The number of towers being planned or built in London has passed the 500 mark for the first time as the skyscraper trend spills into the suburbs.
Last year’s tower tally of 510 is a rise of more than 12 per cent on the 455 recorded in 2016, according to New London Architecture’s annual count of buildings of at least 20 storeys (their definition of a skyscraper).
The think tank’s survey, released today, also found that a record 115 towers are under construction in the capital, up 26 per cent from 91 in 2016.
The figures will renew concerns that the skyline is under threat from towers being waved through by councils and the Mayor. However, there are also signs that Brexit uncertainty, rising construction costs and falling demand for expensive central London flats could slow the rate at which skyscrapers go up, although perhaps only temporarily.
The survey, using figures from property data specialists EG and consultancy GL Hearn, found that only 18 towers were actually finished last year, down sharply on 2016.
The pace of completions is expected to rise again to record levels this year. Those completed last year include Vauxhall Sky Gardens, the two riverside Corniche towers in Lambeth, Manhattan Plaza in Poplar, Lombard Wharf in Battersea and the Lighterman in Greenwich Peninsula.
Although more than two thirds of the towers in the pipeline are in inner London, the survey shows tall buildings are becoming a feature of the suburbs.
Towers are being planned in Walham Forest and Bromley for the first time, leaving just seven boroughs — Bexley, Enfield, Havering, Hillingdon, Kensington & Chelsea, Merton and Richmond — as the last areas in London where no new skyscrapers are planned.
The report says this could change as development areas such as Bexley Riverside, Meridian Water (Enfield) and Morden (Merton) all have potential for tall buildings in the future.
The Elizabeth line, due to fully open from December next year, could also act as a catalyst for tall building development in outer boroughs such as Ealing, Redbridge and Newham.
Peter Murray, chairman and co-founder of NLA, said: “There has definitely been a shift from luxury to more middle-cost housing. Towers are not the only way of delivering the density of housing that London needs, but in certain areas such as Transport for London sites near stations there are virtually no alternatives.”
More than 90 per cent of the tall buildings are residential and could deliver 106,000 new homes, according to the survey. About half of all the towers are in east London with 85 in Tower Hamlets and 70 in Greenwich.
Mr Murray said there were few signs that the Grenfell Tower disaster was deterring developers from planning tall buildings. He said: “You would expect most of the buildings going up now not to face the same problems as Grenfell did, they will all have sprinkler systems, for example.”
The Government will crack down on gazumping with new measures to professionalise the estate agency industry and make the process of buying property easier for consumers.
It announced a raft of changes to overhaul the largely unregulated sector, which has long suffered from being seen as anti-consumer.
They include encouraging the use of voluntary reservation agreements, in order to stop sales from falling through, ending the practice of gazumping, where sellers accept higher offers following an agreement to sell.
The Government also plans to get rid of ‘rogue agents’ by ensuring that all estate agents have a professional qualification. It will also make it a requirement for these companies to be transparent about whether they receive fees for referring clients to mortgage brokers, surveyors or solicitors.
Housing Secretary Sajid Javid said: “Buying a home is one of the biggest and most important purchases someone will make in their life. But for far too long buyers and sellers have been trapped in a stressful system full of delays and uncertainty. So we’re going to put the consumers back in the driving seat.”
Research carried out by the Government found that more than 6 in 10 people who bought or sold property have experienced stress due to delays in the property transaction process.
The measures come from a consultation held last year. More extreme proposals, such as creating financial penalties for buyers who pull out of purchases and cause chains to collapse, are not included in the new plans.
Agents must be members of redress schemes such as The Property Ombudsman. However, organisations like this lack power, and there are currently no requirements for estate agents to have a formal training or certification, unlike in the United States. It is unclear what kind of qualification the Government will mandate, and it will hold another consultation to work out how estate agents can be brought up to standard like conveyancers, solicitors and surveyors.
Russell Quirk, chief executive of online estate agency Emoov, said: “This is really great news. The industry and Government have talked to a long time to clean up house buying. If you add both speed and certainty to the process, there will be fewer transactions falling through, less wasted money, and less stress for the consumer.”
He added: “For far too long it has got away with being almost entirely unregulated. How can it be that financial advisers dealing with the loan for the property are vetted, but the people dealing with the asset itself and the trauma of a protracted process are not overseen or licensed?”
This is not the first measure to hit the industry in an effort to clean it up: last year a ban on letting fees was announced by the Chancellor which is due to start next year. In the past the Government also introduced Home Information Packs which are widely regarded as a failure.
