the Halifax suggests UK house prices are firming, while various experts expect house price growth of 4% in 2015. In addition to this he believes prime property in places such as Edinburgh will continue to offer a solid return, including for those who seek alternative ways to utilise a pension pot. ‘Our own expectation is that the properties in prime city centre locations, outside London, will increase in value by a further 3% to 5% in 2015 and achieve rental yields of 6% to 8%. This is significantly better returns than in London where some view prices as overheated and yields are as low as 2% to 3% in prime areas,’ Grant said. ‘It’s also our experience of the market that high quality traditional residential property consistently outperforms new build developments from a capital growth and yield perspective,’ he added. The firm recognises that those of pensionable age may be wary of tax implications, investing in a single asset class and variations in future interest rates and therefore it always recommend clients take independent advice before making any decision. ‘As an alternative to an annuity, investing in a prime buy to let property gives you and your offspring an asset and potentially rental income higher than returns from an annuity. Many parents of offspring heading for university may also see the benefit of investing in high quality property that can support their child through education and provide monthly rental if let to fellow students,’ Grant pointed out. ‘We expect the buy to let will remain a standout investment for 2015, especially in hotspots like the university cities of… Continue reading
