News

Source: Prime Resi

There’s no sign of a reversal in fortunes for London’s tumbling super-prime sales market, according to some sterling new research by Carter Jonas. Here’s the findings in a nutshell…

Sales

• Despite a significant cooling in some PCL markets throughout 2013 and the early part of 2014, Q2 2014 witnessed a return to strong capital value appreciation for most PCL areas.
• Relatively strong demand from domestic buyers boosted by a spring market led to this surprise upturn.
• Knightsbridge reinforced this trend, where a flat previous 18 months have been left behind with a 5.7% capital value growth witnessed in H1 2014.
• The one exception to the growth witnessed in H1 2014 is the Super Prime market where quarterly capital values have been falling since spring 2013 with no sign of a trend reversal.
• Our data showed average falls of 11% in this market from June 2013 to June 2014.
• Wandsworth and Fulham have now matched and exceeded the more established PCL markets of Holland Park and prime W2.
• Due to a prolonged period of stagnation, capital value growth levels in Knightsbridge have been matched by the Mayfair and Marylebone markets, with all three markets recording a ten year capital value growth of between 160-180%.
• Due to falling buyer enquiries across most markets, we expect capital value growth rates in PCL to slow significantly during H2 2014.
• We also expect Outer Prime growth rates to cool during this period, albeit not to the same degree as core PCL.

Lettings

• Stock levels of rental product remained high within most Prime and Outer Prime London markets, with demand
  relatively static due to flat levels of recruitment in the City.
• Poorer quality stock has tended to suffer, experiencing longer voids and sharper price reductions.
• Rental values in the 12 months to June 2014 remained relatively flat with overall PCL rents dropping just over 1%.
• In the outer core market, a fractional fall of -0.1% was recorded in Wandsworth and an increase of 2.9% was recorded in Fulham.
• Although volatile, the Knightsbridge and Mayfair markets have produced the strongest rental growth since 2006.
• Marylebone has proved the most stable market with its consistency and continuing out-performance of PCL rents as a whole, outstripping that of PCL as a whole for seven out of the last eight years.

Note: Data from July 2014

Buying a square metre of Kensington and Chelsea property now costs roughly the same as a new entry-level Ford Fiesta.

With one square metre costing £10,854, the area is the most expensive local authority in the country to live in. According to data from Halifax, average house prices in this and six other London boroughs have shot up by more than 50 per cent per square metre since 2009.

But while every borough in London has seen an increase, many other areas are still well below the levels they were at five years ago.

The map shows how prices have changed between 2009 and 2014, with the local authorities shown in blue recording price decreases. Data for the regions in grey was not provided.

Scotland and Wales in particular are struggling to see a recovery in their housing markets, with 26 of 30 local authorities in Scotland and 15 of 22 in Wales below 2009 levels.

London, however, is a different story. Every borough in the capital has seen an increase in its price per square metre over the same period.

It is in some of the richest boroughs in 2009 that have seen the greatest percentage increases. These areas are clustered around the centre, while those authorities which have seen relatively modest increases are towards the periphery.

The figures show that Lambeth was the region to record the highest increase in price in the last five years, with a jump from £3,180 to £5,180 per square metre, a rise of 61 per cent.

The lowest percentage increase was in Barking and Dagenham, which saw a 16.5 per cent rise; still far higher than the median national change of four per cent. In total, seven areas in London, which include Lambeth, Kensington and Chelsea, Lewisham, Harringey and Hackney, have seen prices leap by more than 50 per cent per square metre.

Other districts such as Camden, Islington and Southwark aren’t far behind, with increases close to 50 per cent.

Highest and lowest prices

Every one of the 10 local authorities with the highest price per square metre was in London. The cheapest 10 were all outside the capital, in Scotland, Wales and the north of England.

It is in some of the richest boroughs in 2009 that have seen the greatest percentage increases. These areas are clustered around the centre, while those authorities which have seen relatively modest increases are towards the periphery.

The figures show that Lambeth was the region to record the highest increase in price in the last five years, with a jump from £3,180 to £5,180 per square metre, a rise of 61 per cent.

The lowest percentage increase was in Barking and Dagenham, which saw a 16.5 per cent rise; still far higher than the median national change of four per cent. In total, seven areas in London, which include Lambeth, Kensington and Chelsea, Lewisham, Harringey and Hackney, have seen prices leap by more than 50 per cent per square metre.

