Foxton estate agents profits plunge by 64% as housing market slows

(qlmbusinessnews.com via bbc.co.uk – – Thur, 27 July 2017) London, Uk – –

Two of the country’s estate agent chains have posted slumping profits in the face of a slowing housing market.

London-focused estate agent Foxtons saw profits plunge 64% in the first six months of this year.

Another estate agent, Countrywide, also saw profits tumble, by 98% in its case. The firm said it would not pay a dividend.

Foxtons’ head said demand had slowed in the face of “unprecedented economic and political uncertainty”.

Countrywide said house sales exchanges were down 20%, 24% in London.

Countrywide said the first six months of this year were also tough in comparison with last year, which saw high levels of housing transactions brought forward to beat an increase in stamp duty changes and ahead of the EU referendum.

Its profits were £447,000, down from £24.3m.

Both agents are making deep cost cuts.

Foxtons pre-tax profits fell to £3.8m, down from £10.5m for the same period last year. Revenues fell 15% to £58.5m.

Foxtons said in its statement that there had been further cooling of the market in the second quarter of 2017, with the unexpected general election a factor in slowing activity.

It added that London was more greatly affected than the rest of the country.

Foxtons has been warning since 2014 that rapid price growth and strong demand in London had started to cool.

However, it said that in the longer term, it expected London to remain an attractive property market for sales and lettings.

 

Government to ban leaseholds on new-build houses in England

(qlmbusinessnews.com via independent.co.uk – – Tue, 25 July 2017) London, Uk – –

Ground rents on flats could also be cut to zero under proposals tobe outlined by communities secretary Sajid Javid

Builders are to be banned by the government from selling houses as leasehold in England and ground rents on flats could be cut to zero following widespread outrage over exploitative contracts.

In a blow for major housebuilders such as Taylor Wimpey and Persimmon, the communities secretary, Sajid Javid, will on Tuesday set out plans to “ban new-build houses being sold as leasehold as well as restricting ground rents to as low as zero”.

Flats can be continued to be sold as leasehold, but ground rents will be restricted to a “peppercorn” level and therefore be of little financial value to speculative buyers. The ban is expected to come into force after an eight-week consultation period.

The ban, while welcomed by campaigners, leaves the position of existing leasehold homeowners unclear. The DCLG is expected to consult on what it can do to support existing leaseholders with onerous charges, which could include tackling unreasonable rises – such as rents doubling every 10 years – and giving more powers to householders to fight unfair charges.

“Under government plans, [ground rents] could be reduced so that they relate to real costs incurred, and are fair and transparent to the consumer,” said the DCLG.

Tens of thousands of homebuyers have been caught in spiralling ground rents, which have in some cases left homes virtually unsaleable. Javid cited one family home that is now unsaleable because the ground rent is expected to hit £10,000 a year by 2060.

A Guardian Money campaign has over the past nine months highlighted reports of buyers trapped in properties valued at zero just six years after being built, £2,500 fees demanded by freeholders for permission to build an extension, and quotes of £35,000 to buy freeholds on detached houses only just a few years old.

Javid said: “It’s clear that far too many new houses are being built and sold as leaseholds, exploiting home buyers with unfair agreements and spiralling ground rents.

“Enough is enough. These practices are unjust, unnecessary and need to stop. Our proposed changes will help make sure leasehold works in the best interests of homebuyers now and in the future.”

Javid told BBC Radio 4’s Today programme that ground rent had been used by some housebuilders “as an unjustifiable way to print money”.

He said building firms should do more to compensate those affected by such problems: “If they are responsible, if they want to keep their business in the future, if they want to show that they really care about their customers, they should be seeing what they should do to right some of the wrongs of the past.”

However, Javid said there were not as yet any definite government plans to compel builders to take action to assist those already affected.

“It’s an eight-week period of consultation to look at what action can be taken,” he said.

“I don’t profess that I’ve got all the answers on this. I’ve identified a problem, we’ve come up with some potential solutions. We don’t pretend they’re easy, there are are complex matters here.”

