Tag Archives: credit
UK commercial property sales reach highest level since the economic downturn
The number of UK commercial property transactions has reached its highest level since the credit crunch, with 115,400 sales in the last year, a 6% jump, according to the latest figures to be made available. Data from HMRC shows that the number of transactions is up 24% from a low of 92,900 in 2008/2009, but still significantly below 2007/2008 when there were 139,000 sales. An analysis of the figures by commercial law firm EMW, suggests that England is dominating the country’s market. There were 97,500 commercial property transactions in England last year, accounting for 85% of the UK total, this figure is also the highest since 2007/2008 when there were 115,700, 83% of the UK total. The report explains that the relatively high yields on property when compared to other investments, continues to attract both UK and, increasingly, overseas investors. ‘Commercial property assets are proving increasingly attractive to investors looking for higher yields in an environment with record low interest rates and this is driving activity towards pre-credit crunch levels,’ said Nick Marshall, principal at EMW. ‘There has also been a surge of interest from overseas investors, with the UK offering investor friendly lease terms. The relative shortage of vacant prime office space in central London is also making the market more attractive to investors,’ he explained. ‘Bank lending has also picked up which has led to more activity in the market and lenders are now happier to fund purchases at higher loan to value ratios. Without higher LTVs, many property investors were finding it hard to get the economics of their investments to work,’ he added. Meanwhile, according to the latest Commercial Market in Minutes report from Savills, downward pressure on prime yields is set to resume across six sectors of the market while income and rental growth will begin to drive the total return. Savills expects downward movements in prime yields to return across M25 offices, provincial offices, high street retail, shopping centres, industrial distribution and industrial multi-let, largely driven by a lack of new stock coming to the market. Also, West End and City office prime yields are at an all-time low at 3% and 4.25% respectively, compared to 3.25% and 4.25% in May of last year. However, unlike the early phase of the UK’s economic recovery which saw investors rely on an uptick in capital value to produce total returns, Savills says the market will have to focus more on income return and rental growth. The firm suggests this shift is a clear indicator that the market has moved on as the rate of capital value growth begins to slow from its peak of 12.95% in October 2014 compared to a current level of 11.04% for the year to the end of May 2015. ‘Rental growth is no longer just a London story and while office and retail in the Capital remain at the top, an outward ripple of recovery suggests strong… Continue reading
London mayor opens up new homes planning guidance for consultation
The Mayor of London Boris Johnson has released updated planning guidance that aims to maximise the construction of quality homes in the city. Johnson regards this as a vital step in achieving the goal of building 49,000 houses a year in order to keep up with London's booming population but he wants quality to be as important as quantity. Interested parties are being invited to comment on the new guidance, which includes detail on building specifically for long term private rentals, the potential introduction of affordable housing targets in new areas, and more details on vacant building credits for developers. London's Deputy Mayor for Planning, Sir Edward Lister, said that the new Supplementary Planning Guidance will be vital in helping developers and boroughs understand how to achieve the Mayor's ambitious aims for housing in London. ‘Delivering the homes that London needs requires us to work together, so I would encourage anyone with an interest to let us know what they think,’ he added. The latest revision of the Mayor's Supplementary Planning Guidance for Housing builds on the Mayor's Plan to provide extra detail where needed, and is open for consultation until 07 August. It recognises that in the drive to increase housing capacity in London, quality is just as important as quantity and seeks to make sure that people have decent homes and enough space to live. The plan includes detail on the Mayor's policy to encourage an increase in developments designed specifically for long term private rentals, so-called build-to-rent. He says that done correctly, this could help meet specific population needs in certain urban centres. There is also more detail on the concept of applying fixed affordable housing targets in Housing Zones and Opportunity Areas, which will be the source of significant growth in housing supply in coming years. Advice for local boroughs is included on how to incorporate the Vacant Building Credit into their local planning policy to ensure the credit delivers the aim of the Government policy, which is to bring forward brownfield sites that otherwise wouldn't come forward for development. The credit allows the existing gross floor space to be credited towards affordable housing contributions. Continue reading
Labour Party plans for UK housing market after general election criticised
Announcements from the UK’s Labour party on policies it would introduce if it wins the general election on rent controls and stamp duty for first time buyers have been met with considerable criticism from the property industry. Under the party's plans to tackle the country’s lack of new housing, Labour leader Ed Miliband said he would introduce a ‘first call’ policy that would give first time buyers who have lived in an area for more than three years priority on up to half of new homes. He also announced that he would scrap stamp duty for first time buyers on homes worth up to £300,000 and said foreign buyers would be subject to higher taxes and a ‘local first’ policy would ensure properties are advertised in the UK before they are promoted overseas. Miliband claimed that cutting stamp duty to zero would benefit nine out of 10 people buying their first home and could save up to £5,000. It would fund the stamp duty plans by tackling tax avoidance by landlords, pointing to HMRC figures that estimate it costs £550 million a year. Labour would want the creation of a national register of landlords, saying this would could tax avoidance by landlords by 20% and bring in £100 million for Treasury coffers. Tax relief for landlords to cover the upkeep of furnished properties would also be reduced for rogue landlords that rent out sub-standard properties. Also, under the plan private landlords would be banned from introducing above inflation rent rises over a three year period and landlords and letting agents would be required to disclose the rent paid by previous tenants, to allow renters to negotiate the best possible deal at the start of a contract. Mr Miliband said Labour's plan would help create ‘a stable, decent, prosperous private rental market where landlords and tenants can succeed together’. Jeremy Blackburn, head of policy at the Royal Institute of Chartered Surveyors (RICS) said that while the proposed stamp duty reform could help some first time buyers in the market, it’s another measure that tinkers with demand side stimulus. ‘Prices are already predicted to rise in the next parliament and this is only likely to make matters worse. The promise of one million homes by 2020 is an ambitious target, but Labour has not fully explained how they expect to remove obstacles to such a supply- ide revolution. What we need is a drastic increase in supply,’ he added. Building affordable homes is a better way of solving the housing crisis than reducing stamp duty, according to housing charity Shelter. ‘While reducing stamp duty may help at the margins, the only way to give generation rent a fighting chance of their own home is to tackle the root causes of our housing crisis by building the affordable homes we desperately need,’ said chief executive Campbell Robb. Mark Hayward, managing director, National Association of Estate Agents (NAEA), welcomed the policy on stamp duty for first time buyers, saying… Continue reading