Other districts such as Camden, Islington and Southwark aren’t far behind, with increases close to 50 per cent.

There has been recent speculation that the housing market may be cooling in the capital as Mortgage Market Review (MMR) rules take effect and talk grows of the possibility of interest rate hikes by the Bank of England.

Source: City AM

London property developer British Land said today it’s just sold the most expensive Mayfair home ever – a massive 5,000 sq ft penthouse on Clarges Street in Mayfair, which sold for “materially above” the previous record of £5,000 per sq ft (which, fact fans, was set by a property on Mayfair’s Mount Street).

The company said it had sold another 18 apartments at the 10-storey development at an average of £4,750sq ft. When it’s complete in 2017, the scheme will contain 34 flats of between one and five bedrooms each, alongside 47,800 sq ft of office space.

Lucky residents will have access to a “wellness spa”, a swimming pool and even their own cinema room. According to British Land head of offices Tim Roberts, at least half the building’s new residents – who were specifically targeted – are “British-based”, while half are foreign, predominantly Indian.

The Clarges Estate in its original splendour (Source: Google)

Formerly the headquarters of the Kennel Club, British Land bought the Clarges Estate for £129.6m in 2012 – agreeing to rehome the Kennel Club was one of the conditions of its planning permission.

First-time buyers in England under the age of 40 could buy a house at 20% below the market rate if the Conservatives are re-elected, David Cameron has pledged.

The Conservative leader said a future government led by him would build 100,000 new homes for such people.

They would be built on brownfield land already identified for development and exempt from some taxes, he said.

He was speaking as the party prepares for its annual conference this weekend.

Conservative politicians and activists will gather in Birmingham from Sunday for what is the final conference before next May’s general election.

No flipping

Unveiling the pledge – an extension of the Help to Buy mortgage scheme – Mr Cameron said the Conservatives wanted more young people to “achieve the dream” of owning their own home.

“I want young people who work hard, who do the right thing, to be able to buy a home of their own. So these starter homes will be sold at 20% less than the market value.

“They can’t be bought by foreigners, they can’t be bought by buy-to-let landlords, they can’t be flipped round in a quick sale. They can only be bought by hard working people under the age of 40.”

The starter homes plan would apply only to England, whereas Help to Buy is UK-wide.

That scheme entails the government offering a 20% equity loan to buyers of new-build properties.

Mixed communities

Shadow housing minister Emma Reynolds said Mr Cameron had presided over the lowest level of house building in peacetime since the 1920s.

“After four and a half years he now tells us that he is going to deliver for first-time buyers but under his government a record one in four young people are living at home with their parents and young people across the country are priced out of home ownership.

“Labour will make the fundamental changes to the market which are urgently needed and will double the number of first-time buyers in the next 10 years.”

Campbell Robb, of homelessness charity Shelter, welcomed the pledge but said it was “absolutely vital” that the homes built were “genuinely affordable for young couples and families on ordinary incomes”.

“There’s a real concern that removing the requirement on developers to build affordable housing means this policy may not help those facing the greatest struggle to get a home of their own,” he said.

Grainia Long, of the Chartered Institute of Housing, said she welcomed “the focus on supply and affordability” but still had “some serious concerns”.

She said: “This smacks of building for one group of people at the expense of another.

“Social housing is critical if we are going to solve the housing crisis – there are always going to be people who can’t afford to buy and we must provide decent, affordable homes for them too.

“Equally, we’d like to see more investment in shared ownership to help people on lower incomes. If all the focus is on home ownership, we are never going to build mixed communities.”

‘Raft of taxes’

Under the new proposals, the homes would be built on brownfield land which was no longer needed for industrial or commercial use.

Savings from using such land would be passed on to the buyers, the Conservatives said.

Public sector land would also be used to deliver the pledge.

The homes would be exempt “from a raft of taxes”, Mr Cameron said, such as the community infrastructure levy and a requirement to build social housing as part of any development.

Some building regulations – including the zero carbon homes standard – would also not apply to the new units.

The zero carbon homes standard, which applies from 2016, aims to improve energy efficiency.

