More affordable homes to be built in one of London’s most expensive locations

The London borough of Kensington and Chelsea has some of the most expensive properties in the UK but a new development of affordable homes has been approved.

The Mayor of London Sadiq Khan has taken over the Notting Hill Gate scheme and doubled the amount of affordable housing being built to 35%.

Under the new plans some two thirds of new affordable homes will be available at social rent levels, others capped below the London Living Rent level.

The application to redevelop Newcombe House in Kensington and Chelsea was refused by the local council in March, before the Mayor took over the application later that month. The borough has consistently failed to meet targets for new and affordable homes. Khan pointed out that last year no affordable homes were given planning permission by the council.

Through his takeover, the Mayor has secured amendments to the plans that increase the level of affordable housing from 17 to 35%.

The development will also include a medical centre, step-free access to the nearby Notting Hill Gate underground station and a new public square with permanent pedestrian and cycle access.

‘Since taking office, I’ve been clear I will use all the levers at my disposal to increase the supply of council, social rented, and other genuinely affordable homes that Londoners need across the capital,’ said Khan.

‘Having considering all the evidence available to me, and following hard work by my planning team to increase the level of affordable housing, I have decided to grant permission for this development,’ he explained.

‘What’s more, the development will also include important new step-free access to Notting Hill Gate station, a major improvement benefitting local residents and visitors coming to enjoy this vibrant and exciting part of the capital,’ he pointed out.

‘London’s housing crisis won’t be solved overnight but I hope this will send a clear message that I expect developments to include more genuinely affordable housing and other benefits for local people,’ he added.

https://www.propertywire.com/news/uk/more-affordable-homes-to-be-built-in-one-of-londons-most-expensive-locations/

Rent-to-rent firm says London lettings market led by Tech hubs

Rent-to-rent operator Residently says area with high volumes of tech company employees are leading the lettings market’s growth in London.

The firm provides landlords with long-term guaranteed income in return for their properties being put into Residently’s portfolio of rental properties across the capital; tenants enjoy additional services including cleaning, laundry and storage, and can move around the Residently network.

Now the firm says growth in the capital is strongest across tech centres such as Shoreditch, King’s Cross, Hammersmith, White City, Soho and Battersea.

Soho has seen the strongest growth of all London’s tech hubs, with rents increasing by 26 per cent over the last year according to the firm, while Shoreditch experienced far smaller growth of just 1.7 per cent over the same period. Hammersmith - where Disney, General Electric, L’Oreal and Fox TV have bases - have seen values rise by 8.0 per cent.

“People no longer want to slog across London to reach their office, meaning the quality of housing in areas surrounding tech headquarters has continued to improve as workers relocate to be near work” says Residently’s chief operating officer Trevor Stunden. 

“Gone are the days of a job for life or a home forever. People no longer necessarily want to purchase a property in the capital, especially if they work for a start-up, or international tech firm that could take them abroad at any time.”

He says London now employs more people in the technology, media and telecoms sectors than it does in finance, adding that the rise in collaborative and creative co-working spaces has also contributed to the success of these hubs, acting as a ripple effect on the wider local environment. 

In particular, this “tech ripple” has transformed a number of downmarket locations across London into places where people really want to live, as well as work, says the firm.

“Our flexible contracts are suited to modern day renters, not locking them into lengthy commitments. A huge benefit of our network of properties is that our residents can move between our properties seamlessly within a single agreement. We plan to expand to all major tech-hubs in the coming years enabling this to happen internationally” he concludes.

https://www.lettingagenttoday.co.uk/breaking-news/2018/9/rent-to-rent-firm-says-london-lettings-market-is-led-by-tech-hubs

Report reveals what tenants need to know before renting inShare

As the number of tenants looking for a new home in Britain has increased every month since May, letting agents have released a new report revealing the kind of things they need to know.

It points out that tenants can switch their utility bills, just like those who own their own home but they should double check their tenancy agreement to see if there is a clause which means they need to inform their landlord of the change.

Landlords usually aren’t happy for tenants to start redecorating their properties but according to the report from the Association of Residential Letting Agents (ARLA) there’s no harm in asking.

