News

Cheaper to Avoid Help to Buy, New Research Shows

First-time buyers on the lookout for a new home may find it cheaper to simply avoid using the government’s Help to Buy Equity Loan scheme, according to a survey by price comparison site ReallyMoving.

A first-time buyer using Help to Buy would find themselves paying an average of £303,000 in February 2019 on a new home, compared to £270,000 for a first-time buyer not relying on the scheme.

This disparity results from first-time buyers having had to pay an average premium of 12 per cent when making purchases through the scheme in February 2019, when compared to first-time buyers who never joined the scheme.

Help to Buy is typically sought after by first-time buyers as a means to help them get a foot on the housing ladder, but strong demand for the scheme could actually be making it more costly, and the research raises the question of whether or not developers are charging higher prices on homes enlisted in the scheme.

First-time buyers dominate

ReallyMoving revealed this extra cost, after the government reported that it estimated Help to Buy had helped as many as 400,000 people onto the housing ladder.

First-time buyers were estimated to have accounted for as much as 57 per cent of total homebuyer activity in the UK in early 2019, according to ReallyMoving.

During this period of first-time buyer dominance, the Help to Buy Equity Loan premium also reached a record high, rising from just 7 per cent in August 2018 to an average of 12 per cent by February 2019.

As many as 18 per cent of first-time buyers expressed the intention of building an entirely new home instead of seeking a pre-existing or second-hand one, according to ReallyMoving.

Possible problems selling

Rob Houghton, CEO of ReallyMoving, said: “Help to Buy is indeed helping first-time buyers get onto the housing ladder, but these figures suggest that they may be paying more than the property is worth in order to get the help they need to raise a deposit.”

Explaining the added costs associated with the scheme, he claimed: “This could be either because developers are charging a premium or because first-time buyers are encouraged to buy a more expensive property because the scheme gives them greater spending power.”

Houghton acknowledged that first-time buyers resorting to the scheme could find potential problems when finally deciding to sell, saying: “They may find their property is worth less than they paid for it, made worse by the fact that they could be competing with new developments nearby that are available with Help to Buy, while their own property is no longer ‘new’ and therefore ineligible for the scheme.”

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Government Proposes to Scrap No-Fault Evictions

The government has proposed the scrapping of Section 21, which entitled landlords to make ‘no-fault’ evictions. This move could potentially create indefinite tenancies, according to the National Landlords Association (NLA).

For many years, landlords have been allowed to use Section 21 notices during evictions, which did not require them to state a clear reason for wishing to take possession of property from tenants. Under new proposals, landlords would find they have to give valid reasons for seeking to evict their tenants.

Under the new proposals, landlords would not be able to evict a tenant without reason after a fixed-term tenancy had concluded. Tenants would no longer face eviction at short notice as a result. Landlords currently make use of Section 8 notices to evict tenants for breaching terms of a tenancy.

The proposals come after a campaign calling for the scrapping of Section 21 by pressure group Generation Rent.

Dan Wilson, director of Generation Rent has claimed: “Tenants have a right to a safe home, but can only exercise it if the government stops landlords from evicting without reason.”

New deal for renters

Communities secretary James Brokenshire announced the new government proposal, saying: “The private rented sector has grown rapidly over recent years, with more than four million people now living in privately rented accommodation…yet the housing market has not kept pace with the changes in society and leaves many tenants feeling insecure.”

“The proposed measures will provide greater certainty for tenants”, he added, “and make the housing market fit for the 21st Century, whilst creating a more secure rental market for landlords in which to remain and invest.”

Onus on government

The NLA, who are critical of the moves, claimed landlords are forced to turn to using Section 21, as they have “no confidence” that the courts can handle Section 8 applications “quickly and surely”.

Richard Lambert, CEO of the NLA, commented: “England’s model of tenancy was always intended to operate in a sector where Section 21 exists. This change makes the fixed term meaningless, and so creates a new system of indefinite tenancies through the back door.”

Lambert put the onus on the government, saying: “It’s entirely on the government’s ability to re-balance the system through Section 8 and court process so that works for landlords and tenants alike … if the government introduces yet another piece of badly thought-out legislation, we guarantee there will be chaos.”