It requires house builders to decrease all carbon emissions from energy arising from fixed heating and lighting, hot water and other fixed building services – such as ventilation – in new homes.

Source: BBC

Even with hundreds of years of history under its belt, Greenwich isn’t content to rest on its laurels. Instead, this Thameside town thrives on the thrill of the new while remaining immensely proud of its heritage.

Greenwich was originally a fishing village, which grew after Henry V’s brother enclosed a large tract of land in 1433 to create the park.

He also built a riverside palace where Henry VIII, Mary Tudor and Elizabeth I were born. The palace was later replaced by the twin-domed Old Royal Naval College, designed by Sir Christopher Wren.

Across the road is the Queen’s House, commissioned in 1616 by James I’s wife, Anne of Denmark, and now part of the National Maritime Museum. It was Britain’s first Palladian building and its elegant proportions and classic lines were regarded as revolutionary by those accustomed to timber-beamed Tudor architecture.

The Old Royal Observatory in Greenwich Park is another Wren building and home to the Prime Meridian of the world. Time in every place on Earth is measured from here, and you can straddle the Meridian line and stand with a foot in each hemisphere. From the Observatory there are sweeping views of the river, City and Docklands.

Greenwich’s historic and architectural importance was officially recognised in 1997, when Maritime Greenwich was awarded World Heritage Site status.

The borough of Greenwich also received another rare accolade early in 2012, the Queen’s Diamond Jubilee year. In honour of its longstanding links with the monarchy, it became a Royal Borough, one of only four in the country.

There was further cause for celebration that summer when Greenwich Park hosted the Olympic and Paralympic equestrian events and parts of the modern pentathlon.

Two years on, the feel-good factor shows no sign of subsiding. Greenwich has a real buzz, bags of charm and plenty to attract homebuyers as well as day trippers.

It’s big on the cute period cottages that young professionals and creative types adore, and offers ready-made entertainment day and night.

‘Greenwich has everything: the park, the river, the Maritime Museum, the Cutty Sark, the Observatory, the market, pubs, coffee shops and restaurants. There’s always loads going on and it’s great for young kids,’ says Graham Lawes of estate agency Jones Lang LaSalle.

‘Many attractions are free – from the entry to some of the museums and to festivals and music recitals. The commute is a dream – you can leave your desk in Canary Wharf and be home in half an hour, or even walk to work.’

Greenwich station has the DLR and trains to London Bridge, Waterloo East and Charing Cross. It’s in Zone 2 and an annual Travelcard into Zone 1 costs £1,256. You can also catch the DLR at Cutty Sark station, the Jubilee Line from North Greenwich or take a Thames Clipper along the river to Embankment.

‘The Olympics put Greenwich firmly on the map. This year there’s a resurgence of people looking to buy,’ continues Lawes. ‘Some who’d been trapped in rented accommodation are now getting on to the property ladder, and there’s a migration of buyers from north and west London, as well as the local market.

‘One-bed flats start at about £300,000, and two-bed cottages which sold for £400,000 last year are now £500,000 to £550,000. Three-storey Victorian houses in the Ashburnham Triangle – popular with career-driven couples in their early thirties – are £900,000 to £1.2million, and larger period houses in Hyde Vale and Gloucester Circus sell for £1.5 to £3million.’

The lettings market is busy too, boosted by University of Greenwich students. Rents start at around £750 a month for a studio.

Greenwich Hospital Estate – which owns riverside land and the central commercial area – is upgrading old buildings and transforming space above shops into rental apartments for locals.

It’s providing further rental homes in an eco-friendly new-build scheme of four two-bed townhouses and three two-bed apartments by Trehearne Architects on Old Woolwich Road. Rents are from £1,325 per month, through Jones Lang LaSalle.

New homes in several high-spec developments are currently for sale across Greenwich. Galliard Homes’ New Capital Quay is surrounded by water on three sides and features 636 apartments kitted with Miele appliances, TVs in en-suite bathrooms and 24-hour on-site security. Prices start at £458,000.

At Prime Place, by Willmott Dixon, the final phase of one, two and three-bed apartments has been launched. All come with balconies, some have access to a terrace, and two-beds are priced from £475,000.