New legislation will close legal loopholes to protect buyers, some of whom have faced repossession orders after failing to keep up with the ground rent. The government will also change the rules on help-to-buy equity loans so that the scheme “can only be used to support new build houses on acceptable terms”.

Sebastian O’Kelly, whose Leasehold Knowledge Partnership has been the sharpest critic of abusive practices, welcomed the ban. He said: “Leasehold houses are an absolute racket: a means by which developers have managed to turn ordinary people’s homes into long-term investment vehicles for shadowy investors, often based offshore. In short, plc housebuilders have been systematically cheating their own customers.”

The practice of selling houses as leasehold has been particularly prominent in the north-west of England.

DCLG statistics estimate there were 4m residential leasehold dwellings in England in the private sector in 2014-15 and of these 1.2m were leasehold houses.

Justin Madders, Labour MP for Ellesmere Port and Neston, who has many constituents suffering from leasehold problems, said: “What has occurred in this sector should be regarded as a national scandal. Therefore, once we have taken action to drive out these rotten practices, the ultimate aim must be to hold to account the men and women who must have known that creating this second lucrative income stream for developers would ultimately be at the cost of their customers.”

Jo Darbyshire, whose Taylor Wimpey-built house has a clause where the ground rent doubles every 10 years and is part of the National Leasehold Campaign group on Facebook, said the ban was “fabulous news”.
“It’s great that others won’t be stuck in the nightmare we have been in,” she said. “But what are they really going to do for people in our position? There now needs to be a national review, like the review of endowment misselling, to review every case and put people back into the position they would have been without these onerous clauses.”

Earlier this year, Taylor Wimpey agreed a £130m deal to help distressed leasehold buyers. At the time, it said that the contracts where ground rents double every 10 years were legal but “not consistent with our high standards of customer service and we are sorry for the unintended financial consequence and concern that they are causing”.

By Patrick Collinson and Peter Walker

QLM Business News and Market Analyses Now Available Digitally

 

QLM Business News Digital Media Channel for offering the latest business news as well as market analyses. Thanks to the fast-paced life people lead, most busy business people prefer to browse the Net on the go in order to keep up with the latest business news.

www.qlmbusinessnews.com

Barratt to build 17,000 new homes the highest in nine years

(qlmbusinessnews.com via telegraph.co.uk – – Wed, 10 May, 2017) London, Uk – –

Barratt is on track to build more homes this year than in any of the previous nine, boosting its profits to the high end of the City’s expectations.

Shares in the UK’s largest house builder rose 4pc on the news that its completion levels for the year to June are now expected to be around 17,350, which is the highest since 2008. This is a 55pc increase over the last six years.

The FTSE 100 builder said its pre-tax profits would meet the high end of City expectations, at around £733m.

It went on to say, despite data elsewhere that the market is slowing, that conditions remain “good”, with the company benefiting hugely from the Government’s Help to Buy scheme, which allows first-time buyers to purchase a home with a 5pc deposit, as well as wider availability of mortgages.

David Thomas, chief executive, said he is not concerned about the future of Help to Buy, which is due to end in 2021.

Barratt sells one third of its homes using the scheme, but he said he is sure there will be a “sensible dialogue” on the issue after the election.

He added: “I maintain that if you want to build houses you have to have an effective scheme, like Help to Buy, to complement the mortgage market.”

However he emphasised the need for visibility, saying the 2021 date “is in the relatively near future. We’re buying land now that we will be trading on in four to five years.”

Barratt’s forward sales rate also rose, and Mr Thomas said that the greatest challenge was not a lack of supply but instead a shortage of skilled labour and access to materials, which is pushing up build cost. He said: “That has shifted dramatically from six years ago when the challenge was on the sales side.”

Anthony Codling, an analyst at Jefferies, said: “Our view of a two speed housing market continues to be validated: whilst the second hand market continues to face headwinds, Barratt will deliver its highest number of home sales in nine years.