Becky Fatemi, managing director of London estate agency Rokstone, said: “Rogue agents are small in number, but sadly the unprofessional behaviour of “wide boys" gives the industry a bad reputation."
As part of the Government's battle to protect leaseholders, it also announced it would require managing agents and freeholders to provide lease information and a fee timetable in order to stop them wielding power over leasees. It is also planning to increase efficiency in home buying with plans to introduce digital improvements such as electronic conveyancing.
Article: https://www.telegraph.co.uk / Image: swindonlink.com
The number of buy to let investors in the UK has hit a record high of 2.5m in the latest tax year - that’s five per cent up on the previous 12 months according to London agent Ludlow Thompson.
The number of landlords has increased 27 per cent in the past five years, up from 1.97m in 2011-12, and landlords now own an average of 1.8 buy to let properties each – rising for the fifth consecutive year.
The agency says that the fundamental aspects that make the UK and London market attractive to investors remain strong, including demand continuing to outstrip supply with government statistics predicting that the population of London alone will increase to approximately 10m by 2035.
“The long-term picture for the buy to let market remains strong. As a ‘London-leaning’ Brexit looks more likely, a final deal will focus on strengthening the appeal of the capital as a go-to destination for overseas professionals, graduates and students alike” anticipates Stephen Ludlow, the agency’s chairman.
He says recent Bank of England data also shows the resilience of the sector, despite the introduction of the three per cent stamp duty surcharge on additional homes, plus new mortgage stress tests and the tapering of mortgage interest relief.
Some 12.7 per cent of all mortgages in Q4 2017 went to buy to let investors, only a slight dip from 14.4 per cent in Q4 2016 and 16.3 per cent in 2015.
Ludlow continues: “Even taking into account the implementation of changes to buy to let tax relief, there are a number of tax reliefs available to landlords. Investors should also note that, historically, growing earning power and rising wages have tended to lead to rising rental values.”
Previous research from ludlowthompson shows that even when the new buy to let tax changes are fully implemented, investors are still set to benefit from £16.7 billion in tax relief.
Source: City AM / Ludlow Thompson
Exercise is basically the new clubbing. At least, that’s what Casey Phillips, a property agent at Shelley Sandzer, tells me as we’re discussing why the fitness industry is currently booming.
“Instead of getting drunk, you do a class together,” he says. “You just feel incredible afterwards.”
The wellness and fitness industry is estimated to reach a value of £22.8bn by 2020, according to Statista. Walk just a few steps outside your office and you can see the physical evidence of this on the streets of London: gyms are popping up everywhere.
This could be good news for landlords, who are facing the disappearance of several tenants as retailers and restaurants cut down their portfolios. A raft of company voluntary arrangements (CVAs) in recent months has left many property owners without occupants or receiving dramatically slashed rents.
But for health clubs and gyms, expansion is the name of the game.
“The sector is so active, it’s almost a landgrab for space,” says Phillips “It’s like a gold rush. Everyone’s just looking at anything they can.”
Part of this boom is down to a rise in the number of smaller chains and boutique gyms.
Phillips cites Xtend Barre and Triyoga as examples of fresh brands he has found homes for recently.
In fact, his work on clubs and gyms now dwarfs the amount of time he spends sourcing sites for shops and restaurants.
The rise of the boutique gym has been so fast because its requirements are different. Whereas more traditional brands need huge floor plates to accommodate as many machines as possible, new concepts are able to adapt to smaller or unusual spaces.
One operator which fits the bill is F45, a concept imported to our shores from Australia, which is rapidly expanding its presence through a franchising model. Less than four years old, the business already has more than 1,000 studios worldwide, including several in London.
In his time at the head of the company, founder Rob Deutsch has seen more and more landlords pay attention to gyms as important anchor tenants.
“Big shopping centre operators are now coming to us,” says Deutsch. “That didn’t happen before.”
The concept of F45 is simple. Instead of paying for a pricey personal trainer, customers attend a group training session and complete 45 minutes of intense workouts.
It can expand particularly quickly because it sells studios to franchisees, with a full set-up cost of around £200,000.
This can be made back in a matter of months, says Deutsch, due to the popularity of the sessions: “The economics of the model is very tight.”
The other reason it can slot into former retail spaces is the strict approach to equipment, which Deutsch says has to be practical and multifunctional to earn its place on the gym floor. “Our philosophy is if the equipment can’t be moved to the other side of the room, we don’t have it.”
