Tag Archives: news
New planning guidance for central London published by the Mayor
Protecting London's vibrant commercial heartland and ensuring it can remain a key driver of the UK economy for decades to come is the focus of major new planning guidance published by the Mayor of London, Boris Johnson MP today. The Mayor of London has published major new planning guidance aimed at protecting the city’s vibrant commercial heart which is a key driver of the UK economy. The Central Activities Zone, running from Kensington Gardens and Paddington in the west, to Aldgate in the east, and from Kings Cross and Euston in the north to Elephant and Castle and the Battersea Power Station in the south, is regarded as the economic and administrative epicentre of London. The area, which is approximately 13 square miles in size, employs more than 1.7 million people and boasts outstanding heritage, shopping and culture and attracts millions of visitors every year. It generates almost 10% of the UK's economic output and is also home to more than 230,000 people. However, in recent years, some valuable office space in the area has been lost to new housing in a move that if continued could threaten the capital's economic pre-eminence. But the Mayor believes that the demand to create new homes in London does not need to be at the expense of the business, culture and other key functions of the zone. ‘The heart of the capital is the foundation of London's reputation as best city in the world in which to do business. While we continue to do all we can to increase housing supply city-wide, it is also vital that we protect our office space so central London continues to be a key generator of economic prosperity for the entire country,’ said Mayor Boris Johnson. Highlights of the new Central Activities Zone Supplementary Planning Guidance, which is aimed at planners, developers and local authorities include working to address the recent tension in central London between residential and office space. The Government recently announced that from May 2019 it will allow office space in central London to be converted into homes without developers applying for change of use planning permission. This will replace an exemption that the Mayor negotiated in 2014 that has protected London's core office space. The Mayor is working closely with London's local authorities to bring forward special planning regulations known as Article 4 directions so that they can continue determining planning applications for the change of use. This will ensure that London's commercial heartlands will be protected from planning changes. For the first time ever, detailed guidance states that new residential development is not appropriate in the commercial core of the City of London and northern Isle of Dogs. The guidance also includes more stringent criteria to guide applications across all of central London which would lead to the loss of offices. It pinpoints geographical parts of central London where commercial use should be given priority over new residential developments. This includes substantial areas such… Continue reading
Mortgage lending in UK fell in February month on month, no big change expected
Gross mortgage lending reached £17.6 billion in February, some 5% lower than January but 30% higher than February last year, according to the latest estimates from the Council of Mortgage Lenders. It is, however, the highest lending total for a February since 2008 when gross lending reached £24.1 billion. ‘Lending continues the year on a positive note, with our monthly estimate showing an increase of 30% in February compared to a year ago. This growth rate is in line with what we saw in the closing months of 2015,’ said CML economist Mohammad Jamei. He explained that the recovery is being underpinned by market fundamentals in the UK, as wages grow and unemployment falls, helped by government schemes and competitive mortgage deals but the CML thinks it is unlikely that there will be any significant acceleration in lending. ‘While there may be a slight current boost to lending as some transactions seek to complete before the 01 April tax changes in the buy to let sector, this is likely to be followed by a slight fall in activity. Affordability pressures continue to weigh on activity, as does the low number of properties coming on the market, though this has been improving very recently,’ he added. Andy Knee, chief executive of LMS, believes that apart from a slight dip in activity expected following the April tax changes, all factors are working in the mortgage market’s favour. ‘Despite a delay in the base rate rise, the remortgage market in particular is likely to continue unabated, with home owners sitting on record housing equity and capitalising on the hugely competitive rates currently available,’ he pointed out. According to Peter Rollings, chief executive officer of Marsh & Parsons, once the April deadline passes it will quickly revert to business as usual, and a subsidence in buy to let borrowing will likely water down the growth in the mortgage market. ‘The Chancellor is certainly laying the long-term foundations for future mortgage lending levels, with the Lifetime ISA announcement just the latest guise to help first time buyers save up for a deposit and get onto the property ladder,’ he said. ‘But these savers are a long way down the pipeline, and in the immediate term, borrowing is more likely to feel the brunt of measures affecting the buy to let market. Property investors were completely overlooked in the Budget, and the Chancellor’s move to exclude landlords from the tax break on capital gains seems at odds with the need for greater supply of property on the market. Any measure that discourages and disincentives selling homes is not helpful in the current climate, and for buyers trying to keep track of house prices,’ he added. Continue reading
New stamp duty rates for commercial property in the UK announced
Investors in larger commercial property in the UK see a rise in stamp duty rates but buyers of smaller properties will benefit from a reduction in the tax payable. The way stamp duty on freehold commercial property and leasehold premium transactions is calculated has changed. The rates used to apply to the whole transaction value but from today (17 March) new tax rates and bands come into force. The new rates and tax bands are 0% for the portion of the transaction value up to £150,000, 2% between £150,001 and £250,000, and 5% above £250,000. It means that buyers of commercial property worth up to £1.05 million will pay less in stamp duty. Stamp duty rates for leasehold rent transactions will also change, with a new 2% stamp duty rate on leases with a net present value over £5 million. Opinion over the effect of the change is divided. According to the British Property Federation (BPF) it is not all good news. ‘Commercial property investment can often act as the catalyst for regional growth and as the economy has recovered investment has been spreading out from London to the UK’s regions, but will now undoubtedly slow,’ said Melanie Leech, BPF chief executive. ‘The real set back is that development in places like the Northern Powerhouse and Midlands’ Engine will now be held back as a result of this out of the blue raid on commercial property transactions,’ she explained. ‘Over a decade ago, the Government of that time decided to decouple the commercial and residential rates of SDLT recognising that the sectors were driven by very different factors and there was no logic in charging the same rates of SDLT on commercial and residential property. We can only hope that today’s announcement isn’t any unravelling of that logic,’ she added. However, Mark Tighe, managing director of capital allowances tax specialists Catax Solutions, believes that the reduced stamp duty payable will drive demand in this key asset class in the months and years ahead. But he warned that the resultant increase in transactions, among both businesses and private individuals buying commercial property, will potentially cost billions as a largely unused tax relief is lost forever. ‘Capital allowances are a highly valuable tax relief available to owners of commercial property but under current legislation they are irrecoverable if they are not identified and realised at the point of sale,’ he explained. ‘Currently, very few commercial property owners, along with their accountants and lawyers, are aware of unused capital allowances tax reliefs. Therefore as transaction levels increase in volume and momentum, commercial property owners are set to lose significant tax rebates to the tune of thousands, tens of thousands or even hundreds of thousands of pounds,’ he added. Continue reading
