Ending Help to Buy ‘will slow down housing market’- Plus all the latest property news
Posted by The Oracle Group on 23rd July 2019 -
INDUSTRY
Ending Help to Buy ‘will slow down housing market’
The next prime minister has been urged to extend the government’s Help to Buy scheme, following fears that its end will cause a slowdown in the housing market in parts of the country. The scheme has accounted for more than 80% of home sales in the past 18 months in 22 local authorities, according to Cushman & Wakefield, with Oxford the most dependent, followed by Gravesham, Warrington and Waltham Forest. “A follow-on scheme from 2023 is essential to maintain the buyer demand levels required to bring forward the 300,000 or so new homes the country needs every year,” the property advisory firm said. It also criticised plans to restrict Help to Buy to first-time buyers and introduce regional price caps from April 2021, saying this could hamper the market in areas where large numbers of its users are not first-time buyers and where the average prices of new homes are above the regional cap.
Labour slams lack of leasehold action
Labour has accused the Government of having been "too slow and too weak" in its approach to helping home buyers "ripped off in the leasehold system". Shadow housing secretary John Healey claimed the Tories were unable to help leaseholders because "they won't stand up to the vested interests in the property market". But housing secretary James Brokenshire defended his record, adding that he has improved protections for leaseholders as the Government no longer backs housing projects which sell to home buyers on a leasehold basis.
Lendy agreed £1.8m dividends
Investors who lost money in Lendy, which crowdsourced loans to property developers, say the peer-to-peer lender agreed dividends worth £1.8m before its collapse but did not complete a customer compensation scheme mandated by the City regulator. The Financial Conduct Authority ordered Lendy to arrange a "remediation" exercise after it concluded that certain loans were mis-sold, but only £1.3m had been paid out when the company failed in May this year. The FT reports that property development schemes spearheaded by Stewart Day, the former chairman of Bury Football Club, account for almost a fifth of the money owed to investors.
HOUSING
UK housing ‘a scandal’
According to TV presenter George Clarke, the housing system in the UK is a "scandal". The architect said there is a crisis of affordability and criticised the political approach to building new homes. Interviewed in the I, Clarke slammed politicians who are not providing for "those most in need", adding: "The system is absolutely screwed." "For every council house that we sold off, we should have built another one, we should have replaced it. It's a scandal,” he said. He tackles issues of housing in George Clarke's Council House Scandal, which starts on Channel 4 on July 31, in which he explores the latest in aspirational design and building methods while helping to create part of a mini-estate of 30 new homes in Manchester.
COMMERCIAL
WeWork nets £56m by moving into EMA HQ
WeWork is to net a €62m (£55.7m) windfall when it takes over the European Medicines Agency’s former London headquarters, following the body’s relocation to Amsterdam. The office sharing giant secured the cash in “financial inducements” from British and European taxpayers as part of a deal in which it will sublet the agency's former headquarters in Canary Wharf, EU documents reveal.
BT to move to Aldgate to cut costs
BT has agreed to sell its longstanding base in St Paul’s as it seeks to cut costs, and is believed to be relocating its global headquarters to Aldgate. The move is expected to take place by the end of 2021. The current 10-storey BT Centre is to be sold to private equity group Orion Capital Managers for £210m, with BT to lease its current home for 30 months until it relocates.
Landsec optimistic on new Piccadilly Circus development
Landsec is seeking tenants to occupy a major office development behind London’s iconic Piccadilly Circus lights, with over 110,000 sq ft of offices, as well as shops and a rooftop restaurant to be developed at the Lucent site. Construction is due to complete in 2022, representing one of three major projects the firm is beginning this year after a three-year pause on speculative London office developments due to uncertainty over Brexit.
MORTGAGES
Metro Bank confirms mortgage sale
Metro Bank has confirmed reports that it is preparing to sell a £500m portfolio of mortgages to help to restore investor confidence and boost its capital position. The bank is expected to sell the portfolio, thought to be mainly made up of loans to landlords, to Cerberus Capital Management, which has bought loan books from Northern Rock and Lloyds Bank and been accused of using aggressive tactics to recover the money.
Bids received for Tesco Bank’s mortgage book
The Times reports that Lloyds Banking Group and RBS are among several banks that have tabled second-round bids for Tesco Bank’s £3.7bn book of mortgages.
RETAIL
Sports Direct to fund to Debenhams legal challenge
London’s High Court has ruled that retail landlord Combined Property Control Group can expedite a challenge to Debenhams’ restructuring proposals, which could result in them being unwound, and would almost certainly push the retailer into administration. The court decision was made after Combined Property Control Group, which owns six properties let to Debenhams, challenged the retailer’s company voluntary arrangement. The action has been funded by Mike Ashley’s Sports Direct, who also abandoned its own legal action against Debenhams.
Bathstore bought out of administration by Homebase
Bathstore has been bought out of administration by Homebase, confirming plans it will take control of 44 Bathstore shops, safeguarding around 150 jobs on the shop floor and another 25 at head office. However, a further 91 remaining stores employing 200 staff are at risk of closure.
Cambridge tops retail index
Writing in the Telegraph, Rosa Silverman discusses how Cambridge tops a "vitality index" compiled by retail property advisers Harper Dennis Hobbs, scoring centres on their retail health, which is based on the proportion of upmarket shops and value-led shops, vacancy rates and the proportion of "low-quality" retailers such as pawnbrokers, money lenders and bookmakers.
CONSTRUCTION
Best price does not equal best value
Ron Fraser, executive director of Construction Scotland, believes that public procurement reform in the country “falls short of the fundamental changes that we believe are needed to improve the way we do business with each other in this country”. In particular, he argues, the perception that accepting the lowest price in a construction procurement competition represents best value for the economy must be tackled. Reasonable levels of profit are essential to enable contractors and their supply chains to build resilience, while reasonable returns are needed to allow investment in training, research and to improve productivity.
PLANNING
Dubai sheikh reduces proposed Scottish lodge size
The ruler of Dubai has submitted new plans to build a lodge for family members at his Scottish estate. Sheikh Mohammed bin Rashid al-Maktoum dropped a scheme to expand accommodation at Inverinate estate in the Highlands earlier this month following complaints from locals. The sheikh has now returned with a new proposal, reducing the size of the proposed building and said it will have six bedrooms rather than nine. The local authority will make a decision on the sheikh's application in September.
HOTELS
Travelodge plans 26 new seaside hotels
Travelodge is planning to open 26 hotels in seaside resorts under a multimillion pound investment plan that it predicts will lead to 650 new jobs. The new locations will include Lerwick on the Shetland Islands, Pwllheli in North Wales and others in Cornwall, Jersey and Guernsey. Tony O'Brien, the development director at Travelodge UK, said: “There are significant regeneration and modernisation projects taking place in seaside towns and cities across the UK, and we have identified 26 coastal areas that could benefit from a Travelodge hotel.”
ECONOMY
Britain could already be in recession, economists warn
The National Institute of Economic and Social Research (NIESR) has warned that Britain may already be tipping into recession due to the effects of Brexit. It believes there is around a 25% chance that the economy will have shrunk from April to June and will continue to do so in the following quarter, while putting the likelihood of a no-deal exit from the EU at 40%. NIESR forecasts GDP fell by 0.1% in Q2, with a 25% chance that GDP declines again between July and September. However, the think-tank’s central forecast is for growth of 0.2% in Q3.
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