TSI
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
UK’s fledgling Build to Rent sector dealt stamp duty blow
The UK’s fledgling Build to Rent sector has been dealt a blow with the announcement that large investors will not be exempt from a new extra stamp duty surcharge that is introduced in a few weeks’ time. From 01 April there will be an extra 3% stamp duty payable on additional homes and it has been hoped that those investing in more than 15 properties would be exempt, and Chancellor George Osborne had indeed hinted at this. However, in his Budget announcement he confirmed that large scale investors in buy to let properties will pay the extra 3% which will apply equally to purchases by individuals and corporate investors. Melanie Leech, chief executive of the British Property Federation, said the move would hit the private rented sector. ‘The government’s decision to not include an exemption for investors who are purchasing large portfolios of properties for rent is extremely disappointing, and deals a huge blow to the build to rent sector,’ she pointed out. ‘This is going to be a significant deterrent to the institutional investment currently poised to settle in the purpose-built rented sector, which has the opportunity to deliver a significant number of new, quality affordable homes,’ she added. The failure to give relief from the additional stamp duty levy for large investors could inhibit the development of a much needed institutional private rented sector, according to Lucian Cook, Savills UK head of residential research. ‘While purchases of six or more residential properties can be treated as a non-residential transaction, the reform of stamp duty on commercial properties is likely mean greater entry costs for large scale residential investors one way or another. Our recent analysis suggests there will be demand for another one million private rented households in the next five years despite policies to boost home ownership,’ he explained. Investors could be put off, according to several experts, including Steve Sanham, development director at HUB. ‘A threshold on how many homes the stamp duty surcharge applies to is also crucial for institutional landlords and investors. The aim of delivering more homes will not be achieved if investors are put off from creating large developments of new homes to begin with,’ he said. Elizabeth Bradley, head of the corporate tax team at international law firm Berwin Leighton Paisner, also believes investors will be discouraged. ‘Much of the British property industry will be very disappointed with the Budget changes,’ she said. ‘The Chancellor has acknowledged the need to build more homes but the extension of the extra SDLT rate on buy to let to large investors will discourage investment in the private rented sector,’ she added. Continue reading
