Property Briefing

Posted by The Oracle Group on 6th June 2019 -

INDUSTRY

Labour proposes seeking to end to the ‘buy-to-let frenzy’

Labour is proposing housing and land reforms with tighter controls on mortgage lending and greater intervention from the Bank of England. The party is also calling for an overhaul of laws and taxation to create greater transparency and land price stability, according to the Land for the Many report. One of the key themes introduced is to end the “buy-to-let frenzy”, with a range of measures proposed including tighter restrictions all mortgage lending but particularly the buy-to-let market. “Major reforms of the private rented sector” would mean landlords face a series of significant changes including inflation-linked rent rise caps, open-ended tenancies, and tougher eviction clauses. Meanwhile, Labour MP Preet Kaur Gill has proposed a law in the Commons which would force landlords to provide "transparent accounts" of where management charges are spent.Your Mortgage  The Scotsman, Page: 38  Yorkshire Post, Page: 4.

Majority of renters will never own a home

Almost 75% of renters want to own a home, but a new YouGov survey has revealed that the majority of these do not believe they will realise the dream. Paula Higgins, chief executive of the HomeOwners Alliance, one of the firms which commissioned the research, said: “We have a crisis on our hands. A majority living in rented accommodation desperately want to buy a home of their own – yet most think it’s a pipe dream.” The study also revealed that around a third of those renting are critical of the government’s Help to Buy scheme, with many pointing out that it has caused property prices to rise, particularly in the new build sector, so benefitting property developers rather than prospective first-time buyers. Those surveyed also said that while this scheme was a good idea, in theory, it had failed to deliver in practice, due to continued supply issues in the housing market. What Mortgage  Mortgage Strategy.

RETAIL

Arcadia postpones CVA vote

Philip Green’s Arcadia Group has postponed a meeting of suppliers, landlords and other creditors voting on seven company voluntary arrangements until 12 June, amid reports that landlords at Aviva, M&G and Intu voted against the restructuring plans. The Telegraph reports that landlords felt aggrieved that Arcadia's pension fund was receiving an extra £25m in cash but landlords were only being offered security over Arcadia's existing assets and a stake in an unlisted business that was difficult to value. Land Securities is understood to have demanded fresh cash be pumped into the business, while Intu felt it would not be able to demand other tenants keep paying full rents if a profitable chain was allowed to use a CVA to slash its bills. Creditors were asked to vote on seven separate proposals, each requiring a 75% majority to pass, although is understood the CVAs that did secure enough backing - such as the one which had the Pension Protection Fund as a major creditor - will not require another vote. Arcadia's plan includes closing 23 stores and cutting rents on another 194 and the company claims it risks going into administration if the restructuring does not go through because a slump in sales and profits meant it could not afford its annual £170m rent bill. Ian Grabiner, CEO of Arcadia, said: “It is in the interests of all stakeholders that we adjourn today's meetings to continue our discussions with landlords. We believe that with this adjournment, there is a reasonable prospect of reaching an agreement that the majority of landlords will support.”Daily Mail   Financial Times   The Daily Telegraph, Page: 1   BBC News  The Guardian, Page: 29  I, Page: 40  The Times, Page: 33.

COMMERCIAL

BT to close wealth of offices

BT has begun work to close 90% of its estate of 300 UK sites as part of a wider radical restructuring, whereby around 13,000 of 100,000 workers are set to be made redundant in a plan to save £1.5bn over three years. Talks with Great Portland Estates on a £200m sale-and-leaseback deal of BT’s headquarters, overlooking St Paul’s Cathedral, are said to be in advanced stages.The Daily Telegraph.

Birmingham’s Lewis Building sold for £140m

One of Birmingham's major office blocks has been sold for £140m. The Lewis Building and its neighbour Priory Court, in Bull Street, have been bought from the property arm of Legal & General by Gulf Islamic Investments which has offices in Dubai and Abu Dhabi.The Birmingham Post, Page: 62

FIRMS

Foxtons backs second Brexit referendum

Foxtons has become the latest estate agent to join a London business organisation that supports a second referendum on Brexit and has consistently opposed a “no deal” stance in recent months. London First has welcomed the firm saying it is “in good company at this crucial time for our capital”. Foxtons joins several other estate agencies within the 200-strong member organisation including Savills, Gerald Eve, JLL and Strutt & Parker’s parent company BNP Paribas.The Negotiator

Reuben brothers make £65m London swoop

The billionaire Reuben brothers have bought the Japan Centre building, just off Piccadilly Circus, from DTZ Investors. David and Simon Reuben paid around £65m for Clareville House in Panton Street, after paying almost £90m for 60,620 square feet 100 Pall Mall in April.Evening Standard

Profits fall at Workspace Group

Flexible office space provider Workspace Group posted a fall in profits after selling fewer of its investment properties in the past year, the Telegraph has reported. Pre-tax profits were down 19% to £137.3m in the year to March compared to the previous year. However, net rental income was up 16% to £111m. The firm blamed the fall in profits on lower rises in property valuations and sold off less of its estate compared to last year.The Daily Telegraph, Page: 2

INFRASTRUCTURE

Grayling announces HS2 review

Transport Secretary Chris Grayling has announced that the chairman of HS2, Allan Cook, is reviewing the project to “make sure the costs and budget are right and that it is deliverable.” The announcement comes as some of the Conservatives vying to replace Theresa May as leader have pledged to scrap the scheme. Mr Cook was appointed as chairman in December following the resignation of Sir Terry Morgan after the announcement of a delay to Crossrail, which is now expected to open in late 2020 or early 2021.City AM

HOUSING

Fifth of households struggling with payments

A fifth of UK households are struggling to pay their rent or mortgage, according to the Affordable Housing Commission. The figure of 4.8m homes is up by more than 500,000 since 2010, says the report for the commission. The largest rise has been in the private rented sector where more than four in ten are falling behind with payments.The Sun, Page: 26

‘Very little’ done on tenement safety since 2000

MSP Graham Simpson has warned that “very little” has been done to improve the maintenance of tenement buildings since the death of a woman killed by falling masonry in Edinburgh in 2000. Mr Simpson cited Christine Foster’s death as he published a “challenging” set of proposals drawn up by a Holyrood committee, including mandatory five-yearly inspection reports on all tenements. He said there were 20 incidents of falling masonry every month in Edinburgh alone, according to City of Edinburgh Council figures.BBC News

ECONOMY

UK economy ‘close to stagnation’

The UK service sector hit a three-month high in May, 51.0 from 50.4 in April, according to IHS Markit and the Chartered Institute of Procurement & Supply (Cips), who cautioned that Brexit and the global slowdown are dragging on growth. Chris Williamson, chief business economist at IHS Markit, said: “The PMI surveys collectively indicated that the UK economy remained close to stagnation midway through the second quarter.” Chris Sood-Nicholls, managing director and head of global services at Lloyds Bank Commercial Banking, said: “While a small expansion in the sector is positive, we must be realistic – many services firms remain understandably cautious in the current environment.”City AM   The Daily Telegraph   The Guardian, Page: 31

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