Greenwich Square, by Hadley Mace, is being created around a public piazza, with leisure facilities, shops, cafés and amenities, plus a mix of apartments, maisonettes and townhouses. Two-beds are from £499,950 and four-bed townhouses, from £750,000, will be launched next month through Savills.

Homes at The Peltons in east Greenwich range from one-bed flats to four-bed houses, from £305,000. And at United House Developments’ Paynes & Borthwick, 90 per cent of apartments are now sold. Prices for those remaining range from £595,000 to £1million.

The north-west and central London property market has seen phenomenal amounts of activity with huge demand for properties in recent times. In the first quarter of the year, we saw an increase of 82% in our buyer registrations compared to the start of 2013.

During the same period, we saw nine prospective buyers register for every new property instruction and in particular we have been inundated by cash rich buy to let investors, as well as first time buyers making the most of Help to Buy and mortgage availability.

These buyers are particularly active in Crouch End, Islington, West Hampstead, Highgate and Muswell Hill and are mostly looking for properties under £500,000. Indeed, these sales accounted for 16% of all transactions across north-west and central London in the last six months.

Confidence in the economy, low interest rates and improved mortgage availability are all factors contributing towards buyer activity and in addition to international interest, there has been a huge rise in the number of local buyers looking to invest.

This year we’ve seen record numbers of viewings for properties hosting an open day. North London has seen huge levels of interest, with our West Hampstead branch recording almost 100 viewings on just one property.

As a result, the gap between asking price and selling price has closed hugely as we find that increasingly properties are selling above asking price.

According to the Land Registry, boroughs such as Islington and the City of Westminster have performed exceptionally well recording an annual rise in property values of 20.6% and 17.5% respectively. In the last few weeks however, we’ve begun to see the market become more normalised with the number of buyers starting to level out.

As a result, we should begin to see the sharp increases of the past year begin to stabilise although activity will, of course, remain high as confidence continues.

In the rental market meanwhile, we have seen increase in demand from corporate tenants, and with many of these tenancies spanning longer term lets of three to five years, landlords feel more secure with many actively targeting this market.

We have also seen good demand for homes among families, often those who have sold a property and are considering their next move. School catchments in this sector, for example in Muswell Hill, are a key driver of demand for some addresses and also generate a premium, sometimes by as much as 20%.

While many of our areas still have good availability of stock, the family market of West Hampstead is currently experiencing a stock shortage, which might support rental price growth over 2014.

The national asking price average rose to £272,003, a 3.6 per cent rise which is the biggest on record since April 2002.

Agents blame the late Easter and May bank holidays, which meant that many owners didn’t put their homes on the market, causing an even greater lack of supply in peak house hunting season.

Demand for housing remains strong: email enquiries to agents on Rightmove were up by nearly 20 per cent so far in 2014, compared to the same period last year.

The annual rate of increase is now 8.9 per cent, the highest year-on-year rise since October 2007, when it was 10.4 per cent.

In London however, the new seller average asking price of a property is up by 16.3 per cent (+£82,893) year-on-year compared to an average 4.9 per cent (+£11,028) in the rest of England and Wales, leading to allegations that the capital’s housing market is in dangerous ‘bubble’ territory.

However, Rightmove’s Miles Shipside says that for a bubble to pop there would have to be a sustained drop in demand, which he can’t see happening in London: ‘Agents in the capital report a consistently high level of would-be buyers in markets that are not yet out of reach for Londoners.’

The average asking price in London is up by nearly £80,000 so far in 2014, an average of £4,405 per week compared with the weekly average of the rest of the country, which is £1,521.

10 out of 32 boroughs have seen annual increases of over 20 per cent. Asking prices in Tower Hamlets rose by 43.1 per cent (+£186,809) which is the largest in London, mainly because prices in Canary Wharf are distorting the figures, say local agents.

Canary Wharf-based Ben Butler, Sales Manager of Morgan Randall explains the borough’s 43.1 per cent increase: ‘A number of areas of Tower Hamlets are investor territory, with a number of cash buyers in the market and accidental landlords, who have been sitting on the side-lines since 2008 taking advantage of the buoyant conditions and selling up.’

Butler estimates that around 65 per cent of the properties he sells are to cash buyers and he hasn’t sold a property for below asking price since around August 2013.

‘As an example, one property sold in December 2013 for £425,000 and in March of this year an identical property in the same building sold for £575,000. That’s a £150,000 difference in just a few months,’ he says.

