TSI
South West London likely to see 165,000 new homes with 36,000 by 2020
Nearly 60% of new housing supply in south west London will be concentrated in Wandsworth, Lambeth and Hammersmith and Fulham local authority areas, according to new research. An estimated 165,000 new homes could be delivered in south west London with 36,000 being delivered to the market in the next five years, the report from Savills Research says, with these three borough providing 60% of this supply. The new housing will be in clusters at Nine Elms, White City, Earls Court and Wandsworth Town. The borough of Wandsworth is anticipated to supply the market with the largest quantum of units at almost 8,000 over five years. Taking south west London as a whole, 45% of the five year supply pipeline is anticipated to be priced above £1,000 per square foot, 43% is between £450 per square foot and £1,000 per square foot, with the remaining 12% priced under £450 per square foot. Much of the anticipated development will be built along the river, with the highest values in the study area found along the river at the South Bank, Nine Elms and Fulham. The report breaks the possibilities into sectors. In White City the five year new housing pipeline amounts to 2,300 private units with three schemes greater than 1,000. The average new build values are expected to be £900 per square foot to £1,200 per square foot. The area is likely to be popular due to significant investment from institutions such as the BBC and Imperial College London, the report explains and the scale of development is underpinned by the fact that White City is an Opportunity Area consisting of 110 hectares, with potential for 4,500 new homes. No schemes have been brought to the market yet but BBC Television Centre is due to launch in 2015/2016. In Putney the five year sales pipeline amounts to 470 units ranging from small to medium sized developments of 20 to 155 homes. The average new build values are predicted to be £800 per square foot to £1,050 per square foot. Demand is likely from a wide pool of people including investors, young professionals and second home owners which have already has helped drive development along the Upper Richmond Road. Many new developments are replacing post-war office blocks by developers such as Crest Nicholson, London Realty and Art Estates. London Square’s development has helped mitigate loss of commercial space by also providing adaptable office premises, the report points out. In Vauxhall Town the five year pipeline amounts to 1,750 units with average new build values of £900 per square foot to £1,250 per square foot, ranging from 40 to 700 units. The report says that significant investment into infrastructure is helping drive development including the transformation of Vauxhall gyratory. The Northern Line extension will help to reduce traffic through Vauxhall station. In Ealing Town the five year pipeline amounts to 200 private units with an average values of £700 per square foot to £1,000 per… Continue reading
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
UK house prices up 2.6% in first quarter of 2015, latest index shows
UK house prices were 2.6% higher in the three months of 2015 than in the previous quarter but the annual rate of growth is still falling. The latest index from the Halifax shows that annual price growth fell slightly from 8.3% in February to 8.1% in March, taking the average price of a home to £192,970. The quarterly rate of change increased for the third consecutive month. It is now at a similar rate to September 2014 when it was 2.7%, prior to a marked slowdown in the last three months of 2014. The data also shows that house prices increased by 0.4% between February and March, offsetting February’s 0.4% fall. According to Halifax’s housing economist Martin Ellis the recent return to real earnings growth for the first time in several years, very low mortgage rates and last December’s stamp duty changes are supporting housing demand. ‘The rising level of house prices in relation to earnings should, however, curb house price growth and activity,’ he added. He also predicts that the annual rate of house price growth, which has continued to ease in the first quarter of 2015, is forecast to end the year at 3% to 5%. The index report also points out that housing supply remains tight. According to figures from the Royal Institution of Chartered Surveyors new instructions fell again in February suggesting that the trend remains down following January’s modest rise, which was the first increase in six months. However, house price optimism rebounded in February as inflation continued to fall and the expectation of an interest rate rise receded further, according to the Halifax Housing Market Confidence Tracker. Ellis said that this optimism is reflected in the outlook for both buyers and sellers, with buying sentiment up to its highest level since the Confidence Tracker launched in 2011 at net +35. At the same time, selling sentiment reached an all-time high and now stands at +27. The report also mentions the regional differences in stamp duty. Some 81% of residential stamp duty revenue raised in the UK in 2013/2014 was in the four regions of southern England; Greater London, South East, South West and East of England, according to the HMRC. This was significantly higher than their 71% share in 2007/2008 when total stamp duty revenues were at a similar level at £6.68 billion in 2007/2008 against £6.45 billion in 2013/2014. London alone contributed 42% of all UK stamp duty revenues in 2013/2014 compared with 28% in 2007/2008. Indeed, London was the only region to see an increase in revenues between 2007/2008 and 2013/2014. Continue reading