That’s why the concept has been easy to install in some unlikely places, which in London include the basement of an Itsu restaurant that would otherwise have gone to waste.
Deutsch even hints that F45 is in talks about taking over some sites from a failing retailer in the US.
While he is tight-lipped on the possible deal, it is just one example of where gyms are picking up the slack left by struggling businesses.
The collapse of any chain is bad news for business, but it opens up a big opportunity for the leisure sector. The Gym Group told City A.M. earlier this year that it has been eyeing up some of the former Toys R Us sites in the UK.
But with the property world still trying to deal with the fallout of closures and CVAs across the retail and casual dining sectors, is the gym boom too good to be true?
It has already been widely acknowledged that one of the problems behind this year’s domino-chain of restaurant closures was over-expansion.
“There are similar characteristics,” admits David Bell, director of leisure at Savills. That gold rush for space has, he says, meant several fitness operators are paying big rents. Some form of adjustment seems inevitable.
“There’s going to be consolidation as there always is,” he says. “That will happen over the next three to five years.”
However, Bell is relatively relaxed about the future. “The fitness market is actually bucking the trend compared to retail and restaurants,” he says. “It’s all linked to health and wellbeing and to millennials. I think it is driven by tech and social media.”
As long as customers are lusting after Instagram-worthy workout shots, fitness concepts will keep growing and keep taking the spaces left empty by other businesses.
The battle of the capital's most sought-after addresses continues, with Mayfair fighting back in the property pricing stakes, according to a review by estate agent Wetherell.
For the first time in 10 years, Mayfair apartment prices have opened up "a wide value margin" above fellow prime spot Knightsbridge.
The agency - which is based in Mayfair - said Knightsbridge has been under pressure due to a lack of new homes provision, outdated stock and constrained supply. It had commissioned market intelligence firm Dataloft to analyst luxury apartment sales and lettings values across London's prime postcodes over the 17 years from 2000 to 2017.
Where Mayfair has over 4,360 residential addresses, Knightsbridge has 2,500, which the estate agent said could mean the former has the advantage on number of opportunities for redevelopment and real estate value growth.
Last year, Mayfair apartment prices averaged £2,378 per sq ft, six per cent above Knightsbridge, which averaged £2,242 per sq ft. Nearly three-quarters of last year's sales in Mayfair achieved £2,000 per sq ft or higher, according to the analysis.
It marked a sharp rise on the year before, when Mayfair apartments just nudged above Knightsbridge - averaging £2,314 per sq ft and £2,299 per sq ft respectively. Prior to that, Knightsbridge took the crown, with greater values in 2015, 2014, 2013, 2012 and 2011.
Wetherell said that there was a brief period in 2007 when Mayfair prices were one per cent ahead of Knightsbridge's, with the development of One Hyde Park then helping to push Knightsbridge ahead.
The estate agent said a similar trend was emerging in the lettings market, with the highest rents in Mayfair now averaging £2,026 per week - 17 per cent higher than Knightsbridge.
Peter Wetherell, chief executive of the estate agent, said:
"Mayfair was historically London’s richest address. After 1945 many Mayfair homes were turned into offices, and planning priority was given to commercial premises.
This, combined with the development of One Hyde Park and other luxury Knightsbridge apartments led to the last decade of Knightsbridge being the capital’s top address."
Wetherell added that five years ago, planning permissions and office-to-resi conversions were halting the decline in Mayfair, leading to his estate agent's prediction Mayfair would claim the crown of London's most desirable address. He said the forecast has been proven "with the test of time, to be accurate".
The estate agent is also expecting a further boost from the Elizabeth Line, which launches in December. Crossrail impact reports have forecast a boost in property prices and new stations such as Mayfair's Bond Street are expected to bring a lift in residential prices to the surrounding areas.
London has overtaken New York as the top destination for the Norwegian wealth fund’s unlisted real estate investments, a report showed.
The $1 trillion fund is focusing on investing in ten locations, which it considers to be global cities that are expected to grow in terms of numbers, employment and trade.
London, New York and Paris accounted for 22.8 percent, 21.5 percent and 19.1 percent of the fund’s unlisted property investments in 2017.
In 2016, New York was first, followed by London and Paris, accounting for 19.2 percent, 17 percent and 13.1 percent, of these investments respectively.
The fund’s unlisted real estate investments corresponded to 2.6 percent of overal assets at end-2017. Its target is to invest up to 7 percent of its value in such properties over time.
The fund is a co-owner of London’s Regent Street and properties on the Champs-Elysees in Paris and Hudson Square in New York. It funnels the revenues from Norway’s oil and gas production, investing in stocks, bonds and real estate.