It explains that tenants need to seek permission to install extra shelving, hang things off the walls, or anything which could damage the property and also need to ask to paint anything, or replace the units.

ARLA advises that tenants with a pet should be upfront about it when they’re looking for a property. Some landlords won’t allow them at all, but many will be fine with pets, although they may ask for a higher deposit to cover any potential damage. Tenants need to make sure any extra deposit is clearly stated in their contract.

It explains smoking cannabis is not permitted and the drug is illegal in the UK, and there will probably be consequences for anyone caught smoking it behind closed doors. There’s usually a specific clause in rental contracts which says tenants must not consume illegal substances in the property, and subject to the landlord’s consent, many contracts prohibit any smoking in the property at all.

Although it is legal to run a business from a residential property, a tenant must ask a landlord’s for permission. This is because the landlord might need to inform their mortgage provider, as well as getting permission from the freeholder if the property is in a block of flats.

A landlord would probably also need to update their insurance, and make sure they are not breaking any licensing conditions the local authority has placed on the property too. General wear and tear could also be an issue if the business wasn’t just desk based, and they need to make sure the business wouldn’t disturb neighbours if people are coming and going throughout the day.

‘Finding a rental property can be a stressful task, especially if you’re unfamiliar with all the clauses in your tenancy agreement, but it can also be really exciting. The most important thing to remember is that once you sign the tenancy agreement and move in, you’re still bound by it,’ said Peter Savage, ARLA president.

‘While most landlords are very willing to negotiate, these discussions do need to take place and you should never assume your landlord won’t mind without some sort of commitment in writing. Letting agents can help you both with understanding the small print in your contract and by helping you negotiate directly with the landlord,’ he added.

https://www.propertywire.com/news/uk/report-reveals-tenants-need-know-renting/

Property market is solid across most of the UK, latest index survey shows

The residential property market in the UK is experiencing diverse regional variations but overall it is solid in many parts of the country, according to the latest surveyor survey report.

Robust price growth and solid sales activity is reported across Scotland and Northern Ireland while London, parts of the South Est and East Anglia are more sluggish, the August survey by the Royal Institution of Chartered Surveyors (RTCS).

Overall, new instructions have dropped further across the UK as a whole and sales expectations suggest activity is likely to remain stronger away from the south of England.

In Northern Ireland, sales growth was again solid in August and 48% more respondents to the RICS survey saw a rise in prices which marks 60 consecutive months of an increase. In Scotland, 36% more respondents have seen a rise in prices, with the reading averaging +35% in the first seven months of the year.

Near term sales expectations suggest both of these markets will continue to see positive momentum through the remainder of the year, says the RICS report.

Alongside this, prices continue to increase firmly across the North West, the Midlands and Yorkshire and Humberside. The offsetting impact on the headline figure is provided by weakness in London and the South East, leading the headline figure to signal no change in prices over the period as far as the national market is concerned.

Looking at sales activity, in which regions again differ, the newly agreed sales net balance nationally saw 10% more respondents recording a fall rather than rise in August, which represents the most negative reading in five months.

Regionally, after a sharp fall in activity at the end of last year, current sales trends are stabilising in London, but momentum is still slipping across East Anglia and the wider South East while sales in August were solid across Northern Ireland and Scotland, but also in the South West.

‘While a combination of a lack of stock and some level of uncertainty, both relating to the interest rate outlook and Brexit, has had an impact on activity, the overall picture in these areas is still encouraging,’ said Simon Rubinsohn, RICS chief economist.

‘The story in London and the South East is, as has been widely recognised, rather more challenging but it is important that this is not seen as being indicative of the wider market,’ he added.

He pointed out, that going forward, near term sales expectations suggest this regional divergence will persist, with the market remaining relatively stronger away from the South of England, with market activity in the South West predicted to drop back.

The survey has previously reported the lack of supply in the housing market as one of the main impediments to activity, and the latest results continue to show that the average inventory of unsold stock on estate agents’ books is still close to historic lows and the report explained that this is not aided by 15% of respondents seeing a fall in new instructions over the month, pointing to a decline in the supply of fresh stock coming on to the market.

