Barratt boss warns of ‘marked slowdown’ in housing market

(qlmbusinessnews.com via bbc.co.uk – – Wed, 11th Jan 2023) London, Uk – –

Housebuilder Barratt says it has seen a “marked slowdown” in the UK housing market over the past six months.

Boss David Thomas said the market had been hit by “political and economic uncertainty” and rising mortgage rates, which made homes less affordable.

Mortgage costs surged after the government's mini-budget in September, peaking at 6.65% for a two-year deal.


——————–Advertisement————————


 

Barratt said it was approving fewer new development projects and pausing hiring.

The company said the outlook for the second half of the financial year was “uncertain”.

“The first half of the financial year has… seen a marked slowdown in the UK housing market,” said Mr Thomas.

“Political and economic uncertainty impacted the first quarter; this was then compounded by rapid and significant changes in mortgage rates which reduced affordability, homebuyer confidence and reservation activity through the second quarter.”

The firm said buyer confidence and the “availability and competitive pricing of mortgages” were “critical to the health of the UK housing market in the coming months”.

Mortgages had already been getting more expensive last year due to interest rate rises brought in by the Bank of England, but rates peaked in the aftermath of the mini-budget announced by former prime minister Liz Truss and her then chancellor Kwasi Kwarteng.

Since then, average five- and two-year fixed-rate deals have dropped below 6%, although rates are still much higher than they have been in recent years.

It means a homeowner coming to the end of their fixed-rate mortgage deal and looking for a new one, or first-time buyers taking on their first mortgage, have seen such loans become much more expensive.

Recent figures from the Bank of England suggested mortgage approvals fell to their lowest level in two years as interest rate rises put off buyers.

The Bank has been putting up interest rates, which makes borrowing money more expensive, in a bid to reduce inflation.

‘Buyers cautious'

Last week Halifax said the average house price in the UK fell for the fourth month in a row in December, as the rising cost of living and higher interest rates put off buyers.

The bank said the average house price was now £281,272 and added buyers and sellers would “remain cautious” over the coming year.

Barratt said that throughout the last six months, its housing developers had been “very selective with respect to the land opportunities on which we have been prepared to bid, reflecting the increased uncertainty on the outlook for both the UK economy and the housing market”.

“In the period we have approved 16 new sites but these were more than offset by 22 previously approved sites which will no longer proceed,” it said.

Aarin Chiekrie, equity analyst at Hargreaves Lansdown, said higher average selling prices had helped “offset some of the pressure of falling sales” at Barratt.


——————–Advertisement————————


 

He warned fears over the recession “put housebuilders in a tricky spot”, but added Barratt's “significant net cash position of £965m” gave the FTSE 100 firm “plenty of wiggle room compared to peers, even if the housing market deteriorates further”.

Barratt said if the housing market continued on its current downward trend, Barratt and its joint ventures expected to build a total of 16,000-16,500 homes in the year to 30 June – down from a projected 17,475.

By Michael Race

House prices: Growth slows with higher mortgage rates especially impacting more expensive areas

(qlmbusinessnews.com via news.sky.com– Fri, 23rd Dec 2022) London, Uk – –

With London house prices down nearly 25% over the last five years, Zoopla is seeing renewed demand for urban properties and flats and a waning of COVID-19 era appetite for coastal and rural homes.

The average UK property is £17,500 more expensive now than a year ago though house price growth has slowed and London properties are nearly 25% cheaper than five years ago, according to data from property website Zoopla.


——————–Advertisement————————


House prices have risen 7.5% over the past year, though the increase has slowed in the past three months to 0.3%, Zoopla said.

That slowdown is expected to continue into 2023 when prices will start to decline by mid-year.

House prices have increased 22% over the course of the past five years, outpacing average earnings growth, the Zoopla figures say.

But the cost of a property is expected to drop as demand weakens due to a combination of higher mortgage ratescost of living pressures and low consumer confidence.

The impact of higher mortgage rates is being felt least in more affordable markets and most keenly in the most expensive parts of the UK, Zoopla found.

Price growth has been slower in the upper end of the market but where prices are more expensive, higher rates have a greater impact on borrowers.

Mortgage rate increases began in the wake of the September mini-budget as expectations rose that the Bank of England would increase interest rates further than expected in an effort to bring down inflation, which many feared would spiral due to unfunded tax cuts and spending on energy supports.