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Autumn start for Mount Anvil’s largest ever scheme

London developer Mount Anvil, in partnership with ExCeL London, has secured planning for phases two and three of its Royal Docks development in East London.

The 800-home scheme located on the Western Gateway of the dock adjoins phase one, known as Royal Docks West – a 19-storey tower, which was launched successfully to market in spring 2017 and is now 90% sold.

The two new phases called Royal Eden Docks have been designed by architect SOM with 35% of the homes affordable.

Now construction will start in the autumn and run for over five and a half years, completing in 2024.

Emma Foster, development director at Mount Anvil, said: “Securing resolution to grant planning permission for phases two and three of Royal Eden Docks is a landmark moment for the site.

“The success of phase one demonstrated buyer demand for homes in this part of London, and in a period when the capital is gripped by an acute housing shortage, it’s important that we are working in partnership with the GLA to bolster the delivery of new homes for Londoners.

“Phase one brought substantial investment in the community and surrounding infrastructure, and we look forward to building on that investment with the construction of phases two and three.”

The project will create an estimated 147 new construction jobs every year and Mount Anvil is targeting at least 35% of those to go to local people. In addition, 30 apprenticeships and 10 work experience placements will be created over the duration of the development.

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Plans go in for giant entertainment sphere in Stratford

The Madison Square Garden Company (MSG) has submitted plans for a futuristic sphere-shaped music and entertainment venue in Stratford, east London.

MSG want to build the 90-metre tall scheme on a 4.7 acre former coach park near the Olympic Park.

The 120-metre diameter building will take three-years to construct and will have a capacity of 21,500 people.

The sphere will sit on a four-storey base filling the whole site and its exterior will be clad with triangular LED panels displaying moving images.

Alongside the main venue MSG also plans a smaller music club/nightclub, retail space, a café, and restaurants.

Jayne McGivern, MSG’s Executive Vice President of Development and Construction, said: “This is an opportunity to take an inaccessible coach park and use it to support thousands of jobs, and billions of pounds of economic benefit.

“Our plans make training and local hiring a priority and would create a premier destination that serves as a long-term investment in the future of Newham, London, and the UK.

“If our plans are approved, we believe MSG Sphere will complement London’s existing venues and drive overall growth in the music and entertainment market – benefiting residents, artists and fans.”

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Go-ahead for £600m south London high rise scheme

Landowner Aviva Investors and leading London developer Galliard Homes have gained planning for a new £600m ‘town centre’ development on London’s Old Kent Road.

Cantium Retail Park scheme

The new development will involve construction of the Capital’s fourth tallest residential tower at 48-storeys, shops, offices and over 1,000 new homes.

Situated at 520 Old Kent Road, the 5-acre Cantium Retail Park scheme has been designed by local Southwark architectural practices – Brisac Gonzalez and Alan Camp Architects.

There will be four buildings rising to 37-storeys, two 11-storey and one of nine-storeys surrounding a central podium. The residential element of the buildings will be mixed tenure with separate cores for private sale, shared ownership and social-rented homes.

The new homes will include a mix of apartments, maisonettes, penthouses and townhouses, and 60,000 sq ft of offices, 24,000 sqft of retail space, 25,144 sqft of flexible space for restaurants, café, cinema and leisure premises and 6,415 sqft of space for cultural facilities such as a youth theatre or mini-opera house. The shops, restaurants and cafes are expected to create up to 580 new jobs.

The podium and one of the 11-storey buildings fronting onto the Old Kent Road will provide the majority of the development’s commercial floorspace, with 10 per cent of the space at discounted rent for start-up firms and small and medium-sized entreprises.

The new development will have a six-year construction programme. Existing Cantium Retail Park anchor tenants will be included in the development and the developers are holding discussions with other tenants about making provisions for them within the scheme.

Helen Rainsford, Senior Director at Aviva Investors said: “Aviva Investors is pleased planning consent has been granted for the regeneration of Cantium Retail Park.