Demand wise, interest from new buyers nationally remains flat, showing a slightly more cautious approach from property purchasers. This is somewhat unsurprising in the wake of the Bank of England’s decision to increase interest rates in August alongside the broader political and economic uncertainty. Even so, buyer appetite is still reportedly strong in Northern Ireland and Yorkshire and Humberside.

In the lettings market, the latest numbers point to a further decline in fresh rental stock in August, a trend that has been emerging on the back of tax changes on buy to let properties, while tenant demand continues to rise firmly.

RICS says that rents are therefore expected to rise at a faster rate than house prices in the medium term, with average rental growth projections standing at around 3% per annum over the next five years whilst prices are projected to rise by around 2% on the same basis.

Russell Quirk, chief executive of Emoov, pointed out that sales are stabilising in London while both sales and price growth remain very strong in other regions. ‘These areas will continue to carry their weaker counterparts as we approach the end of 2018,’ he said.

‘In addition, wage inflation is now at parity with house price growth and this should spur a renewed level of buyer demand. This in turn will lift the historically low stock levels that are contributing to a muted market performance as home sellers emerge from their Brexit boltholes with a better chance of achieving a higher sold price,’ he added.

According to Adam Male, director of lettings at Urban, the index shows that the buy to let sector continues to suffer. ‘A further decline in rental stocks is a direct consequence of landlords exiting the sector, a sector that was already in desperate need of more rental stock to meet demand, not less,’ he said.

‘Rising rents may be welcomed by landlords with the resolve to jump through the latest lot of legislative hoops rather than throwing in the towel, but a 3% hike will be hard for those already struggling with current rental affordability,’ he explained.

‘While the short term forecast looks positive for the sales market, there are challenges ahead for the rental sector due to the strain of growing demand and dwindling stock,’ he added.

https://www.propertywire.com/news/uk/mortgage-rates-rising-buy-let-landlords-new-tracker-suggests/

New £1 billion fund announced for building new homes in England

The Government and Barclays have announced a £1 billion housing development fund to help deliver thousands of new homes across England.

Under the agreement loans ranging from £5 million to £100 million, which will be competitively priced, will be available for developers and house builders who are able to demonstrate the necessary experience and track record to undertake and complete their proposed project.

Funding is open to new clients as well as existing Barclays clients, and will put greater emphasis on diversifying the housing market, as at present almost two thirds of homes are built by just 10 companies.

A key priority of The Housing Delivery Fund is to support small and medium sized businesses to develop homes for rent or sale including social housing, retirement living and the private rented sector, whilst also supporting innovation in the model of delivery such as brownfield land and urban regeneration projects.

‘There is a vital need to build more good quality homes across the country. This £1 billion fund is about helping to do exactly that by showing firms in the business of house building that the right finance is available for projects that help meet this urgent need,’ said John McFarlane, Barclays’ chairman.

Housing Secretary James Brokenshire said that it will see Barclays in partnership with Homes England also help to see more design and innovation introduced to new home building.

‘It is a further important step by giving smaller builders access to the finance they need to get housing developments off the ground. This is a fantastic opportunity to not only get more homes built but also promote new and innovative approaches to construction and design that exist across the housing market,’ he added.

According to Sir E Lister, chairman of Homes England, the organisation will play a more active role in the housing market and do things differently to increase the pace, scale and quality of delivering new homes.

‘The Housing Delivery Fund demonstrates Barclays’ commitment to the residential sector and will provide a new funding stream for SME developers to help progress sites and deliver more affordable homes across England,’ he said.

Brokenshire added that it will move towards the target of 300,000 new homes being built a year by the mid-2020s and that with 217,000 homes built last year, England has seen the biggest increase in housing supply for almost a decade.

https://www.propertywire.com/news/uk/new-1-billion-fund-announced-building-new-homes-england/

Latest lender index suggest British residential property market is stable

House prices in the UK increased by 3.7% year on year in August compared and were also up month on month by 0.1%, the latest lender index shows.