John Lewis reveals £500m plan to build 1,000 rental homes

(qlmbusinessnews.com via news.sky.com– Fri, 2nd Dec 2022) London, Uk – –

The partnership says its tenants can expect “first-rate service and facilities”, adding that its properties will be furnished with John Lewis products.

The John Lewis Partnership has revealed plans to build 1,000 rental properties on its land as part of a drive to diversify its business.


——————–Advertisement————————



The employee-owned group, which is spearheaded by its eponymous department stores and Waitrose supermarkets, said a joint venture with investment firm abrdn aimed to achieve a tenth of its ambition to build 10,000 new homes over the next decade.

It would see John Lewis develop and manage the proposed new sites in Bromley and West Ealing in Greater London, which would require Waitrose shops to be redeveloped.

A vacant John Lewis warehouse, at Reading in Berkshire, would also be transformed under the plans.

The project, which is subject to planning permission, includes commitments to affordable housing and sustainability tied to its 2035 net zero pledge, the partnership said.

“We want to create homes that will provide a stable income for the partnership, and moving into housing aligns with our purpose to make a positive difference for our partners, customers and communities”, the statement added.

The sites were chosen according to their central location and proximity to transport links.

It announced the investment against a backdrop of record private rental costs, with tenants across the UK facing an average monthly bill of over £1,100 per month.
Across London, the figure is double that sum following a 22% year-on-year increase during the first nine months of 2022, according to estate agency Foxtons.
John Lewis said its plans would help ease a shortage of 75,000 rental homes in the capital.

Nina Bhatia, its executive director for strategy and commercial development, said: “Our partnership with abrdn is a major milestone in our ambition to createmuch-needed quality residential housing in our communities.

“Our residents can expect homes furnished by John Lewis with first-rate service and facilities.


——————–Advertisement————————



“The move underlines our commitment to build on the strength of our brands to diversify beyond retail into areas where trust really matters.”

James Sillars

 

 

Foxtons revenues gets boost from high rents and longer tenancies

(qlmbusinessnews.com via news.sky.com– Fri, 28th Oct 2022) London, Uk – –

A shortage of property to let and increased demand from tenants has helped Foxtons to rake in £29m in three months.

Why is the UK’s rental market in chaos?

(qlmbusinessnews.com via news.sky.com– Fri, 14th Oct 2022) London, Uk – –

Listings are down and inquiries are up, meaning that a rising number of renters are fighting over a dwindling supply of homes. Experts say the situation is being exacerbated by rising mortgage rates, which are turning the already strained rental market into a “pressure cooker”.

The upwards pressure on rents is being exacerbated by rising demand.

Sky News analysis of data from SpareRoom, the flatmate-finding service, shows that the average number of inquiries per rental ad in the UK is almost four times what it was in September 2019, rising from 3.2 to 11.9.

In Sunderland, almost 10 times as many people are responding to an ad as in September 2019 and in Bradford, there has been a six-fold increase.


——————–Advertisement————————


The most competitive area for rentals is the west central area of London, where listings receive 86.5 inquiries on average, up from 16.1 in September 2019.

Neal Hudson, director of Residential Analysts, said that some properties may not even make it online because there is so much interest.

“Estate agents and landlords have a massive book of people that are looking for property and so they're not going to go to the hassle of sticking it on Zoopla or even on their own website,” he said.

Rising mortgage rates affect renters too

A lot of attention has been given to the impact of rising interest rates on homeowners.

But renters make up a bigger portion of the market and are also negatively affected by the rising cost of mortgages.

“Downturns tend to lead to an increase in demand for rental property because mortgages become either too expensive or unavailable, particularly for first-time buyers,” Mr Hudson said.

“You end up with a pressure cooker situation where more and more people are coming in, but not as many people are able to get out and that can lead to big increases in rents.”

He added: “But we haven't really seen this level of price growth heading into a downturn. So, whether there's the room within budgets to be able to absorb that is a big unknown.”

Anthony Breach, senior analyst at the Centre for Cities, said that buy-to-let landlords will struggle to pass on increased mortgage payments to their tenants, which could constrain supply yet further.

“If you find yourself in a situation where interest rates are going up, then you're pressured to exit the market, which will quickly cut those [rising mortgage] costs,” he said.

Ultimately, what is needed to reduce the upwards pressure on rents is more housing.

In their manifesto, the Conservatives pledged to “continue to increase the number of homes being built” with an emphasis on rebalancing the market towards more homeownership.