“Working with Galliard Homes, we believe we can create a superb residential-led mixed-use development that will transform the site for the benefit of the local area.”

Stephen Conway, Executive Chairman of Galliard Homes said: “The regeneration of Cantium Retail Park will serve to kick-start the wider planned regeneration and transformation of the entire Old Kent Road into a vibrant new high quality commercial, retail and residential destination for South London.”

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£900m Bishopsgate Goodsyard scheme downsized

Hammerson and its development partner Ballymore have dramatically downsized proposals for the £900m Bishopsgate Goodsyard scheme in London.

Developers Hammerson and Ballymore have cut tower heights on Shoreditch scheme

Under local pressure for more housing, the proposed rejigged scheme will now have twice the number of homes at 500 units and a landmark office tower has been cut in height from 46 storeys to 29 storeys.

Overall, the revised proposals for developing The Goodsyard see the removal of the two high-rise residential towers originally proposed for the site in the existing planning application.

The JV is also significantly increasing the size of the proposed public park at the 10 acre, mixed-use urban quarter in the heart of Shoreditch.

Proposals now include 1.4m sq ft of offices and affordable workspace, 175,000 sq ft of shops, a destination building for cultural space on Brick Lane, as well as an elevated park.

The developers, working with master planner FaulknerBrowns Architects, Eric Parry Architects, Buckley Gray Yeoman, Spacehub, and Chris Dyson Architects, consulted on revisions to the existing planning application for the site in November.

Original high-rise plans for Bishopsgate Goodsyard site

John Mulryan, group managing director at Ballymore, said: “Bishopsgate Goodsyard is an incredible site, packaged with a great deal of challenges.

“Thanks to a combination of over five different railway lines and tunnels passing through this site, as well as many heritage assets and structures to be brought back into use, there are a number of site constraints in play.

“The site offers significant development potential that is also capable of being sensitive to the townscape.”

Tony Coughlan, Development Manager at Hammerson, said: “Working closely with the GLA and the local boroughs, we have reviewed our proposals with the aim of further optimising the number of homes, while maintaining a balanced mixed of uses.

“We are excited to bring forward this updated masterplan which we feel realises local ambitions and converts this derelict area into a vibrant new space; bringing a currently unused site back to life in the heart of Shoreditch.”

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Bouygues paid £21m not to build Garden Bridge

Contractors chosen to build the ill-fated Garden Bridge were paid £21.4m before the project was finally binned.

Figures released by Transport for London detail payments to the Bouygues Travaux Publics and Cimolai SpA – Joint Venture.

Consultant Arup was also paid more than £12m in fees among a total of £53.5m wasted on the project.

The documents state the contractors were paid for “mobilising significant resources, systems, labour, supply chain and support networks to further refine the designs, create prototypes and samples, submit designs for approval by Arup, liaison with third parties to secure rights and consents over areas to erect the bridge and submit details to discharge the planning conditions.”

They were paid £5.1m for the Preconstruction Services Agreement period and £13.4m for the period between being awarded the £90m main contract and the project being scrapped.

A payment of £2.1m was also made for the ‘The demobilisation of staff, offices and repatriation of plant and labour upon suspending the contract.”

Alex Williams, Director of City Planning at Transport for London said: “As part of our continuing commitment to transparency, we have published the final financial breakdown for the Garden Bridge project, on behalf of the Trust, as well as all evidence sought as part of this review.

‘This formally ends our involvement with the project.”

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Beetham Tower owner faces £4m reclad bill

The landlord of Manchester’s iconic Beetham Tower has revealed that replacing glazed cladding units will cost around £4m.

Beethan Tower builder Carillion first found sealant failures around glass panels in 2014

The High Court earlier this month ordered that landlord Ground Rents Income Fund must replace one thousand glazing panels on Manchester’s tallest residential tower because of safety concerns after the discovery that sealant used to fix the panels is failing.

It was given 18 months to complete the refit of the 47 storey building, after main contractor Carillion’s collapse stalled progress to find a remedial solution.

Problems with the sealant around some of the 1,350 single glazed insulated shadow box units was first uncovered back in 2014.