The data from the Halifax also reveals that on quarterly basis prices rose by 1.9%, taking the average price of a home to £229,958.

Russell Galley, managing director of the Halifax, pointed out that the annual rate of growth increased from 3.3% in July. ‘While the pace of employment growth has recently slowed, a low unemployment rate and a gradual pickup in wage growth are helping to support household finances,’ he said.

‘This has been accompanied by interest rates still remaining at a historically low rate and a stable, yet constrained, supply of new homes onto the market further supporting house prices,’ he added.

The figures are a sign of stability in the housing market, according to Russell Quirk, chief executive officer of Emoov. ‘We’ve seen prices maintain an upward trend since May now and although only marginal in August, this is widely expected and actually quite impressive for what is usually a very slow time of year for property transactions,’ he explained.

‘These latest figures suggest that the market is yet to lose its resolve and in fact, we should see market activity pick up significantly from now until Christmas bringing prices with it,’ he added.

But Kevin Roberts, director of the Legal & General Mortgage Club, a lack of adequate housing stock continues to impact the market, limiting the options for those looking to move onto and up the housing ladder or even downsize.

‘The result is that borrowers are being forced to rely on others, such as the Bank of Mum and Dad, which funds one in every four housing transactions. If we are to create a housing market that is fair and accessible for everyone, Government and industry must work together to deliver the additional 300,000 houses that we desperately need each year,’ he pointed out.

The stability is helpful as Britain moves ever closer to the date in March next year when the country leaves the European Union, according to James Newbery, investment manager at property investment platform British Pearl.

‘A fourth consecutive month of growth shows that Britain’s housing market is still on relatively robust ground. Annual growth continues to tick over reassuringly and these figures prove that the market is far from teetering on the edge,’ he said.

‘Investors are holding steadfast and are taking advantage of a market underpinned by a lack of stock, growing household incomes and a solid labour market. And despite the Government’s tightening grip on buy to let and painfully low transaction levels, we are still to see a sudden rise in stock availability due to landlords abandoning their portfolios,’ he explained.

‘The future direction of the market remains an unknown, but this latest data from the Halifax shows there is no immediate reason to abandon ship,’ he added.

https://www.propertywire.com/news/uk/latest-lender-index-suggest-british-residential-property-market-stable/

Call for planning change to help housing associations built more homes

Planning rules should be relaxed to allow housing associations to build more affordable homes in the UK, a new report suggests.

They are currently beset by planning and funding issues and this is having a detrimental effect on their ability to build what is needed, according to a survey from Gowling WLG.

It found that 96% of surveyed housing associations will make savings in the next 12 months and 76% are undertaking commercial build to sell housing development activities to generate funding.

It also found that 92% of housing associations consider themselves ‘under pressure’ to cut costs in line with Government funding decreases and austerity targets, whilst 96% say they plan to tighten expenditure in the next year.

In addition, 68% believe planning inflexibility impedes their ability to build, while 62% think leniency surrounding their Section 106 obligations would help them develop commercially successful schemes.

‘Our findings show that the appetite and potential for housing associations to build more homes is there, but the research also suggests that, for most, significant steps need to be taken to allow them to make a really meaningful impact,’ said Jacqueline Knox, partner and social housing expert at Gowling WLG,.

‘Planning reform that helps housing associations to make the most of their potential influence in the build to sell market and by doing so to cross-subsidise their affordable housing schemes, could be a significant contributor to delivering more social housing.

‘In light of these findings, relaxing of planning obligations for not for profit housing associations at a national level could provide a feasible option to unshackling prohibitive restrictions on housing associations,’ she explained.

The firm says that changes that would have a significant impact could include improved access to planning officers, changes to speed of planning consent, relaxation or abolition of Section 106 obligations, prioritised access to public land and financial support for brownfield remediation works.

‘It may seem counter-intuitive that relaxing planning for housing associations could enable them to better fulfil their social objectives, but without a dramatic sea change in the public funding of housing associations, facilitating successful commercial profit-making functions is likely to be key to driving further investment in affordable housing,’ Knox added.

https://www.propertywire.com/news/uk/call-planning-change-help-housing-associations-built-homes/