But Sky News analysis found that there is still a long way to go when it comes to house building. In the decade to 2021, the population grew faster or at the same pace as the number of homes in 150 out of 309 local authorities.

Given the shortage of homes, even expanding the housing stock in line with population growth is not enough in many areas.


——————–Advertisement————————


Moreover, Mr Breach said that the shift in policy towards supporting homeownership has been highly damaging for the rental market.

“The cumulative impact of extended support for homeownership, while not fixing that supply problem, is eventually the rental sector is going to get squeezed,” he said.

“Because the supply of space is so tightly constrained by the rationing of new homes caused by the planning system, there is a very sharp trade-off between helping people get on the housing ladder and decreasing rents.”

By Amy Borrett

 

UK mortgages rates to rise further: ‘next 10 days crucial’ as to how high

(qlmbusinessnews.com via theguardian.com – – Tue, 27th Sept 2022) London, Uk – –

Building society chief responds as stock market falls and pound slides after Kwarteng’s mini-budget.

Mortgage rates in the UK will rise further in coming days, and the next 10 days in financial markets will be crucial in determining how high they will go, according to the head of Principality building society.


——————–Advertisement————————


Experts are predicting that a typical two-year fix, which has cost borrowers £850 a month, could go up to almost £1,500 a month, after Kwasi Kwarteng’s mini-budget on Friday shocked markets and sent the pound plunging, as well as triggering a government bond sell-off. Sterling hit a record low of about $1.035 on Monday morning and has recovered slightly to $1.08, but is still down 7% this month.

Julie-Ann Haines, the chief executive of the building society, which has 500,000 members, said: “This £6,000-a-year difference [in mortgage costs] is really dependent on whether the markets over the next two weeks continue to think that the Bank of England base rate will get to 6%.”

The pound’s slide, which makes crude oil, priced in dollars, and imported goods more expensive, threatens to push UK inflation, already at 9.9%, even higher and is expected to force the Bank of England to raise interest rates to 5% or 6% by next summer. It lifted its base rate by a half a percentage point to 2.25% the day before the mini-budget.

Haines told BBC Radio 4’s Today programme: “What we do know is over 2022 we’ve seen very significant increases. Even so far, what we’ve seen passed on in mortgage rates is resulting in about an extra £3,000 to £4,000 a year for an average £250,000 mortgage. What the markets do in the next 10 days is really quite important in determining how big the impact is.”

UK government bonds, known as gilts, are on track for their worst month on record, going back to the 1950s. The sell-off has pushed the cost of borrowing for 10 years up to 4.1%, from 3.1% before the mini-budget. The slump in gilt prices has forced several mortgage providers, including Virgin Money and Skipton building society, to pull deals.


——————–Advertisement————————


Haines said Principality had a “a slightly smaller range than normal” and, as a small lender, was affected by others pulling mortgage deals, but that the mutual was working hard to help customers. She stressed that building societies and other lenders needed to be able to make a margin to survive as businesses.

“We no doubt see [mortgage] rates increase over the next 10 days,” she said. “If we can start to get a grip on what’s happening in the markets through building confidence from the Bank of England and the government then you are hoping that mortgage lenders will come back into the market.”

By Julia Kollewe

 

J Sainsbury in talks to offload prime retail sites to London-listed real estate investor for about £500m

 

(qlmbusinessnews.com via news.sky.com– Wed, 21st Sept 2022) London, Uk – –

J Sainsbury, the supermarket chain, is in advanced talks to offload a portfolio of prime retail sites to a London-listed real estate investor for about £500m.

Sky News has learnt that LXi REIT, which has a market value of about £2.5bn, is close to agreeing a deal to acquire the freeholds to nearly 20 Sainsbury's stores, which the grocer then intends to lease back.


——————–Advertisement————————


A property industry source said on Tuesday evening that LXi was likely to seek to raise hundreds of millions of pounds in equity to fund the acquisition, with part of the consideration also including an unspecified amount of debt.

If confirmed, the deal would come months after it emerged that Sainsbury's was exploring a sale of the portfolio.

A number of other parties are said to have expressed an interest in acquiring it.

Supermarket groups are under pressure from investors to improve the efficiency of their balance sheets, with both Asda and Wm Morrison having been acquired by new owners in the past two years.

LXi REIT has been active this year, agreeing a takeover of peer Secure Income REIT several months ago.