“We are pleased to see that Barratt has a clean bill of health with respect to leasehold issues that have hampered others.” It comes after fellow FTSE 100 house builder Taylor Wimpey had to set aside £130m to settle disputes over homes sold with “doubling” ground rents.
By Isabelle Fraser

 

Houston Market Square Tower Glass bottomed Sky Pool

 

Dubbed the Sky Pool, the infinity pool is on the 42nd floor and extends 10 feet over the side of Market Square Tower. Sweat-inducing footage shows one brave resident gingerly walking around on the 8-inch thick plexiglass. He appears to be stepping into thin air as tiny cars zip past in the busy street 500 feet below in Houston.

London Docklands Factory to Build Thousands of Prefab Homes

ThisParticularGreg/Flickr

(qlmbusinessnews.com via telegraph.co.uk – – Thu, 13 Apr, 2017) London, Uk – –

Plans are being drawn up for a factory in east London that would supply thousands of modern prefab homes.

The scheme in the Docklands will be the first of its kind in the capital and eventually provide 3,000 new homes. Although modular homes have been built and shipped into other London sites, this is the first development with its own factory.

The Government is keen to promote prefab housing as a way of solving the housing crisis. Modular homes can be built in sections and then assembled quickly on site. Currently, around 15,000 new homes are produced this way each year.

The developer First Base has brought on the global engineering consultancy firm Aecom to help with the plans. The factory, in Silvertown, would deliver homes up to nine months quicker than was possible using normal house building techniques, First Base said.

The Silvertown development, which is being built by a partnership between Chelsfield Properties, First Base and Macquarie Capital, spans 62 acres in total.

The factory is expected to become operational later this year, producing two-bedroom homes in two parts, which can be put together on site.

Building modular homes costs 20pc less than traditional methods, the company said.

A number of other housebuilders have set up similar factories, although none has yet put a prefab home on one of their development sites.

In December, the housing association Your Housing Group signed a deal with China National Building Material Company, a Chinese state-owned construction company, to build 25,000 modular homes in the next five years.

Last year the housing minister, Gavin Barwell, said the Government saw a “huge opportunity” in manufacturers building houses off-site to hit ambitious building targets.

A surge in prefabs after the Second World War helped families left homeless after the Blitz.

UK Paramount Theme Park Construction Set to Cost £3.5 billion

It’s the news British film-lovers and thrill-seekers have been waiting to hear forever – no longer do we have to schlep across the seas to get our fix of stardust and adrenaline, for the UK is finally getting its own ‘Disneyland’.

The theme park will be the first of its kind in the UK, and is being created by film company Paramount at a cost of £3.5 billion.

Paramount is the company behind such iconic films as Titanic, Forrest Gump, The Godfather, Footloose, Braveheart and Iron Man.

Touted as the “UK Disneyland,” the new theme park is set to be built in Dartford, Kent and will feature attractions inspired by the films.

However, the park will also include rides inspired by BBC Worldwide and Aardman Animations, the creators of Wallace and Gromit, Shaun the Sheep and Chicken Run.

The resort will be divided up into different areas such as Adventure Isle, Land of Legends, Cartoon Circus, Starfleet Command, Action Square, Port Paramount and Entertainment City.

As well as rides, the theme park is planned to include a theatre, cafes and restaurants, shops, hotels and a nightclub.

Much like at Disneyland, there will be a “Paramount and Friends Carnival” every afternoon and a show “celebrating the works of Paramount Pictures and our other content partners” every evening.

At an expected £57 for a full-priced day ticket, a family trip to the theme park will not be cheap.

Despite the price, the creators are expecting to welcome up to 40,000 visitors a day.

The plans for the park, however, are yet to be approved – a development consent order (DCO) will be submitted to the government in November, Essex Live reports.

But Humphrey Percy, group CEO of the project’s parent company Kuwaiti European Holdings, is confident there’ll be no problems getting the green light to go ahead with the park: “We have the financial backing to take us all the way through that process,” he said.

Provided the plans are approved by the Government, construction of the theme park should commence in 2019, with the 872-acre resort set to open in 2022.

Leasehold traps buyers in properties with rocketing ground rents

(qlmbusinessnews.com via theguardian.com – – Wed, 5 Apr, 2017) London, Uk – –

Landlords will cash in as resurgence of leaseholds traps buyers in properties with rocketing ground rents, say campaigners

The worsening “nightmare” of the leasehold system in England and Wales is holding millions of homebuyers hostage to exorbitant bills, according to a report by campaign group HomeOwners Alliance, which estimates that landlords are in line to pocket £4bn from lease extensions.

