Investment
Bling could be back in Dubai property market
Some of the bling that once characterised the Dubai real estate market is set to return with celebrities seeking to build a new breed of luxury villas and over 50 shelved projects being resurrected. From the ordinary buyer and seller perspective some 51 real estate projects valued at AED12 billion are being revived with government backed funding initiatives which means that developers registered with the Dubai Land Department can get building again. Some 12 projects worth AED2 billion are underway and along with others set for starts in 2016 the initiative will see developers like Emaar Properties, Al Wasl and ICD-Brookfield working on projects. To get the funding the projects need to have adequate infrastructure planned or already in place, a properly managed escrow trust account for off plan sales under Dubai real estate law, a technical report showing that at least 60% of the construction is completed and at least 60% of the project has been sold. Meanwhile, the famous Palm Jumeirah is set to be rejuvenated with reports that leading celebrities and wealthy individuals are looking to build luxury villas on the manmade island. This could see a series of lavish Los Angeles style super villas being built, according to property agent Anne Ogilvie, Palm luxury sales specialist at Luxhabitat. She believes that wealthy investors are set to return to Dubai. ‘These end users look to buy plots on the remaining unbuilt fronds in order to build super villas, akin to those in California or Miami. We expect a sizeable number of them to build and then introduce them to the secondary market,’ she said. However, there are a number of issues associated with development on Palm Jumeirah. Some owners are not happy that fees for extensions to their existing villas have increased by 233%. Under the terms and conditions laid out in developer Nakheel’s Guidelines and Procedures for Villa Extension Applications, residents are required to pay an application fee as part of the approval process before they can start construction. According to property experts this means that for an extension of 1,000 square foot an owner would end up paying over $100,000 to Nakheel but on Palm Jumeirah the fee for a 1,000 square foot extension could be over half a million dollars. Continue reading
North West of England named as most lucrative region for PRS landlords
The North West of England is the most lucrative region in the UK for private rented sector landlords with Manchester and Liverpool coming out top for rental yields. The latest quarterly report from online property marketplace LendInvest also shows that Cardiff, Coventry and Oldham come next, followed closely by Sunderland, Blackburn and Durham The report, which tracks changes in trends in rental yields, capital gains and landlords’ total return on investment, also shows that London and the South East lead house price growth. Indeed, all of the top 15 performing postcode areas for capital gains are located in London and the surrounding area. However, inner London takes only 18th place for rental yield, but is top for capital gains Overall, capital gains continue to track average house price and 80% of the 15 best postcode areas for capital gains also feature in the top 15 for average house prices. However, the report points out that rental yields are no indication of average house price. Only one of the top 15 postcode areas for rental yield also features in the top 15 for house prices. Christian Faes, chief executive officer of LendInvest, believes that tax changes could impact the market next year. ‘There could be some weakening in London’s dominance of capital gains tables if house price growth does soften slightly as forecast, and as new buy to let stamp duty hikes take effect,’ he said. ‘Inner London margins may narrow slightly, creating opportunities for house prices in other postcode areas, particularly those in the south of England, to better compete,’ he added. But he also explained that changes to mortgage interest tax relief and stamp duty for landlords will help to professionalise the buy to let market and this would benefit tenants and aspiring home owners. ‘Landlords whose tax payments under the new regime make letting their properties unsustainable, may make arrangements to leave the market. In turn, we will see fewer highly geared rental properties that push up prices and take stock out of the housing supply for aspiring owner occupiers and first time buyers drawn to densely populated urban area for work,’ explained Faes, He also said that across the country there is still no one place for market leading yields and capital gains and 2016 could be the year of the ‘cross country landlords’, professional landlords who live in one city and rent out houses in another. ‘We could expect to see more landlords letting property in the North and Midland’s major urban areas for more immediate upside, without moving from their family homes in which gains can be longer to materialise,’ he added. Continue reading
Investigation reveals alarming flood risk for new homes in UK
Floods have already hit thousands of homes in the UK this winter and now an investigation has found that many more homes being built under the government’s new home building drive are also at risk. Nearly half the areas earmarked for fast tracked housing development by a flagship government scheme are at significant risk of flooding, making thousands of new homes potentially uninsurable, according to a Greenpeace investigation. The sites targeted by a recent house building drive unveiled by Chancellor George Osborne include two areas threatened by the latest floods and others which were inundated during previous emergencies, the Greenpeace report says. It claims that the findings raise more questions about the government’s approach to flood risk management amidst growing controversy over delays in the construction of flood defences for existing homes in areas hit by flooding in Cumbria and Lancashire in recent days. Earlier this year, the Chancellor announced a flagship housing scheme which saw 20 brownfield sites around the country designated as new housing zones, with local councils given access to money and experts to expedite the building process. Greenpeace UK researchers used details obtained through Freedom of Information requests to plot the location of these housing zones, and cross referenced this with flood risk maps from the Environment Agency. They found around nine of the 20 zones, comprising a total of 9,000 planned new homes, are in areas now identified as being partially or fully at risk from flooding. Under the terms of a new government flood insurance scheme soon to be implemented, these properties would be excluded from cover. The report claims that this would leave home owners reliant on commercial insurers who may choose not to insure homes built in flood zones, or do so at prohibitively expensive rates. A spokesperson for Flood Re confirmed to Greenpeace that ‘properties built from 2009 onwards’ in flood risk areas are still excluded from the government scheme. ‘It would be irresponsible to incentivise developers to build in such areas simply because those properties could have their insured flood risk ceded to Flood Re,’ the spokesperson added. Greenpeace UK also obtained new figures showing that the number of people employed by the Environment Agency to work on Flood and Coastal Erosion Risk Management fell by 230, a 5% cut, in the last three years. The agency plays a key role advising councils on flood risk. ‘The current flood emergency isn’t even over yet, and the government is already storing up the next one. Rushing to build thousands of new homes in flood risk areas whilst at the same time cutting flood protection staff is a recipe for disaster,’ said Greenpeace UK chief scientist Dr Doug Parr. ‘When it comes to energy, flood defences, and other big infrastructure projects, we need the government's hands to start following what the government's mouth is saying rather than acting of their own accord,’ he added. The details in the report indicate that in Yorkshire there are flood warnings… Continue reading
