Weekly Property Round Up
This week on the property news blog, Nick Sissling looks at the attractiveness of the London property market for Chinese investors, plans to build new skyscraper in Paddington and the effect of the slump in the London house market on Foxtons.
The Chinese have arrived and they're here to stay
This week marked an important event in Anglo-Chinese relations as Chinese president Xi Jinping spent the week in the UK on a state visit. £30bn of trade deals are expected to be agreed as the UK look to improve relations with China.
This will only serve as good news to some of China's largest property developers, many of whom are on the way to realising plans for large ambitious residential developments in London. Chinese investors, including the country’s richest man, Wang Jianlin, have got the ball rolling with the development of One Nine Elms near Vauxhall. Work has just begun on the 58 and 43 floor residential towers which will also accommodate a five-star hotel, a cinema and luxury KTV karaoke rooms. The project's aim was to appeal to the Chinese market as an investment during a time where the Chinese economy is starting to look a little volatile – as a result, over 30% of buyers have come from the Far East.
It is expected that this will open the doors to other investments in the Capital. Shanghai-based developers Greenland are looking to invest £1,2bn in London property in the coming years. This included plans for luxury apartments in Wandsworth on the Ram Brewery site, and a 67 storey residential development in Canary Wharf, which if successful, will be the tallest apartment building in Western Europe.
As relations with the UK and China improve and VISA restrictions are reduced, more and more interest into the UK property market is expected to come from Chinese investors.
Skyscraper to transform 'lifeless' Paddington
The Italian architect, Renzo Piano is looking to breathe life into Paddington with plans for a £1bn transformation of the area including a 65-storey skyscraper home to luxury apartments, offices and a roof garden.
The Italian property tycoon, who built the Shard, claims that currently people only go to Paddington to either 'catch a train or to see someone in hospital'. He believes the area is 'soulless and has no life' despite being in a fantastic location – close to Hyde Park and Marble arch with great transport connections to Central London and Heathrow.
If the plans go ahead, the building will be the forth highest in the Capital. It will aim to rejuvenate the neighbourhood the same way that The Shard has for London Bridge. The application for planning is expected to be submitted to Westminster council in the coming months, and if given the go-ahead, completion is scheduled for 2020.
The proposal will provide 200 new homes and has already been backed by Singapore investors, Hotel Properties.
Foxtons hit by slump in housing market activity
High London prices and stamp duty reforms are being blamed for the 'historically low' levels of property transactions in London in the third quarter of 2015. As a result, London-focused estate agent Foxtons has been hit hard with shares falling almost 7%.
Despite earnings and sales commissions being up over 10% on the previous year, it has announced Central London transactions are very subdued and taking more time to recover than previously expected.
As a result, Foxtons have opened several new branches in high growth areas in outer London where the market is more buoyant as a result of people being priced out of more centrally located properties.
Travis Perkins, the UK's largest building supplies firm, saw a similar fall in fortunes as the company makes plans for a 'modest reduction' in renovations and improvements given the slowdown in secondary housing transactions throughout 2015.