Leasehold, once seen as a dying relic of the Victorian property market, has returned with a vengeance since the 1990s, according to the report. In 1996 just 22% of new builds in the UK were sold as leasehold, but this has doubled to 43% today. In London, nine out of 10 new builds are now leasehold.

The HomeOwners Alliance said that of the 5m leasehold properties in England and Wales, 1.58m are “owner occupied”. “But in the eyes of the law, they are in fact owned by their freeholder. The UK’s official rate of home ownership was 64.6% in 2014, but this includes the leaseholders who are not their legal owners – subtract them, and the rate falls to just 58.9%,” the alliance said in its Homes Held Hostage report.

It found that four out of 10 leaseholders do not know the length of time remaining on their lease, while of those that do, almost a quarter (equal to 370,000 homes) have less than 80 years to run. “The cost of extending these is likely to exceed £4bn.”

Most leaseholds are flats, but the report highlights the growing number of newly built houses being sold as leasehold by developers, “a practice which was almost unheard of 20 years ago”.

Some buyers of leasehold houses are finding themselves trapped in properties made unsaleable by rocketing ground rents, with many doubling every 10 years. In one case highlighted by the Guardian, the owner of a £100,000 flat bought on a 125-year lease in 2010 found this year it was valued at zero by mortgage companies because of the ground rent clause.

The HomeOwners Alliance is demanding that the government calls a halt to new leaseholds, with developers forced to switch to “commonhold” instead. This is similar to the US-style system used for condominiums, which effectively gives a freehold to every flat buyer alongside a common responsibility for the building. It was introduced in the UK in 2002 but has been a “massive disappointment”, according to Paula Higgins, who runs HomeOwners Alliance.

“The main reason is that housebuilders have a strong financial incentive not to offer commonhold,” said Higgins. “Why would a housebuilder hand over commonhold ownership to flat buyers, when it can retain the freehold and sell that freehold on to investors at a premium a few years down the line, and collect ground rent and administration fees in the meantime?

“Leasehold ownership can be traced back to the Domesday Book and it is a practice that should be relegated to history.”

In its recent white paper on housing, the communities secretary, Sajid Javid, promised an end to “leasehold abuse” by which homebuyers are locked into leases with spiralling ground rents.

But Labour’s housing spokesman, John Healey, said: “This report shines new light on the difficulties faced by some homeowners who own their home on a leasehold basis. Often in the dark about the exact terms of their lease and currently unprotected from punitive terms including huge rises in rip-off ‘ground rents’.

“Labour would start by giving leaseholders security from rip-off ground rents and end the routine use of leasehold ownership in new housing developments.”

Widespread ignorance about leasehold among young flat buyers – made worse by poor quality information from estate agents – is highlighted in the report.

It found that less than half of adverts on popular property websites were clear as to the correct tenure of a property. Only 49% of flat listings specified whether the property was a share of freehold or a leasehold property. Furthermore, only a quarter of the listings (24%) were specific about the length of time left on the lease.

The HomeOwners Alliance’s report calls for new leasehold houses to be outlawed, and mandatory commonhold tenure for all newly built flats. For existing leases, it says lease extensions should always be a minimum of 250 years, with only a peppercorn rent.

By Patrick Collinson

‘Bank of mum and dad’ funding, making housing market unfair

 

Mark Moz/flickr
(qlmbusinessnews.com via theguardian.com – – Tue, 28 Mar, 2017) London, Uk – –

More first-time buyers than ever are using family money, exacerbating inequality, says Social Mobility Commission

The number of first-time buyers relying on family loans from the “bank of mum and dad” to fund their deposits is exacerbating inequality and impeding social mobility, a government-backed study has warned.

The Social Mobility Commission found the percentage of first-time buyers turning to family for financial help had increased from 20% in 2010 to a historic high of 34%. The report also found just one in three (31%) 25- to 29-year-olds owned a home compared with 63% of the same age group in 1990.

