Tag Archives: city
More affordable houses to be built at key London regeneration site
The Mayor of London has approved plans for the first major housing development at the Old Oak regeneration site in West London, after intervening to boost the number of affordable homes in the scheme. The Oaklands development will see 605 new homes built, together with a nursery, health centre and commercial space. A target of 50% affordable housing has been agreed for the development, following an intervention by the Mayor Sadiq Khan to boost the number of affordable homes through investment and a profit-sharing mechanism. Old Oak and Park Royal has the potential to deliver 25,500 new homes and 65,000 jobs over the next 30 to 40 years, as well as becoming the key transport interchange for Crossrail and HS2. ‘The development marks a significant step in realising the huge potential of this part of the capital. I am pleased that we have been able to increase the proportion of genuinely affordable homes as part of our ongoing efforts to fix the capital's housing crisis,’ said Khan. ‘The scale and ambition for this development shows London is very much open for business. Despite the uncertainty caused by the UK's vote to leave the European Union, it remains clear that developers and investors see long term potential in our city,’ he added. According to Neil Hadden, chief executive at Genesis Housing Association, the redevelopment at Oaklands in one of Hammersmith and Fulham's most important regeneration sites. ‘We will now be able to provide hundreds more affordable homes for Londoners on a once derelict site. Partnerships such as the one we have with Queens Park Rangers Football Club (QPR) enable us to invest, not only in building new homes, but in developing new communities. We will now be able to provide hundreds more affordable homes for Londoners on a once derelict site,’ he added. QPR co-chairman Tony Fernandes said the firm is committed to bringing forward other development sites in Old Oak as soon as possible to create the homes that London desperately needs. Of the 242 affordable homes, half will be for social and affordable rent, with the other half being for shared ownership. The application was approved by the Old Oak and Park Royal Development Corporation, the organisation that has planning control over the Old Oak regeneration site, on July 13, 2016. The project will also include a new link road into Old Oak which could unlock further development north of the Grand Union Canal. The initial application from Queens Park Rangers Football Club and their development partner Genesis Housing Association proposed 200 affordable homes or 33% of the total. The scheme has now attracted GLA Affordable Housing Grant Funding to raise the number of affordable homes to 242, some 40% of the total with a review mechanism to ensure that any surplus profit as the scheme is implemented will be used to provide more affordable units up to 50%. Continue reading
Commercial property more likely to be affected by Brexit than residential
Volatile markets since the UK voted to leave the European Union are clouding prospects for the nation’s real estate sector with commercial sectors most likely to be affected, according to a new analysis. Commercial real estate companies, especially those most exposed to London's financial districts, could be most affected by falling valuations and rents, followed by home builders in the higher end segment, says the report from S&P Global Ratings. ‘We anticipate the drop in valuation will be on average less dramatic for residential real estate assets than for the commercial sector, although it will vary between segments and geographies, the report says. ‘High end and luxury apartments in central London were already experiencing some negative trends in the past few months. We would expect this situation to continue given that this segment relies more heavily on foreign investors, which we expect may be even more hesitant buyers now, despite the fall in sterling,’ it points out. ‘On the other hand, we believe that value fluctuation in the mid-range and affordable segments will likely be more limited, especially given the structural undersupply of housing in the UK and the expected lower for longer interest rate environment. Any long term impact on migration flux as a result of a Brexit may nonetheless have some negative consequences on households' growth and ultimately on residential real estate overall. However, we view this risk as more remote for now,’ it explains. Home builders, the report says, could be more heavily affected by Brexit fallout than residential real estate investment companies. This is especially if demand for new homes starts falling should purchase decisions be delayed in the context of uncertainties created by the Brexit vote. ‘We understand that home builders are monitoring closely their weekly sales rates, footfall to showrooms, and mortgage approval rates, as key indicators of operating performance. These indicators seem to have remained relatively healthy so far, in particular in the affordable segment, and mortgage availability continues to be robust as opposed to the previous downturn in 2008/2009, the report says. ‘However, some deterioration cannot be ruled out, especially because the sector is strongly correlated to GDP growth, unemployment rates, and consumer confidence, which are all expected to be negatively affected in the coming months and years,’ it adds. The report also points out that home builders already observed some declines in sales rates in the second quarter of 2016, although this seems to have been related more to the change in stamp duty than concerns over Brexit, adding that a potential decline in house prices may also stretch margins for home builders. ‘While a drop in valuation of UK commercial assets of 10% to 20% or more would be detrimental to property companies, the robust fundamentals of the business model of real estate investment companies should limit any significant turbulence in operating performance, in our view, at least in the short to medium term,’ it points out. The climate could result in discounts being offered… Continue reading
Foreign buyers face new 15% extra property tax in certain parts of Vancouver
A new tax for foreign property buyers is being introduced in British Columbia in Canada in an attempt to cool escalating house prices. The 15% foreign buyer tax will come into effect on 02 August 2016 at a time when prices in the province’s capital city Vancouver are escalating. Indeed, the latest global cities index from international real estate firm Knight Frank shows that prices in the city have increased by 17.3% in the mainstream market and by 26.3% in the prime market in the year to March 2016. Policymakers have been looking at ways to cool price inflation in recent months and the new tax will relate to residential purchases in Metro Vancouver, an area that extends from Bowen Island to Maple Ridge/Langley Township. According to Knight Frank, in real terms the new tax will result in an extra $300,000 in property transfer tax based on a property bought for $2 million by a foreign citizen. This figure will rise to $1.5 million for a $10 million home. The latest government data shows foreign buyers, mainly from China, purchased more than $1 billion worth of property in British Colombia between 10 June 2016 and 14 July 2016 of which around 86% was located in the Lower Mainland. The foreign buyer tax will also apply to corporations that purchase residential real estate and the British Columbia Government has the power to examine the citizenship status of directors and the beneficiaries of corporate profits in deciding whether to add taxes. According to the Finance Minister, the resulting revenue from the new tax will be spent on housing affordability projects. However, Knight Frank points out that some loopholes exist and details as to how it will be policed remain unclear. For example, the tax itself relies on buyers self reporting their nationality and providing a social insurance number, backed up by new auditing procedures and penalties. However, as yet it is unclear whether a resident with citizenship could buy a property by proxy for a family member living abroad. ‘There is no doubt that the new law will cool sales volumes and prices as foreign buyers absorb the additional cost implications. It is worth noting that the planned legislation also allows the BC cabinet to alter the foreign tax rate by between 10% and 20% at a later date and expand it to outside the Lower Mainland,’ the firm explains. ‘The legislature was originally recalled to discuss the merits of a tax on vacant homes, whilst the legislation provides an enabling power for such a measure, it is unclear at this stage whether the Government will go ahead with such a move,’ it adds. Vancouver isn’t the only city where policy makers are trying to stem the flow of speculative capital into their local housing market. Hong Kong, Singapore, Australia, Switzerland and Mexico have all taken steps either by imposing additional taxes or stamp duties, introducing a one off fee or restricting where or what type of property… Continue reading
