Developers ‘holding back’ on building thousands of homes - Plus all the latest property news
Posted by The Oracle Group on 9th August 2019 -
PLANNING
Developers ‘holding back’ on building thousands of homes
Even though planning approval was awarded for 382,997 homes in England last year after pressure on councils to allow more housing, developers completed only 195,294 new homes, leading to accusations that they are holding back to wait for land values to increase. Analysis by the charity Shelter shows that while housebuilding has increased, it is at only half the rate of the rise in planning permission approvals, with the gap between the two having widened in each of the past three years. The Home Builders Federation said that local authorities are taking too long to reach decisions on development sites. Shelter wants housing associations and local authorities to be given more support to build hundreds of thousands of homes for social housing.
Flats developer wins appeal
A company building 53 flats above empty shops in Wrexham has won an appeal against a decision to cancel approval. Councillors backed the Henblas Square scheme last year on condition the Mandale Group paid £300,000 towards the cost of affordable housing elsewhere. Permission was then withdrawn in April when the developers requested the sum was reduced to just under £29,000. Planning inspector Kay Sheffield found the decision unreasonable, and the cut justified to make the flats viable.
FIRMS
Political turmoil hits Savills profits
Savills’ half year results have been hit by ongoing political and economic turmoil. The average value of London residential property sold by the estate agency in the first six months of this year fell by 32% to £2.1m. Across its UK residential arm, Savills' underlying pre-tax profit fell by 44% year-on year to £3.5m. Investment activity in commercial property across the UK fell 31% over the period. Underlying profits in the group's Asia-Pacific commercial and residential arms also fell by 26% and 48% respectively. Across all its operations, Savills reported a 9% drop in first half underlying pre-tax profit to £38.4m. Chief executive Mark Ridley said domestic and international challenges had “considerably reduced the volume of real estate trading activity” over the last few months.
Bellway forecasts rising profits
Bellway increased the number of new homes it developed over the past year and expects revenues to rise as a result. The housing company told investors it expects profit for the year to July to be in line with market forecasts following the "successful delivery" of its growth strategy. Revenue for the year is forecast to have grown by 8% to almost £ 3.2bn on the back of a 5.7% increase in house completions, to 10,892, the housebuilder said.
Derwent commits to new London scheme despite Brexit concerns
Property developer Derwent has brushed aside Brexit concerns to progress with two new London schemes - Soho Place above Tottenham Court Road station and the Featherstone Building in Shoreditch - and also exchanged contracts to sell The Buckley Building in Clerkenwell for £103m. New lettings in the first half totalled £18.1m, 7.5% above December 2018 estimated rental value, while net rental income was up 7.1% to £876.3m.
Short sellers target bonds to profit from UK retail crisis
The FT examines how investment banks and hedge funds have taken short positions against both the equity and bonds ofIntu Properties, as it battles with falling rents and debt.
Fife Housing Group secures £65m funding
Independent housing association Fife Housing Group has secured a £65m funding package from Royal Bank of Scotland. It will use the backing to refinance current debt, increase investment in its housing stock and continue to build more than 90 new homes in Fife over the next two years.
MORTGAGES
Half of equity release used to repay debt
Half of homeowners releasing cash tied up in their property do so to repay debt. Analysis from equity release firm Key shows a third of people took out a plan to repay unsecured debt at an average £11,830, while one in five owed an average £87,000 on their mortgage. Ros Altmann, former pensions minister, said: “Debt among the over-55s is a huge worry. Excessive borrowing caused the financial crisis and yet it continues.”
Scots losing thousands on expensive mortgage rates
A new survey of Scottish households has found that four-in-10 homes could save £2,300 a year if they switched their home loan to the current average fixed rate, which sits at 1.62%. While record numbers of Scots are remortgaging to fixed-rate deals, a poll carried out on behalf of independent mortgage adviser Aberdein Considine shows that 43% of people are staying with higher rates of 4% and above – costing them at least £191.71 every month.
Co-op Bank hit by mortgage competition
Co-op Bank made a statutory loss before tax of £38.5m for the six months to June 30, compared to a £39.5m loss in the same period last year, citing "sustained pressure on mortgage margins" and a "challenging external environment". However chief executive Andrew Bester said the bank's conservative mortgage book, which has only a 57% loan to value, is “well-placed to handle further competitive pressure and economic risks”.
LEGAL
Home repossessions reach five-year high
Ministry of Justice figures show there were 6,179 claims in county courts for home repossession in the three months to June – the highest level since 2014. It was a 39% increase compared with the same quarter a year ago. Officials said the recent increase in repossession actions has been driven by a large unnamed home loan provider. The research also shows that mortgage orders, warrants and repossessions by county court bailiffs have also risen by 40%, 34% and 30% respectively.
Record £15bn divorce case heading to High Court
A Russian oligarch's ex-wife is set to bring Britain's biggest divorce case to the High Court over her former husband's alleged £15bn fortune. Natalia Potanina, who has lived in London for several years, lost a legal battle against Vladimir Potanin in Moscow, so will now pursue her case in the British divorce courts. Mrs Potanina is said to have instructed Charles Howard QC to lead her case, and sources suggested that she will demand £5.8bn in a division of property and investments.
HOUSING
Borders housing association in ‘green homes’ study
A housing association in the Borders is to help carry out a study into the construction costs of more environmentally-friendly properties. Up to 50 new "green homes" will be built at four different locations across the region. Eildon Housing, in conjunction with Construction Scotland Innovation Centre, said it would compare costs, construction time, living quality and whether they are financially viable to build. The results of the study will be used to develop future building plans.
INDUSTRIAL
Scottish warehouse market booming
Demand for warehouse properties in Scotland is on the rise, registering the strongest performance in three years. Take-up in the first half of the year topped 360,966 sq ft, a 180% increase on the full-year figure for 2018, according to Savills. Second-hand units accounted for 67% of all space transacted and some 90% of the available units on the market are within the 100,000-200,000 sq ft size category.
ECONOMY
Economy vulnerable to housing crash
Economists at IHS Markit have warned that the world economy is vulnerable to a major housing crash, suggesting that risks stemming from prices which have soared since the financial crisis could have a greater impact than Brexit or the US-China trade war. It says that an outright collapse in property prices in key economies could see global GDP growth fall from current forecast rates of about 2.5% a year to a low of just 0.9% next year, although it would not deliver a full-blown global recession.
Green spaces benefit house prices
Parks and lakes in towns provide health and environmental benefits worth more than £70bn a year, according to official figures. Urban green spaces - which cover 4.5m acres in Britain - help remove air pollution, fight climate change and prevent depression, said the Office for National Statistics. Location near these urban oases also adds £67.8bn to house prices, or £2,500 per property. The ONS estimated the value of recreation spent in nature in towns and cities as £2.5bn in 2017.
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