“Home ownership helps unlock high levels of social mobility but it is in freefall among young families,” said the former Labour MP Alan Milburn, the chair of the commission.

“Owning a home is becoming a distant dream for millions of young people on low incomes who do not have the luxury of relying on the bank of mum and dad to give them a foot up on the housing ladder. The way the housing market is operating is exacerbating inequality and impeding social mobility.”

The report, which used data from the University of Cambridge and Anglia Ruskin University, examined a series of surveys, including the English Housing Survey – which interviewed around 13,300 households in 2013-14 – and the Labour Force Survey, which looked at homeowners by age between 1995 and 2015.

It found one in 10 first-time buyers used inherited wealth and that 12%, whether it was a first property or not, were using a “gift or loan”.

First-time buyers who receive cash or at least a loan from their parents can buy 2.6 years earlier that those who do not, and this figure rises to 4.6 years in London.

The study also found 30% of households with dependent children held assets that could be used towards a home deposit, but only around 10% of households without any formal education qualifications over two back-to-back generations felt they could help out their kids.

The report predicts that if the economy weakens, the proportion of first-time buyers being propped up by family will remain at about one third until 2025, but it will boom to 40% by 2029.

Theresa May’s government earlier this year strayed from David Cameron’s “home-owning democracy” approach to housing and announced tougher regulation on landlords.

The proportion of people living in private rented homes has doubled since 2000.

“It is welcome that the government recognises the growing problem people face in getting on the housing ladder,” said Milburn, who was a Treasury and health minister in Tony Blair’s governments.

“A major national effort is needed to expand opportunities for home ownership and will require more radical action on housing supply.”

The commission’s State of the Nation 2016 report encouraged the government to build 3m homes over the next decade and build on the green belt.

The report’s lead author, Dr Paul Sanderson, said only “better-off” young people with parents who had accumulated housing wealth were likely to consider home ownership unless there were “radical changes to the housing market”.

“It is further embedding social immobility into the housing market,” said the Anglia Ruskin senior lecturer and University of Cambridge fellow.

“Obviously it’s down to affordability, increasing housing prices and incomes staying static compared to inflation.”

Sanderson said an increase in building social housing, regulation of planning developments and a focus on the help-to-buy scheme could help turn the tide.

John Healey, the Labour party’s shadow secretary of state for housing and a former government minister, however, criticised flaws in the scheme.

“This is further evidence of an inequality of wealth and opportunity for home ownership in this country and it’s part of seven years of failure on housing under Conservative ministers,” Healey told the Guardian.

“The government has got to do more to help young first-time buyers who don’t have the bank of mum and dad behind them.

“They could start by making sure help to buy is better targeted. It’s indefensible that help to buy is helping almost 25,000 people who are not first-time buyers.

“Younger people on smaller incomes are increasingly locked out.”

By Peter J Walker

Uk Government scheme reveal revaluated business rates

 

Tim Tabor/flickr

(qlmbusinessnews.com via telegraph.co.uk – – Tue, 7 Mar, 2017) London, Uk – –

The Government has incurred the wrath of the so-called “winners” of the business rates revaluation as their new bills reveal they are being denied reductions to compensate companies elsewhere in the country.

Last month David Gauke, chief secretary to the Treasury, attempted to defend the burdensome business rates system by arguing that three quarters of UK companies will see a fall in rates.

He also argued the Government had introduced a £3.6bn fund to smooth the burden for companies facing a steep jump in rates.

However, new rates bills have revealed that the majority of businesses will not enjoy the full value of their rates decreases.

The £3.6bn so called “transitional relief fund” will come directly from companies who will be denied the business rate reductions they are entitled to.

Nicholas Roffe, owner of the Furze Bush Inn in Newbury, told The Daily Telegraph he thought “someone had pushed the wrong button” when his latest business rates bill was delivered yesterday from Basingstoke and Deane borough council.

Mr Roffe’s was due to have his rates bill reduced by £4,181 from £24,079 to £19,898 in the latest revaluation. However, the pub owner has been landed with a £2,206.32 transitional adjustment charge, meaning he must still pay £22,104.52 this year.