——————–Advertisement————————


Among the prominent assets it owns are properties which form part of Merlin Entertainment, the group behind the Alton Towers, Legoland and Thorpe Park theme parks.

It invests in commercial real estate assets which benefit from long leases, typically lasting decades, and is a member of the FTSE-250 index.

LXI and Sainsbury's both declined to comment.

 

China’s largest real estate developer, Country Garden, profits drop 96%

(qlmbusinessnews.com via theguardian.com – – Tue, 30th Aug 2022) London, Uk – –

The company blames the ‘severe depression’ in the property market and says ‘only the fittest will survive’

China’s biggest property developer Country Garden Holdings has reported a 96% drop in profits, blaming a “severe depression” in the country’s crisi-hit property market in which “only the fittest can survive”.

The company, which is listed in Hong Kong, said preliminary net profit collapsed from 15bn yuan ($2bn) to 612m yuan ($88m) in the first six months of the year thanks to the housing market crisis that is slowly engulfing the Chinese economy.


——————–Advertisement————————


Country Garden, which boasts thousands of property projects and a footprint in nearly 300 municipalities, has seen its shares plunge more than 70% this year and the stock dropped another 2.3% on Tuesday to stand at HK$2.54.

It had warned earlier that profits could fall up to 70% and the even bigger than expected drop came with a grim warning in a statement to the Hong Kong stock market.

“In 2022, the property sector faced myriad challenges, including the market’s weakening expectations, sluggish demand and a fall in property prices,” the company said.

“All these exert mounting pressure on all participants in the property market, which has slid rapidly into severe depression. The harsh business environment in which only the fittest can survive means even higher requirements for businesses’ competitive strength.”

China’s property crisis began to rear its head nearly a year ago when the second biggest developer, Evergrande, said that it might not be able to meet repayments on the offshore, dollar-denominated part of its massive $300bn debt mountain.

At the time, market watchers believed that companies such as Country Garden – which did not have such high borrowings – would not be tainted by the problems.

But the debt contagion has spread from Evergrande throughout the enormous $60tr Chinese property market, bringing a 40% drop in sales, falling prices, and a mortgage strike by homeowners angered by the non-completion of homes for which they have paid upfront.

The bleak outlook has been compounded by the zero-Covid lockdowns that have strangled economic activity all over China in the past 12 months, and Country Garden also blamed the recent extreme weather for upsetting profits.

The company’s problems have also seen its majority shareholder – Yang Huiyan, daughter of the founder – lose half her $24bn fortune.

However, the company still managed to strike an optimistic note and said there was hope for an upturn in fortunes because urbanisation of the population was still progressing.


——————–Advertisement————————


“China’s economy has proven resilient and its strong fundamentals for long-term development remain intact,” ti said. “The country’s new type of urbanization still has a long way to go and the desire for a good life will always remain dear to people’s hearts. The real estate industry will always exist.”

“We will persevere and remain hopeful despite adversity. Country Garden keeps its feet on the ground as it works hard to get through a harsh winter and anticipates the arrival of spring.”

By Martin Farrer

Why Rent in New York City is Out of Control Right Now

Source: CNBC

Rents in New York City are at an all-time high. The median asking rent in Manhattan reached $4,100 in June 2022. CNBC Make It spoke to three New Yorkers whose rents increased up to $2,100 a month. But are New Yorkers willing to pay up? One challenge for renters is the requirement that they earn 40 times the rent when applying for an apartment. With the median asking rent in Manhattan around $4,000, that means the minimum income to qualify for an apartment at that price is $160,000. The median household income in New York City is $67,000.

The 10 Industries Minting The Most Billionaires in 2022


Source: Forbes

The 2,668 billionaires on Forbes’ 2022 World’s Billionaires list have established their fortunes in all sorts of ways: building pet food and soy sauce brands, mining copper and zinc, making eyeglasses, developing real estate empires. Some created new riches, some inherited old ones. But many on the list have something in common: They made their fortunes in the world of finance–or inherited such wealth. These are the industries that mint the most billionaires in 2022 as well as the richest person in each sector.

How Transport for London intends to construct 20,000 additional homes

(qlmbusinessnews.com via theguardian.com – – Thur, 18th Aug 2022) London, Uk – –

Taylor Wimpey, homebuilder, provides employees with a £1,000 cost-of-living bonus.

