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Dubai to get mandatory affordable housing quotas
A proposal by Dubai Municipality to introduce mandatory affordable housing quotas for all new residential developments is expected to bring a wide range of benefits to the emirate, it is claimed. The move will create further maturity in the market and is long overdue, according to a new report from international real estate consultants, Cluttons. With the residential market in Dubai now meandering through the second half of the current property cycle and with values stabilising following the tremendous growth recorded in 2013 and the first half of 2014, the timing for the introduction of such legislation is ideal, the firm says. According to Steven Morgan, chief executive officer of Cluttons Middle East, the issue of affordability has been one that has been quietly bubbling away in the background for some time. ‘With the introduction of the Federal Mortgage caps and the doubling of property registration fees, we saw genuine end users in the market forced into a holding pattern as they attempted to make the transition from rented accommodation to owner occupation,’ he said. ‘The surging rents, driven by the exceptionally strong underlying demand, which was linked to the robust economic growth, meant that household finances were coming under tremendous pressure on several fronts,’ he pointed out. ‘Now of course, with rents starting to show greater stability, households have a window of opportunity to consolidate their finances and make that leap to owner occupation. The prospect of those on monthly incomes of between AED4,000 and AED12,000 being able to control their rental outgoings will no doubt go some way to aiding the speed at which deposits can be amassed,’ he added. He also pointed out that it is important to remember that there is a huge pent up demand for affordable housing in the UAE and with rental affordability thresholds being breached in many cities, we welcome the news on this key issue. According to Cluttons, the idea of affordable housing is not a new concept and it has served cities such as London well, where developers are liable to provide affordable housing for developments starting with as little as ten units. In particular it has aided in the creation of diverse communities, while allowing people from all financial backgrounds to live alongside one another. ‘There have of course been exceptions to the rule, where developers have been permitted to build off-site affordable housing, with land costs being cited as the primary driver for this. Dubai stands to learn a valuable lesson from this as the authorities in London have often been criticised for effectively creating lower income neighbourhoods through this method,’ said Cluttons' international research and business development manager, Faisal Durrani. He explained that Dubai is clearly not short of affordable neighbourhoods. Karama and Satwa are two key stand out areas that evolved organically at the edges of the Deira-Bur Dubai and Jumeirah districts, respectively. ‘During the course of expansion of any city, affordable districts often tend to spring up on the fringes… Continue reading
Property prices near London Crossrail stations set to outperform local markets
On average property prices within a 10 or 15 minute walk from the new Crossrail stations in and around London have already outperformed prices in the wider area by some 5%, new research shows. While there are pockets of sustained outperformance, especially in central London, average residential property prices around a few of the stations in the Eastern and Western sections of the line show a more mixed picture. Yet those areas where price growth has lagged the surrounding areas may offer significant opportunities for further price uplifts, especially where large scale regeneration and development is underway, according to the major analysis report from real estate firm Knight Frank. It points out that when fully complete in 2019, Crossrail will bring an additional 1.5 million people to within a 45 minute commute of the centre of London. ‘In many cases, it is not just the reduced travel times that have the potential to create value, but also large regeneration projects connected with Crossrail, which are not only improving the realms around stations, but providing a wider choice of higher level amenities as well as residential property options,’ said Grainne Gilmore, Knight Frank head of UK residential research. The firm has previously assessed how residential prices around central Crossrail stations performed between 2008, when Royal Assent for the project was granted, and 2012 and found that on average, prices within a 10 minute walk of the stations outperformed the wider prime central London market by 8%. Now it has taken its analysis further and also looked at how property prices around each of the stations from Shenfield to Maidenhead have moved over the last seven years, and comparing this with average price growth in the surrounding areas. In total, there are 2,976 residential units in schemes which have been started within a 10 minute walk of central Crossrail stations and a further 10,096 units with planning approved. ‘Some of these schemes may be phased, and take some years to deliver but the development potential of the areas surrounding the stations is clear,’ said Gilmore. ‘The research shows that prices around Canary Wharf Station have lagged the strong growth seen in prime outer London from 2008 to date, but the scale of development taking place in the area, and further East, make this an area to watch,’ she pointed out. Residential property prices within a 10 minute walk of the central stations have risen, on average, by 57% since 2008 compared to 43% growth in the prime central London market over the same period, according to Knight Frank’s own index. The biggest rises in residential prices have been seen within a 10 minute walk of Bond Street with an 82% uplift in prices in the area surrounding the station, which encompasses much of Mayfair. ‘While some of this increase has been underpinned by the buoyant central London market, it does not explain the full uplift. Prices in the wider Mayfair market were some 30% higher… Continue reading
Surveyors reveal the damage caused to Victorian and Edwardian houses in the UK
There are over four million Victorian and Edwardian houses in the UK and many are crying out for some serious care and repair work, according to chartered surveyors. Buildings of Victorian and Edwardian age account for a disproportionately high number of the 'essential repairs' listed in mortgage valuations and survey reports, says the Royal Institution of Chartered Surveyors. One cause of problems arising today can be traced back to the Victorian builders who were not always averse to taking shortcuts and skimping on materials, with the result that ‘inherent defects’ developed in later life. Experienced surveyors will know how to identify common problems like damp, timber decay, and structural movement. But they will also know when not to worry, when apparent defects are not significant, according to a RICS qualified chartered surveyor Ian Rock. He pointed out that large numbers of homes of this era have suffered from a long term lack of maintenance. Worse, many old buildings have been subjected to inappropriate repair work, leading to a loss of valuable original features. ‘In some cases well intentioned repairs have had the effect of exacerbating the problems that they set out to solve. Works such as re-pointing and rendering in modern cement based materials, the use of plastic paints and the retrospective application of unnecessary damp proof treatments can all be detrimental to the health of such buildings, in time leading to accelerated decay and irreparable damage,’ he explained. The most inappropriate works commonly carried out on traditional buildings include replacing original good quality sash windows with inappropriate modern aluminium or PVC-U casements and stripping out original period doors. There is also unnecessarily injecting chemical damp proof courses or injecting them incompetently, and re-plastering or rendering main walls with cement based materials rather than traditional lime, thereby trapping damp in the walls. Damp, rot and beetle infestation is encouraged by blocking ventilation to floors and roofs, and by allowing high ground levels such as flower beds to build up against external walls. Removal of chimney breasts or load bearing internal spine walls without providing adequate support to the remaining masonry above can also cause damage. Others are neglecting badly eroded mortar joints to external masonry, allowing damp to penetrate and frost damage to occur and re-pointing walls with cement mortar that prevents walls from ‘breathing’, and re-pointing in visually dominant ‘show off’ styles such as protruding ‘weather struck’ pointing. RICS also points to botched repairs to flashings to stacks and roofs with short life materials such as self-adhesive tapes or mortar fillets and a failure to provide enhanced structural support to roof structures where original lightweight slate coverings have been replaced with heavier concrete tiles. Damage can also be caused to these old buildings by not lining old flues before lighting fires or using appliances, and failing to cap and ventilate disused flues as well as weakening floor joists with excessive cutting for cable and pipe runs. ‘RICS members have a pivotal role to… Continue reading