“Relief to me does not mean charging more, but I am being charged more to compensate for relief”, said Mr Roffe. “It’s not fair.” The adjustment means that thousands of hard-pressed companies who believed they were in line for significant reductions in their bills will see the drop limited.

“As business rates bills start to land on doormats, firms are discovering just how inadequate the Government’s transitional relief scheme is”, said Jerry Schurder, head of business rates at Gerald Eve.

Fresh analysis reveals that the North West of the country will be particularly hurt by the stealth move. Government figures show that the region will be denied around £391m of business rates reduction with roughly £611m transferred into the transitional relief fund.

Meanwhile, London will be the biggest beneficiary as it will take around £1.09bn of the £3.6bn fund.  “These firms have been struggling for many years with bills divorced from economic reality, and to make them subsidise businesses in thriving areas is simply unjust”, said Jerry Schurder, head of business rates at Gerald Eve.  The move will also impact larger companies.

Marks & Spencer currently pays £482,090 in rates on its Stockport shop and is due to have its bill slashed to £242,000 but due to the Government’s cap, the ailing retailer’s bill will still be at £464,835 – meaning a measly saving of £17,255 compared to its eligible saving of £240,090.

“Not one penny of the Government money will be part of the £3.6bn fund”, said Paul Turner Mitchell, business rates expert at CVS. “What it means is that businesses in less prosperous areas will have their rate deductions denied in order for businesses in more prosperous areas to be afforded a cap on their increases.”

“It means that those businesses that thought they would be one of the winners, will still be a loser because they will not be getting their full entitled business rate reduction”.

Chancellor Philip Hammond has suggested that the upcoming Budget will include easing the burden on those hit hardest by the forthcoming business rate revaluation.

However, it is unlikely that the Government will accelerate the uprating of business rates from the higher retail price index (RPI) to the lower consumer prices index (CPI) from the next decade.

The British Retail Consortium has warned the Chancellor that delaying the switch to CPI until 2020 would result in retailers paying an extra £180m over the two years from April 2018.

By  Ashley Armstrong

The Most Amazing Celebrity Homes On The Planet

 

 

If you had millions of dollars what would you build and create the most amazing house ever? Here are 10 Insane Celebrity Homes. Subscribe to Talltanic http://goo.gl/wgfvrr 4. Howard Stern Two hundred thousand for hurricane shutters? Ten million on renovations alone? No problem for the most successful radio personality of all time. Stern reportedly spent 52 million dollars to purchase this insane mansion in Palm Beach, Florida in early 2013 and had those refurbishments done early in 2016. The specialty shutters weren’t cheap and so as you might guess, they are very heavy duty and able to withstand winds and debris impact of up to 276 miles per hour. They are also remote controlled and cover every one of the houses many windows. The home itself is even more remarkable. The mansion boasts twelve and a half bathrooms, in case the first twelve are taken, five bedrooms and sprawls over nineteen thousand feet across the Florida beach front. 3. Dwyane Wade+Gabby Union Dwyane Wade is a star guard for the Chicago Bulls. Gabrielle Union is a very well known actress. The couple is, by all accounts very happy together and with salaries that can afford them cribs like this who could blame them? The ecstatic couple got married on August 30, 2014, and leased this ridiculous castle for the occasion. The house was priced at 10.9 million dollars before it was delisted shortly before the wedding. The property was built by architect Charles Sieger, for himself and includes a giant, landlocked moat and formal gardens that surround the property. 2. Bill Gates Though the richest man in the world is known as a charitable man who spends his money frugally, he opened his wallet a little bit to build his dream home. The home cost a record-setting sixty-three million dollars to build and took seven years to complete. The property lies in the hills of Medina, Washington and is surrounded by nature. The estate has a variety of garages, including an underground cave that can hold ten cars, six kitchens tended by a twenty-four-hour on-call chef, a fifteen hundred square foot theater, a twenty-one hundred square foot private library and a massive aquarium. This home is incredible, but of course, it’s not the only property the billionaire owns on the west coast. He also bought a ranch in California for eighteen million dollars that has a private race track. 1. Mukesh Ambani Ambani is no celebrity; he’s the Chairman of Reliance Industries, a gigantic conglomerate holding company in India. But he is a billionaire and had this crazy pad built in South Mumbai that is valued at around one billion dollars, making it the most expensive private residential property on the planet. The 27 story property, called Antilia, and its unique design have been a part of the Mumbai skyline since being completed in 2010. The extravagant home’s location in a destitute area of Mumbai is extremely controversial. The property has six floors of underground parking, three helipads and a total interior space of over four hundred thousand square feet. The crib also features nine high-speed elevators, a two story health center and six floors for Ambani and his family. An entire floor is dedicated to servicing Ambani’s stable of cars.