(qlmbusinessnews.com via news.sky.com– Wed, 3rd Aug 2022) London, Uk – –

Rival housebuilder Barratt, Lloyds, Rolls-Royce, and HSBC are also among the big companies to have given workers bonuses to help them handle rising living costs.

Housebuilder Taylor Wimpey will give most of its employees £1,000 on top of their salaries to help them cope with rising fuel costs this winter.

The payments will be given to workers on salaries of up to £70,000, meaning that about 90% of the workforce is eligible.


——————–Advertisement————————


Money will be paid in monthly instalments from September to February.

It comes as UK households grapple with 9.4% inflation, rising food and energy costs, high fuel costs, and an increase in national insurance and council tax.

Taylor Wimpey said: “We have been closely monitoring the impact of rising inflation and the predicted increase in fuel bills this winter on the cost of living for our employees.”

The group said it has been reviewing wages to “ensure competitive levels of pay, alongside our excellent benefits package”.

It comes after rival Barratt announced a £1,000 cost-of-living bonus for 6,000 staff below senior management level, following a 5% pay rise from July to 1 April.

Lloyds, Rolls-Royce, and HSBC are also among the big companies to have given workers bonuses to help them cope with the rising cost of living.

Nationwide: House prices continue to rise – up for the 12th month in a row
Inflation at 40-year high of 9.4% as cost of living crisis mounts

Also on Wednesday, Taylor Wimpey announced a 16.3% rise in pre-tax profits to £334.5m for the six months to the end of June.


——————–Advertisement————————



Like many businesses, the firm's costs have increased due to the higher cost of materials, but it said this was fully offset by house price growth.

It expects property prices to increase 4% to 5% year-on-year.

Nationwide Building Society data on Tuesday showed that annual UK house price growth was up slightly in July to 11%, compared with 10.7% in June, although it is expected to slow in the months ahead.

15 Ways to Create Generational Wealth

Source: Alux

This Alux video we will be answering the following questions:

How to build generational wealth? What is generational wealth? How to become generationally wealthy? How to build multi-generational wealth? How to create wealth that lasts multiple generations? How does one create multiple-generation wealth? How to make sure your kids are rich? How to create wealth for your grandkids? What is the best generational wealth documentary? What is the best generational wealth motivational video?

Embattled property giant Evergrande faces deadline after bosses quit

(qlmbusinessnews.com via bbc.co.uk – – Mon, 25th July 2022) London, Uk – –

Embattled Chinese real estate giant Evergrande is expected to deliver a preliminary restructuring plan this week, following the exit of two bosses.

The firm says its chief executive and finance head have resigned, after an internal probe found that they misused around $2bn (£1.7bn) in loans.

Evergrande has more than $300bn in liabilities and defaulted on its debts late last year.


——————–Advertisement————————


The crisis has spooked traders who fear contagion in China's property sector.

On Friday, Evergrande said it found that chief executive Xia Haijun and chief financial officer Pan Darong were involved in diverting 13.4bn yuan ($2bn; £1.7bn) in loans secured by its property services unit to the wider group.

The firm said in a filing to the Hong Kong Stock Exchange that Mr Xia and Mr Pan had resigned because of their “involvement in the arrangement of the pledges”.

In a separate statement, it said the funds “were transferred and diverted back to the group via third parties and were used for the general operations of the group”.

Evergrande added that it was in talks with its property services unit over a repayment plan.

A $2.6bn deal to sell a majority stake in the unit to a rival developer fell through in October.

Evergrande, which is the world's most indebted property developer, had been struggling to make payments on its over $300bn of liabilities and missed a crucial repayment deadline on its offshore debt in December.

Its shares have fallen by more than 75% over the last year in Hong Kong and have been suspended from trading for months.

The company is scheduled to announce a preliminary plan to restructure its debts before next week.

China's property crisis is estimated to have wiped more than a trillion dollars off the value of the sector last year.

The very serious potential fallout from Evergrande collapsing has led some analysts to suggest that Beijing may step in.

On Monday, Japanese banking giant Nomura said “an increasing number of developers have failed to repay their debt and continue their construction works” since the Evergrande crisis.

Also on Monday, it was reported that China was planning to start a real estate fund to support more than a dozen property developers, including Evergrande.

The fund could be worth up to 300bn yuan, according to reports.

Home sales in China have fallen for 11 consecutive months, official data shows. That is the longest slump since China created a private property market in the late 1990s.

Several Chinese developers have halted the construction of homes that had already been sold, because of concerns over cash flow.