This revealed failure of the bond between the structural sealant and the polyester powder coating applied to the supporting cladding frames.

As a temporary fix, while a permanent solution was found, Carillion fitted pressure plates to the frame profiles to hold the panels securely in position.

This urgent safety work was completed over four years ago. But progress on the subsequent detailed investigation and assessment of options for a safe long term solution became so protracted that nothing concrete was agreed by the time Carillion collapsed a year ago.

Malcolm Naish, the Chairman of Ground Rents Income Fund said the firm continued to take advice on how best to respond to the judgment.

He said: “The court ordered the temporary hoardings which had been erected by Carillion outside the hotel as an exclusion zone to be removed by 28 February 2019. It is expected that the completion of their removal will be finished within days.

“The cost of the permanent remedial works to the façade of Beetham Tower, Deansgate, Manchester, has been estimated by NWGR’s advisers, based on their recommended solution, to be approximately £4.0m, excluding VAT, any professional advisory costs and damages yet to be determined.”

He added: “NWGR is pursuing the proceedings it has already issued against Carillion through its insurers and the sub‐contractor BUG, through existing warranties and indemnities, which, if successful, would greatly limit any potential liabilities or irrecoverable losses for NWGR.

“However, in order to comply with the judgment NWGR will be required to finance the remedial work and any litigation costs while
seeking recovery from Carillion’s Insurers and BUG. There can be no guarantee that NWGR will be successful in that recovery, but it has
received legal and expert advice which suggests that its case is strong.

“If NWGR is unsuccessful in its action against the original contractor’s insurers or the sub‐contractor, it may be able to recover some of the remedial works costs from other parties,” said Naish.

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Telford buys Stratford site for £160m homes plan

Telford Homes has exchanged contracts for the conditional purchase of a site on International Way in Stratford east London.

Telford has developed a series of sites in Stratford including the New Garden Quarter

The developer has acquired the plot for £20m from London & Continental Railways, the Department for Transport and HS1 Ltd.

The 1.14 site is adjacent to Stratford International station and Westfield Stratford City.

Telford will now deliver 380 homes with a gross development value in excess of £160m.

Jon Di-Stefano, Chief Executive Officer of Telford Homes, said: “I am delighted that Telford Homes has exchanged contracts on another acquisition involving LCR and HS1 Limited.

“We have enjoyed considerable success in Stratford developing more than 1,750 homes in the area over the last twelve years.

“This site is really well located next to the International station and Westfield, and is an excellent addition to our development pipeline.”

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Plan for 31-storey London tower near the Shard

Developer Great Portland Estates has submitted plans for a new tall building in the shadow of the Shard at London Bridge.

New office plan (right) next to Shard

A planning application has been submitted for the 31 storey office building at New City Court in the London Bridge Area.

Designed by AHMM architects, the offices will rise to 139m offering 370,000 sq ft of office and groundfloor retail space.

The project would require demolition of buildings at 20 St Thomas Street and would also see the front elevation of existing Georgian buildings retained and Keat House reconstructed.

The tower will boast a 250-seat auditorium and terrace on the 21st and 22nd floors and an elevated double height public garden within the building on the fifth and sixth floors.

Gardiner and Theobald is on board and has drawn up the construction management plan.

Toby Courtauld, chief executive, said the London Bridge project was one of its most exciting schemes in a development pipeline of 11 projects equating to 1.3m sq ft.

GPE has also committed to three projects in London.

In a trading update, he said at Oxford House, 76 Oxford Street, W1, demolition of the existing building is complete and groundworks have commenced.

At Hanover Square, W1, following the acquisition of the land in October 2018 that sits above the eastern entrance of the Bond Street Crossrail Station, GPE has commenced construction of the main office building at 18 Hanover Square.

The scheme will deliver 221,300 sq ft in total, comprising 167,200 sq ft of offices, 41,900 sq ft of retail and restaurant space and 12,200 sq ft of residential apartments.

Construction of  Cityside House near Whitechapel was progressing well with the  74,700 sq ft Grade A office and retail building expected to open at the end of this year.

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