Redrow chief executive says, Britain’s housing market is not broken

 

 

Redrow is one of the UK’s leading residential housing developers. The company’s chief executive, John Tutte, discusses the government’s housing White Paper with Ian King and says the paper’s title, which suggested that Britain’s housing market is ‘broken’, was headline-grabbing. He also says that parts of his business will struggle if EU nationals are not able to work in the UK following Brexit

Stamp duty making the UK’s housing crisis worse, says property chief

 

Chinese Developers
Gareth Williams/flickr.com

(qlmbusinessnews.com via telegraph.co.uk – – Mon, 23 Jan, 2017) London, Uk – –

Stamp duty is making the UK’s housing crisis worse by distorting the market and harming long-term development, the head of one of the world’s biggest property groups has warned.

Christian Ulbrich, global chief executive of Jones Lang LaSalle (JLL), said homebuyers were “paying for nothing” in a system that penalised landlords and second homeowners while doing little to address a lack of housing supply.

Britain has the highest property taxes of any developed country, figures from the Organisation for Economic Co-operation and Development show. Mr Ulbrich said the current system, where stamp duty jumps from 5pc to 10pc of a property’s value above £925,000, was “politically motivated”.

While the then Chancellor of the Exchequer, George Osborne, cut the rate of tax for the vast majority of house purchases with a big overhaul of the system in 2014, Mr Ulbrich said, the policy still made it “prohibitive” to build more houses.

“For long-term development, stamp duty is definitely harmful, because the stamp duty in itself doesn’t create any value. It’s an additional cost that makes development more unattractive and it has to be considered in the pricing,” he said.

Mr Ulbrich also hit out at the 3 percentage point surcharge that landlords and families pay when buying second homes, which he said had “a very strong dampening impact on the market”. He said he understood aims to reduce the influx of foreign money into the British property market, which Mr Ulbrich said would remain a haven for overseas investors, even after the Brexit vote.

However, he said, increasing supply would help to “create an environment where that demand finds a home”. “We need more building,” he said. “That is good for the economy”.

Mr Ulbrich cited the Crossrail scheme in London as an example where “focus on building the right infrastructure” helped to “enlarge the spectrum of commutable areas around London where people can still live and come to work every morning. “Stamp duty doesn’t help to build one single apartment, it just makes it more expensive.”

Mr Ulbrich also warned that JLL would be hit by a “double whammy” this year from rising business rates and the subdued commercial property market. Research shows that business rate bills in London are likely to soar by £9.4bn over the next five years. The JLL chief criticised the system as counter-cyclical, as he suggested that more frequent revaluations were necessary.

“The [commercial property] market is currently cooling down, at the same time, business rates are going up because they were reflective of values before the Brexit vote. But the impact is happening after the Brexit vote,” he said. “We were very much hit by the overall loss in sentiment in the property market in London, and then we got the increase in business rates, so it’s a real double whammy.”

By Szu Ping Chan

UK government announced plans on Monday to build 17 new towns and villages

(qlmbusinessnews.com via uk.reuters.com – – Mon, 2 Jan , 2017) London, UK – –

Chinese Developers
Gareth Williams/www.flickr.com

 

Britain’s government announced plans on Monday to build 17 new towns and villages across the English countryside in a bid to ease a chronic housing shortage.

The new “garden” communities – from Cumbria in the north to Cornwall on England’s southern-most tip – would be part of a scheme to build up to 200,000 new homes, housing and planning minister Gavin Barwell said in a statement.

