Property Briefing - A daily roundup of all the key property news
Posted by The Oracle Group on 11th June 2019 -
PLANNING
Housebuilding rules add to regional wealth divide
A report by the Centre for Cities has found strict regulations limiting house building in the UK’s most successful cities have exacerbated the wealth gap between north and south. Homeowners in the South East have made £80,000 more from their houses than those in the North, with housing wealth in Sunderland having increased by an average of just £3,000 per home since 2013 compared with £121,000 in Cambridge over the same period. The think-tank says restrictive planning laws are preventing developers from building houses in the areas where more homes are most needed, and that planning reform is needed to stop the "gifting" of wealth to homeowners in successful cities. Any development should be allowed unless a council blocks it, reversing the current situation where new housing is forbidden until a council allows it, the Centre proposes.
Most polluted street outside London to be demolished
An entire street, Woodside Terrace in Crumlin, near Caerphilly, South Wales, is to be demolished at a cost of £4m after the air there reached illegal levels of nitrogen dioxide due to heavy traffic nearby. Eluned Stenner, Caerphilly council's cabinet member for environment and public protection said: “The Welsh Government has confirmed it will make adequate funding available for the purchase and demolition of properties should this prove necessary.”
INDUSTRY
£10m property deals fall by a fifth
Property deals worth more than £10m fell by almost a fifth in London last year, according to a report from Knight Frank. There were 109 deals above £10m in 2018, down from 134 in 2017. However, transactions worth more than £20m hit their highest level since 2014. Rory Penn, of Knight Frank said: "Transaction volumes will increase when buyers have more clarity on the resolution of Brexit. Sentiment is then likely to improve quickly as we move on from 'peak uncertainty', particularly given how robust the economic fundamentals are."
High happiness levels, low house prices
The Daily Telegraph features a report on the best places to live in the country which balance ‘happiness’ with low house prices. Savills examined Office for National Statistics data, with research analyst Frances Clacy remarking: “This analysis highlights that, despite the rise of urban living in recent years, those living in more rural locations appear to be happier than those in cities”. Most of the 20 happiest locations have a high house price premium over the local area, but Staffordshire Moorlands, West Somerset and Mid Suffolk have house prices lower than their regional averages.
FIRMS
Helical is open to takeover offers
Property group Helical has confirmed it has received multiple unsolicited takeover approaches, one a £500m bid from an unnamed US private equity group. Peel Hunt analysts said the market “has been undervaluing Helical for some time now and this third party interest - while perhaps not at an acceptable level - reflects this”. The firm unveiled a 41% rise in pre-tax profits to £43.5m for the year to the end of March, with its London portfolio 84% let as of the end of March, a fall from the 92% occupancy of the previous year.
MJ Gleeson sacks chief executive
MJ Gleeson has sacked chief executive Jolyon Harrison following a dispute over pay. After the board said it was “not possible to find a mutually acceptable basis for Mr Harrison to continue”, he stepped down with immediate effect, with shares falling 11% to 788p. Former Keepmoat Homes chief executive James Thomson has been engaged as interim boss, while the firm searches for a chief executive.
Knight Frank commits to clean energy
Knight Frank has committed to purchasing only 100% renewable electricity for all the properties it manages. The property consultant has entered into a contract with Total Gas and Power to buy renewable power for its properties under management until 2021. Sarah Hodgson, partner in the Leeds office, said: "Buying our power from renewable sources is a very worthwhile commitment to responsible property asset management."
CONSTRUCTION
John Lewis to build extensions
John Lewis is planning to launch a full home design and improvement service following its acquisition of design and building company Opun. It will soon offer extensions costing up to £200,000, loft conversions, kitchens and bathrooms as part of the John Lewis Home Solutions service, which also helps customers to find trusted trades-people.Daily Mail, Page: 3
Kier wins majority of projects
Outsourcer Kier Group won contracts worth more than twice the combined value of those awarded to any other construction contractor in May. Kier received 12 projects last month worth £397m, the majority of which was the £253m contract to build a Northampton prison.
Structural flaws at £335m hospital
Parts of a new hospital must be rebuilt at a cost of £100m because of "complex" structural flaws left by Carillion. Building work at the already delayed new Royal Liverpool Hospital was halted in February last year after Carillion's collapse. The review by structural engineers from Arup found three of 11 floors require strengthening. The hospital was originally due to open in March 2017, but has been repeatedly delayed after asbestos was found on site and remedial building work was needed.
COMMERCIAL
Sharp fall in Scottish commercial property sales
Commercial property sales fell by 21% in Scotland in the first quarter of this year, according to the Scottish Property Federation. Overall sales in Scotland in the first quarter totalled £763m, a year-on-year fall of £203m. SPF said the drop was largely driven by fewer high-value transactions, with "low growth and lack of certainty in the economy" weighing down on activity. Edinburgh, accounting for 35% of the Scottish market, bucked the national trend, recording higher values over the period. SPF also noted a rise in investor appetite for alternative property asset classes.
LEGAL
Britain ‘under-using unexplained wealth legislation’
Security think tank the Royal United Services Institute (Rusi) has cautioned that legislation allowing assets bought with ‘dirty money’ to be confiscated without a conviction could be effective in recovering illicit wealth from organised crime figures, and that the strategy is being underused. This comes as the National Crime Agency (NCA) attempts to seize a £11.5m Knightsbridge home and a golf club of similar value from Azerbaijani banker’s wife Zamira Hajiyeva, using the country’s first “unexplained wealth order”.
ECONOMY
UK economy shrank in April
The UK economy contracted by 0.4% between March and April, according to the latest data from the ONS, which indicates that British GDP grew by just 0.3% in the three months to April compared to 0.5% from January to March. UK car manufacturing fell by 24% in April, as firms planned shutdowns around the original Brexit departure date of March 29 and manufacturers' stockpiling boost unravelled.
Bank sees danger in delaying rate rise
Michael Saunders, an external member of the Bank of England’s monetary policy committee, has suggested that interest rates may have to rise before Brexit uncertainty clears. In a speech at Solent University in Southampton, Mr Saunders said that the economy was at capacity and inflation a risk as he signalled that rates will need to rise.
OTHER
Possible suspects identified in police Grenfell probe
Potential suspects have been identified by the Metropolitan Police in its investigation into the Grenfell Tower blaze. The individuals could face prosecution over corporate manslaughter and gross negligence manslaughter, but officers said there were no guarantees that criminal charges would be brought over the disaster. Due to delays in the concurrent public inquiry, survivors and bereaved families will have to wait until at least 2021 for police to formally ask prosecutors for charging decisions.
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