Agents in the north of the country are blaming the boom in the south for ‘unrealistic’ asking prices by sellers.

Paul Wilson of Dacre Son & Hartley in Leeds says:

‘All the talk of the rising prices in London and a supposed nationwide bubble has created a wave up the country of vendors raising their expectations, and in some cases putting their property on the market for too high an asking price than is realistic in the market here.

‘Those properties that are put on at sensible prices are moving quickly, so we are advising people they need to be realistic with what they expect to get.’

Exclusive new research reveals the true cost of a modest starter home in each of the capital’s boroughs – ranging from £159,340 in Barking and Dagenham, to over half a million pounds in a prime central London location.

The true cost of getting on to the property ladder across London is revealed today. Exclusive new research shows exactly how much a modest starter home in each of the capital’s boroughs will cost — ranging from a surprisingly affordable £159,340 for those prepared to house hunt in Barking and Dagenham, to well over half a million pounds (and rising) for those who aspire to a first home in prime central London.

The figures, by Savills, show first-rung prices in almost half of the capital’s boroughs are now above the £250,000 stamp duty threshold, meaning buyers will be liable for three per cent tax on their purchase.

The data is based on an analysis of the price of “lower quartile” property sales — that is homes that are in the cheapest 25 per cent of those sold and the kind of properties first time buyers are most likely to aim at.

The areas to look at are those that combine affordability with strong capital growth.

In Haringey, starter homes are priced at an average £250,313, up 16 per cent over the same period. In Lewisham they come in at an average £205,523, up 15 per cent, while in Greenwich they are priced at £206,520, up 14 per cent. Enfield (£207,703, up 13 per cent); Bromley (£224,866, up 12 per cent) and Brent (£246,311, up 12 per cent) also combine price growth and (relatively) low pricing.

James Cooley, senior sales manager at Kinleigh Folkard & Hayward in Blackheath agreed that price rises across Greenwich have been “astronomical” over the last year, but warned that first time buyers needed to be realistic about the type of property on offer to those on limited budgets. The cheapest flat he can currently offer is a “pokey” one bedroomed flat in Shooters Hill, on the market for £215,000 or a studio flat in Lewisham for £250,000.

The area Cooley has seen biggest growth in over the last year has been east Greenwich, thanks to an overspill of buyers priced out of central and west Greenwich. He estimates prices have risen in this particular area by between 30 and 40 per cent.

The most economical options include Bexley (£174,753), Havering (£183,921) and Newham (£184,176). However the research also shows that first time buyers face something of a Catch 22. Because although they will naturally be driven towards the cheapest boroughs what today’s research shows in graphic detail is that these areas are slow in price growth and still catching up from the recession. Prices in Barking and Dagenham are currently four per cent lower than in 2007, while prices in Havering and Newham are unchanged from levels seven years ago meaning that while these areas are affordable buyers cannot expect any capital growth in the short term and may, thanks to inflation, end up trapped in first homes.

Predictably prices are highest in central London: Kensington and Chelsea leads the pack with average prices of £595,455, followed by Westminster (£472,500) and Camden (£394,655). These areas have also seen the strongest price growth up 47 per cent in Kensington & Chelsea and 44 per cent in Westminster. Cooley says, ‘These areas are clearly the privilege of the rich. I cannot see how anybody else will be able to buy here.’

A handy checklist can make all the difference when you’re buying a home. So, here’s a useful planner, where you can tick off various stages once you’ve completed them.

Good luck with your purchase and happy moving!

