TSI
Call for new legislation to create national property insulation standard in UK
All new and existing homes in the UK should have to meet national insulation standards with incentives such as a cut in stamp duty for properties that meet them, it is suggested. A new report from the Institution of Mechanical Engineers also calls for insulation installers to have to sign up to a certification scheme similar to Gas Safe registration. It wants the government to urgently introduce legislation for a national insulation programme to cover every UK home that would declare all building stock as ‘national infrastructure’ and provide incentives, such as a reduction in stamp duty, for homeowners to install insulation to national standards. For those who cannot afford to pay, a national scheme to cover the cost of work would be funded by general taxation and the report also calls for installers of energy demand reduction measures to be trained to meet a mandatory competence registration, similar to the CORGI certification / Gas Safe Register for gas installers. ‘The UK’s housing stock is some of the most poorly insulated in the developed world, largely because of the age of much of the countries domestic dwellings and the failure of successive governments to take the meaningful action required on energy efficiency measures,’ said Dr Tim Fox, lead author of the report and a fellow of the Institution of Mechanical Engineers. He pointed out that the amount of money and fuel that is wasted on heating poorly insulated homes is appalling. ‘The UK is facing a future of depleting UK gas reserves. It is clear that it is time for urgent action to improve energy efficiency in UK homes,’ said Fox. ‘Incentives could include schemes such as enabling sellers to offset the cost of upgrading their insulation to national standards against the stamp duty payable on the sale of the home,’ he added. He also want the government to recognise the importance of the installer community in achieving its energy security and decarbonisation goals for heat provision and introduce ‘free’ training alongside a new mandatory competence registration for installers of energy efficiency and sustainable supply systems. I According to the report, the UK’s current heat infrastructure evolved in response to the availability of abundant supplies of affordable North Sea gas but is no longer fit for purpose to meet the country’s future energy security challenges, social needs and decarbonisation aspirations. Continue reading
Record levels of investment in UK purpose built student housing
The UK property investment market is seeing record levels of money going into the student housing market with over £4.2 billion already in the first five months of 2015. This level of investment in purpose built student accommodation is 70% ahead of last year’s total and 40% above the previous peak in 2012, according to a new report from international real estate adviser Savills. The on-going expansion of the purpose built student accommodation sector has vastly transformed the state of student housing over the last 25 years, the firm’s latest report says. It explains that this investment market has also matured, growing from roots in the Business Expansion Scheme of the late 1980s to the listing of Student REITs on the London Stock Exchange. As the sector has developed, it has seen the bulk of investment activity shift from UK owner-operators to UK based private equity and institutions, and now to global institutional investors. Savills league table of future development potential for purpose built student housing finds 11 leading UK university cities and towns have opportunities for investors. The rankings for 2015, published in the report, are designed as a matrix to assess development potential, based on a number of factors including current and future supply and demand and the private rented sector. Top of the table are Bath, Bournemouth, Brighton, Bristol, Cardiff, Edinburgh, Kingston upon Thames, London, Manchester, Oxford and St Andrews. The next tier includes Aberdeen, Belfast, Birmingham, Cambridge, Canterbury, Chester, Chichester, Coventry, Durham, Exeter, Glasgow, Leeds, Plymouth, Portsmouth, Sheffield, Winchester and York. But those to pass on include Bolton, Bradford, Carlisle, Chislehurst, Cirencester, Coleraine, Cranfield, Hull, Ipswich, Middlesbrough, Newport, Paisley, Preston and Sunderland. ‘Despite a 1.7% fall in overall student numbers over the 2013/2014 academic year, full-time students, the key metric of student accommodation demand, increased, as did the number of students from non-European Union countries,’ said Neal Hudson, Savills research. ‘Following on from our analysis last year, the introduction of higher fees appears to have sustained a flight to quality. Falls in student numbers are typically highest in lower ranking universities, while higher ranking universities have generally seen an increase in domestic and foreign students,’ he added. The report points out that using UCAS data to look ahead, overall university applications and acceptances are up 3.4% and 3.3% respectively for the current academic year, equating to 16,800 more acceptances than the previous year. This brings the total number of students to over half a million for the first time. It also says that increased investment activity in the sector has led to yield compression across all sub-markets. This has particularly been the case for investments in prime London where direct let net initial yields are now below 5% at 4.75%. For 2015, Savills forecasts total returns of 14%. This is comprised of average blended yields compressing by 25 basis points and rental growth of 3.5%. Continue reading
Slowdown has led to boost for Spain’s long term property rental market
The economic downturn has led to a significant rise in the number of people renting a home in Spain for the long term with strong demand from nationals and foreign residents, new data shows. Overall the Spanish rental sector has doubled in the last five years, according to the data from the country’s National Statistics Institute and figures also shows that yields are up to 7.6% for long term lets. Indeed, improving yields has prompted many investors to turn to Spain as the next buy to let destination of choice with data from Idealista showing that yields have increased from 4.7% a year ago, to 5.3% currently. Popular tourist areas, such as Las Palmas de Gran Canaria offered returns of up to 6%. A modern, one bedroom apartment with sea view can be rented out for €700 per month, while a spacious three bedroom townhouse with sweeping views of the bay and port costs from as little as €145,000. Nor is it just tourist areas that offer strong returns. The highest yielding area, according to the Idealista figures, is the Catalonian regional capital of Lleida, where returns have reached 7.6%. A two bedroom, three bathroom, high spec apartment with balcony there can be picked up for €207,800. The news that Spanish rents rose for the first time in seven years in the first quarter of 2015 is further attracting the interest of buy to let investors with their eye on solid returns. According to Fotocasa, the average price of rental accommodation rose by 2.8% during the first quarter of this year, to €6.96 per square metre per month. Added to all of this is the surge in demand from tenants, with the size of the rental sector more than doubling from 7% just over five years ago to 16.6% in 2014, according to figures from the National Statistics Institute's Continuous Household Survey. ‘The past few years have seen a significant increase in the number of people in Spain looking to rent property on a long term basis,’ said Martin Dell, Director of Kyero.com, the portal which lists property sales, holiday rentals and long-term rentals. He added that Kyero's long term rentals site has experienced strong demand, from Spanish nationals and from foreign residents, while the firm’s sales site has received interest from investors looking to build up buy to let portfolios while property prices remain low. While more than half of rented homes house foreign tenants, Spanish nationals are increasingly looking to rent due to the flexibility that doing so provides. Following nearly a decade of high unemployment, the Profile of the Tenant in 2014 study has revealed that labour mobility is the main reason that many opt to rent a property rather than purchase one. The same study provides an interesting insight into the average tenant, who is aged between 35 and 44 years old, married and with a university education. They are professional tenants with families. Some 22% are looking to rent due… Continue reading