In recent weeks, some home buyers have threatened to stop paying their mortgages until the work restarts.


——————–Advertisement————————


More than 200 projects by at least 80 developers have been affected, according to the Shanghai-based E-house China Research and Development Institution.

The China Banking and Insurance Regulatory Commission has pledged to help local governments in “guaranteeing the delivery of homes,” state media reported.

 

Airbnb permanently bans parties and events around the world

(qlmbusinessnews.com via bbc.co.uk – – Wed, 29th June 2022) London, Uk – –

Airbnb has permanently banned parties and events at homes on its platform, after a temporary measure during the pandemic proved popular with hosts.

The firm says the rule has become “much more than a public health measure” since it was introduced in August 2020.

“It developed into a bedrock community policy to support our hosts and their neighbours,” the San Francisco-headquartered firm said.

However, it also removed a limit on how many people can stay at homes.

Airbnb said in a statement that the number of complaints about parties dropped by 44% since the measure was first introduced.


——————–Advertisement————————


Exceptions to the global ban may be made for “specialty and traditional hospitality venues” in the future, it added.

Airbnb also said it would remove a limit on the number of people its listings are allowed to accommodate at any one time.

It previously imposed a 16 person limit to occupants because of concerns over the spread of Covid-19.

The firm said “several types of larger homes are capable of comfortably and safely housing more than 16 people – from castles in Europe to vineyards in the US to large beachfront villas in the Caribbean”.

“Removing this cap is meant to allow those hosts to responsibly utilise the space in their homes while still complying with our ban on disruptive parties,” it said.

The company started putting restrictions on parties in 2019. It banned “open-invite” parties and so-called “chronic party houses” that were a nuisance to neighbours.

During the pandemic, Airbnb introduced an indefinite ban on parties “in the best interest of public health”.


——————–Advertisement————————


More than 6,600 guests had also been suspended from using the platform last year for breaking the rules.

“This new and long-term policy was enacted to help encourage and support community safety,” Airbnb said.

“We look forward to sharing updates in the coming weeks and months on our efforts to complement our community policies on parties,” it added.

By Annabelle Liang

UK mortgage lenders to drop affordability rules for buyers

(qlmbusinessnews.com via theguardian.com – – Tue, 21st June 2022) London, Uk – –

Bank of England feels other measures will play stronger role in guarding against household debt

Lenders will no longer have to check whether homeowners could afford mortgage payments at higher interest rates after the Bank of England ditched a rule originally designed to avoid another 2007-style credit crunch.

The rule, introduced in 2014, was intended to make sure borrowers did not take on more debt than they could afford, and potentially “amplify” an economic downturn and put financial stability at risk.


——————–Advertisement————————


The decision to withdraw the affordability test comes despite the Bank of England having raised interest rates for a fifth time in a row to 1.25% last week as part of efforts to tackle soaring inflation, meaning some mortgage borrowers could be in line for higher repayments.

The Bank of England, which originally consulted on the changes in February, confirmed that it would scrap the affordability test after determining that other rules, including those that cap mortgages based on the income of borrowers, were “likely to play a stronger role” in guarding against an increase in household debt.

The central bank said in a statement that those other rules “ought to deliver the appropriate level of resilience to the UK financial system, but in a simpler, more predictable and more proportionate way”.

Experts said that while some might find the rule changes “baffling” in light of rising interest rates, the risks were relatively low, given the loan-to-income rules would remain in place.

“The timing of today’s announcement that the Bank of England is going to loosen its affordability rules is somewhat baffling and may enrage some who still have the financial crash burned into their memory,” said Gemma Harle, the managing director of Quilter Financial Planning. “With interest rates starting to creep up to meet the damaging impact of inflation and soaring energy and food prices, you would think that people’s ability to afford their mortgage should really be under the spotlight now.”

However, she said: “While it is potentially bad timing for the announcement, the change in the affordability rules may not be as significant as it sounds as the loan to income ‘flow limit’ will not be withdrawn, which has much greater impact on people’s ability to borrow.”

Chris Sykes at the mortgage broker Private Finance added that the change would be positive news for borrowers who may be falling short on other affordability tests put in place by lenders who were taking the cost of living crisis into consideration. “This isn’t a case of the floodgates opening; in fact, whether the changed measures will even give flexibility close to that we saw when rates were 1% is a good question,” he said.