• Decide if you’re ready to buy
• Have you got a deposit saved up?
• Work out how much you can afford to spend
• Find the best mortgage offer for you
• Get an offer lined up from a lender
• Work out other costs you’ll have to cover
• Meet and register with estate agents
• Consider hiring a property search agent (if appropriate)
• Match a property to how you live
• Consider old vs new homes
• Weigh up ‘free’ offers or incentives from developers or private vendors
• Ask about service charges
• Check out parking, storage and council tax
• Consider doing up a wreck, buying at auction or with a friend or family member
• Think about government-supported shared ownership schemes, such as FirstBuy
• Work out a ‘home triangle’: budget, space and location
• Draw up ‘would like’ and ‘really need’ lists
• Consider extending your search if you can’t find anything within your budget
• Ask agents to show you ‘comparables’ (prices of similar property in the area)
• Research prices paid recently for properties in the area and current home value trends.
• Check out crime rates, transport links and whether prices have risen or fallen
• Choose a solicitor
• If buying with a friend or partner, get a co-ownership agreement drawn up
• Ask to see the Energy Performance Certificate for the property
• Make enquiries if buying a leasehold flat (who’s the freeholder and managing agent, how much are ground fees and service charges, can you keep pets?)
• Make an offer in writing
• Ask for an exclusivity period, if possible (so the seller doesn’t show the property to anyone else)
• Agree a date when the vendor moves out and you move in
• Show proof that the lender will give you money (if getting a mortgage)
• Check the solicitor is making enquiries and getting title deed information
• Choose a surveyor
• Organise a survey or valuation
• Set the completion date
• Book a van or removals company
• Inform authorities (such as utility companies, Electoral Roll, your employer and Inland Revenue) of your new address
• Contact the council to suspend a parking bay for the removal van
• Get the mortgage deed for the solicitor to sign
• Sign contracts for exchange
• Pay the balance of the property’s price
• Get the transfer document and title deeds
• Take out building and contents insurance
• Pay stamp duty, Land Registry and solicitor’s fees
• Check your insurer covers you for any damage while moving
• Tell the removals company about narrow roads or unusual directions
• Pack, ensuring fragile items are well wrapped
• Label each box with a number or letter corresponding to the room where it will go
• Pack a ‘moving box’ with essentials including tea, cleaning materials and a bottle of bubbly
• Keep passports and other vital items with you
• Pack a bag for each person with a toothbrush and change of clothing
• Get someone to mind your pets (or make sure they’re secure)
• Get the keys to the property
• Enjoy living in your new home!

14th Apr 2014- Zoopla

House prices in the UK will rise by 7.4 per cent in 2014 as cautious lenders and tighter borrowing conditions cool the market.

This month sees the introduction of the Mortgage Market Review and this measure is expected to prevent the creation of a property bubble similar to the one experienced during the economic crash, the EY ITEM Club stated in a new report.

It has forecast growth of 7.2 per cent in 2015, followed by an increase of 4.2 per cent in 2016 once the mortgage guarantee scheme ends.

The government created Help to Buy in order to make it easier for first-time buyers to get onto the property ladder, as it means it is possible to buy a new-build or existing home priced up to £600,000 with as little as a five per cent deposit.

FCA has to make its mark 

According to the study, the Financial Conduct Authority (FCA) has a vital role to play when it comes to keeping a lid on the market, as it has the macro-prudential tools at its disposal to make sure income multiples of borrowers do not become too stretched.

Peter Spencer, chief economic advisor to EY ITEM Club, said the UK housing market is not currently experiencing a “typical debt-fuelled recovery”, as the increase in gross mortgage lending has been financed by existing borrowers swelling their repayments.

“New mortgage lending remains at rock bottom while government initiatives such as the Help to Buy schemes will be having little impact on prices in London, where activity is fuelled by cash rather than mortgage borrowing,” Mr Spencer stated.

“The FCA will assume crucial importance to ensure multiples do not become too stretched and that affordability is scrupulously checked. If these controls are rigorously applied this will eventually constrain London prices, particularly in hotspots like Hackney, and head off problems when interest rates rise.”

London house prices rises out of this world

Despite house sales slowing in March, average prices have risen to £17,500 in the last 12 months to £262,291 – the highest annual rise since September 2010.

The latest LSL Property Services/Acdata England and Wales House Price Index shows that poor weather and a shortage of homes took its toll in March.

However, this did not stop significant growth taking place in London, where price rises were twice as fast as any other region.

David Newnes, director of Reeds Rains and Your Move estate agents, said this is a clear indication that the city is “operating on a different playing field”.

“The bottom line is we simply need more homes, not just to satisfy the growing demand but also to curb prices from rising beyond reach,” he added.

Mr Newnes pointed out house hunters hoping to buy at the lower end of the market in London are facing an uphill battle to fulfil their dreams, which demonstrates why the lack of housing supply needs to be addressed.

He is also calling for the government to puts its “rhetoric into practice”.