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Land agent suggests UK govt target of a million new homes by 2020 is achievable
Land agent Aston Mead has hit back at those who have doubted the ability of the UK to build a million new homes by 2020. The pledge is at the heart of the government’s landmark Housing and Planning Bill, which received Royal Assent earlier this month. However, a recent survey of owners and directors of 389 house builders across England indicated that just over half, some 51%, thought the target would not be met. Aston Mead land planning director Adam Hesse said there is a danger that the planning pessimists out there will create a self-fulfilling prophecy. ‘A million homes by 2020 is perfectly possible as the Home Builders Federation have stated quite clearly. But it will need conviction and commitment, as well as further government policies in favour of development, and help to speed up the planning process,’ he explained. He pointed out that there have already been huge increases in output, with build rates on large sites doubling since 2010. There were more than 180,000 new homes delivered in 2014/2015, with this year’s figure expected to be higher still. ‘By 2019 the big companies will be building double what they did six years ago. Now we need to speed up the momentum even further, so that we ensure we reach the target of one million new homes by 2020,’ he added. Despite his optimism, Hesse believes that the industry needs to see more land coming through the planning system, and processes that support both large and smaller house builders. ‘Several significant advances have happened already. Brownfield sites will now automatically be approved for building, with £10 million worth of funding to help local authorities prepare them. There are also plans to relax the planning rules for smaller house builders, enabling them to gain automatic planning permission on suitable sites. And changes to the section 106 agreement will enable developers to provide affordable homes to buy, instead of affordable homes for rent,’ Hesse explained. He added that it is local councils, who are the largest landowners in the country, which will be key to the success of this project. ‘They must get up-to-date housing plans in place, ensuring that they are robust and evidence-based,’ he said. He also pointed out that councils should review their planning application process and the conditions attached to planning which represent such a major challenge for developers. Plus they need to streamline their planning processes and improve communication so that once approved, building can get underway quickly. ‘For their part, house builders are already investing in their supply chains and have taken on tens of thousands of new workers to ensure there is the capacity and skills required. All we need now is the conviction and commitment to carry it off,’ Hesse concluded. Continue reading
Rents, sales and prices record moderate falls in Dubai in first quarter of 2016
The Dubai residential real estate market is experiencing moderate declines in rents and sales prices and transaction volumes are also down, according to the latest UAE property review. The analysis report from Asteco suggests that a focus on affordability is becoming more prominent in the emirate’s real estate market. Whilst no significant rent reductions were recorded during the first quarter of the year this may have been due to limited supply and the general trend continued to be towards increased competition amongst landlords. Leasing demand was stable in the first two months of 2016, however, a slowdown was recorded from March onwards, especially for more expensive properties where take-up was slower than usual. On average, rental rates stabilised in the affordable segment, and declined by 2% and 3% for mid and high end apartments, respectively. Asteco says that this minimal decrease was due to a combination of landlords trying to retain tenants rather than insisting on higher renewal rates, a decrease in the number of newcomers to the city, and in some sectors, housing allowance cuts and redundancies. Compared to the previous quarter, sales prices remained stable, with the exception of high end apartments and villas where 2% average declines for both markets were recorded. However, according to the Dubai Land Department (DLD), the first quarter of 2016 was considerably worse than the first quarter of 2015 as the overall residential transactions by total value were down by 25%, transaction numbers by 17% and the average sales price by 11%. Leasing activity at the beginning of the year started well, however, enquiry and transaction levels tapered off in March. The report suggests this was partially due to property owners keen to retain their existing tenants, and therefore willing to negotiate rental rates instead of having a property vacant. As a result, fewer tenants were seeking to move to a new unit. Asteco also noted a tendency for the more expensive units in buildings to remain vacant for longer, as tenants became more conscious of their spending habits. Whilst declines were limited over the quarter, year on year comparisons indicated an average of a 4% decline across the board. The most affected areas were those that had seen previous rapid rental increases for a relatively undifferentiated product. For instance, Jumeirah Lake Towers recorded a 12% decline year on year. ‘Indeed, whilst the community is attractive overall, the quality of most residential towers are below the tenant’s expectations considering the high rental levels. We have noted an increase in demand for affordable units. However, rental rates have not fallen far enough to warrant tenants to relocate from the Northern Emirates to Dubai yet,’ the report points out. ‘This is further compounded by the fact that for a similar priced product in the Northern Emirates would equate to a much smaller unit in Dubai. For instance, AED60,000 would mean a two bedroom unit in Sharjah as opposed to a studio or a small… Continue reading
Second home owners returning to Portugal, particularly the Algarve
The availability of cheap finance, investment in infrastructure, appealing tax initiatives and a return to sensible pricing has prompted renewed activity in the Algarve’s property market. Overall, the Portuguese property market’s decline since the economic downturn of 2008 is well documented. Prices in some locations popular with overseas buyers have fallen by as much as 50% in peak to trough terms. But sales volumes and prices have responded, albeit in two phases, according to the latest analysis from international real estate firm Knight Frank. In 2013 the firm saw vendors start to adjust their prices, which led to an upturn in transactions. By 2015 the Algarve recorded its first annual increase in prime prices since 2008 and Knight Frank’s west Algarve office reported a 32% increase in sales in 2015 compared to 2014. The report says that what set the Algarve apart during the downturn was the continual investment in infrastructure. The upgrade of the coastal A22 motorway, for example, has opened up the western Algarve while the improvement to the E1 from Lisbon and Porto and the €32 million expansion of Faro Airport have helped boost economic confidence. Further development is planned at Vilamoura and Quinta do Lago. The report points out that British, Irish and German buyers are still evident in the Algarve but French, Scandinavian and non- Europeans, including South Africans and Chinese, are also increasing in number. A surge in French interest has been seen in the last two to three years with many citing Portugal’s Non-Habitual Tax Residency regime (NHR) as a key incentive. Introduced in 2009, the NHR exempts non-residents spending 183 days a year in Portugal, or those with a primary residence in the country, from income tax on non-Portuguese incomes, including pensions, salaries and capital gains for a period of 10 years. Another initiative, Portugal’s Golden Visa, by far the most successful of the European schemes in existence, has seen inward investment focus on the Lisbon area rather than on the Algarve. To date Chinese buyers account for 79% of the 2,853 visas granted since 2012. The report also points out that there is now a greater focus on the Algarve’s investment potential compared with before 2008. The Algarve’s 37 championship golf courses are responsible for over 50,000 rounds of golf a year and their season extends beyond that of the traditional summer rental period, running from February to May and again from September to November. And it adds that new development is evident once more particularly at the eastern end of the Algarve, but prime projects need to be anchored by a 5-star hotel brand or a championship golf course to pull buyers away from the more established locations such as the Golden Triangle area which stretches from Quinta do Lago to Vilamoura and Vale do Lobo. Continue reading