The fund made its first unlisted real estate investment in Asia, in Tokyo in December, and has eyed investing in Singapore, although it has yet to make a purchase in the city-state.
The fund invested 15 billion Norwegian crowns ($1.94 billion) in unlisted real estate in 2017, taking its total holdings to 219 billion crowns.
Source: https://uk.reuters.com / Reuters Staff
Estate agent Savills will embark on further international expansion after shrugging off concerns in the UK property market to grow revenues and profits last year.
Jeremy Helsby, the outgoing chief executive, said the company's focus for this year would be its expansion in Europe, where it has recently grown operations in the Czech Republic and the Netherlands. But also said Savills would be looking at opportunities in new markets including South America, the Middle East and India.
But the global real estate firm gave a cautious warning that while it had made a “solid start” to 2018, it anticipated a “tempering” of the recent strong transaction volumes in some markets this year amid geopolitical risks and rising interest rates.
In the year to Dec 31, strong growth in the UK and Asia, including Hong Kong, China, Australia and Japan, boosted Savills' pre-tax profits to £112.4m, up from £99.8m in 2016.
The company, which earns nearly two-thirds of its revenue outside the UK, said global turnover was £1.6bn in 2017, an 11pc increase on the year before.
Despite "challenging conditions" in the domestic residential and commercial markets, revenue in the UK rose 8pc to £626m.
It called out the resilience of its UK business, which delivered the second strongest revenue growth in 2017 behind Asia, which achieved income growth of 16pc, following heavy investment in Hong Kong and China.
Analysts at financial services firm UBS said fears that commercial transactions in the UK would slump following the EU referendum vote in 2016 seem not to have played out, with the market performing "better than expected", as occupiers and investors took a more "realistic" view on Brexit risks.
However, analysts agree that property markets in 2018 are expected to be more subdued. In December, the Royal Institution of Chartered Surveyors said house price growth would "grind to a halt" this year amid a toxic cocktail of low levels of sales and homes on the market, as well as cautious buyers.
Halifax said it predicts UK house price growth to remain low this year, between 0pc and 3pc.
Savills shares were up 0.3pc on Thursday morning, to 979p.
Analysts at Peel Hunt said: "The shares look fairly priced given the outlook, so current holders should be relaxed. Potential investors need to wait for a better buying opportunity".
Source: https://www.telegraph.co.uk / Sophie Christie
Manhattan real estate sales and prices took a fall in the fourth quarter, and they're likely to slide even further this year after the new tax rules take effect.
Total sales volume fell 12 percent compared with the fourth quarter of last year — the lowest quarterly level in six years, according to a report from Douglas Elliman Real Estate and Miller Samuel, the appraisal firm. The average sales price in Manhattan fell below $2 million for the first time in nearly two years.
Brokers say the declines were simply the result of uncertainty around the Republican tax plan, as buyers held off until the details of the new law became clear. They say many of those buyers have since rushed in and will help show a rebound.
Yet the luxury market in Manhattan is suffering from an expanding glut of high-end and highly priced apartments. And analysts say that while sales may rebound slightly in the first quarter of 2018, the tax law — which limits the deductibility of state and local taxes — will continue to add pressure to New York City housing prices, especially at the top.
"There will be an impact on prices and sales," said Jonathan Miller, president and CEO of Miller Samuel. "But it may take up to a year and a half to two years to see the full impact."
The high end of the Manhattan market is showing the biggest cracks. Inventory of luxury apartments — those in the top 10 percent by price — grew by 15 percent. There is now a 17-month supply of luxury apartments in Manhattan, up from 10 months a year ago.
And with giant new condo towers sprouting up in every corner of the city, those numbers are likely to grow.
Miller said that resales — as opposed to new development — are holding up strong, with median sales prices up by 2 percent over last year. But prices for new developments fell 17 percent over last year and the number of sales are down 20 percent.
The number of new developments is expected to continue to rise this year and next, which will add to inventory, Miller said. While demand for "low-end" apartments priced at $1 million to $2 million remains strong, sales of apartments of more than $5 million will get tougher. In part, that's because the rich have more discretion on when and where to buy homes — and with the costs of owning a home in New York going up with the tax plan, apartments aimed at the rich will see the biggest price hits.
Miller said that while buyers have already adjusted, sellers may take more time to catch up.
"The sellers were already recalibrating after 2015," he said. "Now they will have to readjust again."
Source: https://www.cnbc.com / Robert Frank