That would still be a fraction of the million houses the government has said it wants to see built from 2015-2020 in an already densely populated nation.

Successive governments have promised to tackle a shortage that has seen house prices spiral in London and other major cities, out of the reach of many buyers.

But developers have complained about a lack of available land and strict planning laws that outlaw development on “greenbelt” land around existing towns and give local councils the power to block construction.

Britain asked local authorities last year to say if they were interested in having new garden developments – based on a 19th century idea of housing growing populations in self-contained towns surrounded by countryside.

Barwell announced the locations for the first time on Monday and said the state would loosen planning restrictions and give 7.4 million pounds ($9.10 million) to help fund the building.

The three newly announced towns, with more than 10,000 homes each, will be built near Aylesbury, Taunton and Harlow, the government said.

The new garden villages, including Bailrigg in Lancaster, Long Marston in Stratford-on-Avon, Welborne in Hampshire and Culm in Devon, would each have 1,500-10,000 properties.

Together with seven other garden towns already announced, the new developments could provide almost 200,000 homes, Barwell said.

by Kylie MacLellan

Business rates in London could be up an extra £4bn over the next five years

(qlmbusinessnews.com via telegraph.co.uk – – Sat, 31 Dec  2016) London, Uk – –

UK public finances
London Skyline/Megan Trace/flickr.com

London properties should be uncoupled from the national business rates system to prevent companies in the capital being treated as a cash cow, say the capital’s businesses.

Businesses in London could be forced to stump up an extra £4bn over the next five years under an upcoming revaluation, which has led the London Chamber of Commerce and Industry to call for the capital to have a separate business rates system or risk a “profound” impact on the capital’s economy.

The extra rates burden could force small, independent shops, bars and restaurants, which are already reeling from rocketing rents, to close down or move to cheaper locations, the LCCI has warned.

Property values in London have soared since the last revaluation in 2008, meaning that many businesses will be hit with rocketing bills under the new regime.

Business rates are often the third largest outgoing for companies after salaries and rents.

In total, the extra burden for London could be as much as £885m a year because of an upcoming revaluation, due in April, as companies across the city face an average rise of 11pc.

Few other places have seen values rise so significantly, with the result that businesses in the capital will pay disproportionately more than elsewhere in the UK. St Pancras Station will face the biggest jump in rates, paying £10.1m a year, an increase of £21.5m, or 73pc, over the next five years, exclusive analysis for The Telegraph by CVS, the business rates specialist, has found.

The Royal London Hospital in Whitechapel also faces a £13.5m jump in its rates bill over the next five years while the demand on the BBC for Broadcasting House in Portland Place will rise by £19.5m.

Harrods, Selfridges and John Lewis will also face steep rises, CVS calculated. Some West End retailers and office occupiers in Shoreditch will see bills more than double as a result of the delayed revaluation, which was held back for two years to prevent the changes from taking effect just before the last general election.

The Chancellor of the Exchequer, Philip Hammond, has proposed a relief scheme that would limit increases for business to 42pc in a year. This has been considered as woefully inadequate by critics who have highlighted that in the last business rates revaluation, rises were capped at 12.5pc.

Colin Stanbridge, chief executive of the LCC, said: “The Government should consider proposals for London to be ‘uncoupled’ from the national valuation system that gives London’s businesses an unfair deal.

“We are not asking for special treatment for London nor do we seek to implement changes that will see the rest of the country lose out, but at the same time we do not want to risk businesses shutting up shop or moving out of London altogether.

“We need to be wary of potential pitfalls including business being viewed as a ‘cash cow’,” Mr Stanbridge said.

The LCCI says there is a case for “substantive” changes to the rates system, including breaking the link between revaluations and the fixed tax yield it generates. Doing so would prevent what the chamber described as “punitive rises” in the future.

According to the LCCI, the new rates will hit small- and medium-sized businesses particularly hard, as they are less able to find the resources to pay the higher bills.

There has also been criticism of the Government’s plans to reform the business rates appeals process, which will mean that companies have to pay their rates bills for an entire year, even if the bill is incorrect.

Ashley Armstrong and Alan Tovey