Weekly Property Round Up
Sam Fisher has stepped up to provide us with this week's property blog focusing on property development and London's housing market soaring high above all.
The Prime Minister making more promises
David Cameron has promised to sweep away planning rules that require property developers to build affordable homes for rent in a bid to increase the building of homes for first-time buyers.
In a bid to shift from generation rent to generation buy, Cameron has said in his speech at the Conservative party conference on Wednesday that he hopes his new starter homes proposal can unblock house building in the UK by abolishing demands that developers provide a certain amount of affordable housing to rent in new developments.
In the key reform, ministers will change the definition of affordable housing to include not just properties for rent, but starter homes, as part of the government’s programme to build low-cost homes for first-time buyers so long as they are under 40 years old. It will mean developers will have fulfilled their obligations to a council if they build homes for purchase.
Under the scheme, houses must be 20% below the market rent and capped at £450,000 inside London and £250,000 outside. Buyers will be prevented from selling them on for up to five years, in an attempt to stop developers buying and selling the properties.
The initiative is designed to secure 200,000 homes for new buyers by the end of the parliament, one of the key election pledges of the Tory election campaign. Officials said the changes to the planning rules will mean it is possible to lever in billions of private sector development in low-cost housing.
The scheme is likely to be popular with developers, who prefer building homes for purchase as they immediately receive income on the property’s sale, unlike a rented property that involves a much slower rental income stream spread over as long as 20 years.
Government officials said there is a massive untapped demand for low-cost homes to buy, which the market is prevented from providing due to current state rules and section 106 agreements.
In its productivity plan published immediately after the summer budget, the government also set out plans to order councils to deal with planning requests much more quickly (We'll believe it when we see it!).
Hold on to your hats, there could be some exciting changes for property developers!
London soars high in global prime property league
The scale of London’s property bubble is laid bare in a recent report that reveals how the capital has dramatically outstripped New York and every other major city in the world on prices and sales over the past five years.
In 2009, there were 2,147 sales of luxury houses and apartments in London in the £1m to £3m bracket, which put the city behind Hong Kong and roughly on a par with New York. But by 2014, sales in that price bracket in London had ballooned to 6,250 – double the number in Manhattan and triple the number in Hong Kong, Singapore and Sydney.
In the ultra-prime market – properties selling above £3m – the rich residents of Manhattan are now the poor cousins to Londoners. There were 1,638 properties sold in London for more than £3m in 2014, compared with 796 in Manhattan, 258 in Sydney and just 21 in Los Angeles.
One reason why London has, for now, moved ahead of New York is not just its attractions to the global elite but also a rising population and workforce, said Knight Frank, particularly in the finance and IT sectors. Londoners employed in finance, insurance, IT and telecoms rose from 1.28 million to 1.56 million between 2009 and 2014, outstripping the 1.1 million employed in the same sectors in New York and 0.8 million in Hong Kong.
With the AVERAGE house price in London set to hit £1 million by 2020, how much longer can property values in London continue to rise?!
Healthy living: NHS buildings given new life as modern homes
Refurbished state of the art modern homes is one of the most popular property trends right now, and many of these pictureseque period buildings were formerly hospitals.
Bassets Campus was sold recently for £15 milion.
Since April 2013 NHS Property Services has been managing 4,000 buildings worth £3billion. Although only 10 per cent of the NHS estate, it is one of the largest property portfolios in Europe. Every pound made through sales or saved by no longer needing to maintain empty buildings is put back into the NHS and in its first two years the company has reduced the running costs of the property and services it manages by more than £78million.
Last year it also generated £97million in cash receipts for the NHS. Only land and property declared surplus by local healthcare commissioners can be sold, with public sector organisations given priority to buy them, but the biggest recent NHS sale went for £15million to award-winning developer London Square.
Bassetts Campus in the South London borough of Bromley is a former residential care facility that has been empty since November 2013 and Andrew Strange, NHS Property Services’ Head of Planning and Development, says: “The sale of Bassetts Campus to London Square has the potential to bring an empty site and a locally important building back into use, as well as providing a number of homes in response to London’s recognised need for housing.”
While Bassetts Pond is a development to watch, there are plenty of others in former NHS buildings around the country. For instance, in Bristol phase two of a collection of 205 one to four bedroom new and converted apartments and houses, is nearing completion. Graylingwell Park in Chichester has been transformed from the 1897 building that was used as a military hospital in the First World War and an NHS hospital from 1948 until its closure in 2001. The final NHS services were moved in 2009 and it is now one of the UK’s largest carbon-neutral developments.
Some of the natives living near these reconditioned hospitals may feel ambivalent towards the luxurious homes though. For many, the old NHS hospitals were the place they were born. However, the developments are for a good cause, helping a lot of people onto the property ladder through the help to buy scheme whilst making use of redundant buildings.