——————–Advertisement————————


“Just because the recommendations change it doesn’t mean that banks will automatically change the way they look at things; they still have a duty of care, have to be seen to be lending responsibly and also have their own internal risk committees that they would need to get any changes by.

“What this will allow is for additional discretions or innovations by lenders. Perhaps it could inspire some lower stress rates for those that need it most with low income but with perfect credit and years of experience paying their rent.”

By Kalyeena Makortoff

Why Californians Are Fleeing To Mexico

Source: CNBC

In 2021, over 360,000 people left California in what many are calling The California Exodus. But a rising number of them are migrating out of the country all together and instead, heading south to Mexico to escape rising housing prices, traffic and expensive healthcare.


——————–Advertisement————————


 

London’s biggest property companies merge to create $6 bln West End powerhouse

(qlmbusinessnews.com via uk.reuters.com — Thur, 16th June 2022) London, UK —

Two of London's biggest property companies agreed to merge on Thursday to create a 5 billion pound ($6 billion) estate with sites in tourist hotspots including Covent Garden, Carnaby Street and Soho that are battling to recover from the pandemic.

Shaftesbury (SHB.L) and Capital & Counties Properties (CAPCC.L) combined property portfolio will comprises about 2.9 million square feet of lettable space in high-profile destinations in London's West End.


——————–Advertisement————————


“The merged business will have an exceptional portfolio, located in popular and busy parts of London's vibrant West End, and an experienced and innovative team drawn from both businesses,” Shaftesbury CEO Brian Bickell said.

London landlords heavily exposed to non-essential retailers and hospitality firms are on a slow recovery path after coronavirus lockdowns.

Under the terms of the all-share deal, Shaftesbury shareholders will get 3.356 new Capital & Counties Properties (Capco) shares for each share held, valuing Shaftesbury at about 1.96 billion pounds ($2.37 billion) including the 25.2% stake Capco already owns.

Reuters calculated the valuation based on Capco's closing price on Wednesday.

For Capco shareholders, the deal is expected to be earnings accretive immediately, while for Shaftesbury shareholders, the merger is expected to be modestly earnings dilutive in the first two years after completion.

Shaftesbury shares fell more than 8% to 534 pence in morning trade, while Capco stock was down 0.1%.

Existing shareholders in Shaftesbury will own 53% of the combined group – Shaftesbury Capital Plc. Capco shareholders will own the rest.


——————–Advertisement————————


The newly created group will be led by Shaftesbury's Jonathan Nicholls as non-executive chairman and Capco's Ian Hawksworth as chief executive.

Shaftesbury CEO Bickell and Capco's Chairman Henry Staunton will retire once the deal is completed.

The combined group will retain Capco's listings on the London Stock Exchange as well as the Johannesburg Stock Exchange.

Reporting by Aby Jose Koilparambil

Homebuilders agree to put £2bn towards fixing unsafe cladding on high rises in England

(qlmbusinessnews.com via theguardian.com – – Wed, 13th April 2022) London, Uk – –

Michael Gove announces deal involving 35 firms but further £3bn still needed to fully address fire safety issues

More than 35 homebuilders have agreed to put £2bn towards fixing unsafe cladding on high-rise buildings in England identified in the aftermath of the Grenfell Tower disaster, Michael Gove, the housing secretary, has said.

——————–Advertisement————————

 

The move had been expected after Gove asked 53 homebuilders to contribute towards fixing buildings they have had a role in developing. More than 35 said they would commit £2bn, but that still leaves a further £3bn needed to address fire safety problems in high-rise buildings across the country.

Gove said the further £3bn would be raised by an extension to the building safety levy, forcing industry to pay for the remedial work on buildings where the developer cannot be traced or forced to pay up. This will be paid by developers applying for building control approval for higher-risk residential buildings in England.

Gove called on companies yet to sign up to the voluntary pledge to do so, saying they would face the consequences if they do not.

The government is introducing new powers that would allow the housing secretary to block those who refuse to make the commitment from building and selling new homes. The proposed laws, announced in February under the building safety bill, are also intended to make sure leaseholders have a cap on the costs of historical building safety defects.

——————–Advertisement————————

 

Gove said: “Today marks a significant step towards protecting innocent leaseholders and ensuring those responsible pay to solve the crisis they helped to cause. I welcome the move by many of the largest developers to do the right thing.

“But this is just the beginning. We will do whatever it takes to hold industry to account, and under our new measures there will be nowhere to hide.”

By Rowena Mason