Posts with tag: property developers

Tesco to Sell 14 Sites to Property Developer

Published On: October 15, 2015 at 5:04 pm

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This morning (Thursday 15th October 2015), Tesco announced that it is selling 14 former supermarket sites to a property developer.

The move suggests that building homes is more profitable than creating shops, especially in some parts of the country.

Additionally, it appears that the supermarket trend of land banking – buying up large sections of land for potential retail development – has come to an end.

Tesco to Sell 14 Sites to Property Developer

Tesco to Sell 14 Sites to Property Developer

It is expected that other supermarkets will follow in Tesco’s footsteps, by releasing land for housing and smaller retail projects. This must be good news to the Government, which is keen to build lots more homes.

Chief Financial Officer of Tesco, Alan Stewart, explains how many homes could be built: “It certainly will be thousands, I think it will depend on council by council, site by site exactly what the development turns out to be.”

It is believed that up to 10,000 homes could be built on the sites Tesco has sold across the South East of England.

Stewart continues: “These sites were all bought because we intended to put a store [in] and then develop residential around them.

“We wanted to ensure that we would work with the communities and the council in order to develop and build housing and the other projects as quickly as possible, and in a way that is sympathetic to the community.”

The 14 sites are part of the 49 locations that Tesco is vacating, announced earlier this year.

The remaining spots remain mostly unsold and derelict, leading to criticism from local MPs, particularly Pat McFadden of Wolverhampton South East, who believes the local community has been let down.

When asked if he sympathises with opponents, Stewart responds: “Of course, and I think it’s in these sort of sites and these communities [that] it’s very difficult. These were difficult decisions we made.

“They weren’t made without a lot of contemplation, a lot of thought, and we’ll do everything we can to try to get the developments that were expected in these areas, developed as quickly as possible.”1

It is unknown whether sites in the north of England will be sold as easily as lucrative spots in the south.

At present, there is no timeline for selling the remaining sites, which are currently unused.

1 http://www.bbc.co.uk/news/business-34537048

Affordable Housing Planning Policy Cancelled

A Government planning policy that could have allowed luxury London landlords to escape over £1 billion a year in affordable housing payments has been cancelled.

Housing Minister Brandon Lewis revealed the vacant building credit at the end of 2014, but councils soon experienced chronic housing shortages.

The credit allowed developers that were planning to convert vacant office buildings into flats to pay only an affordable housing contribution on new space created. Before its introduction, developers paid according to the size of the whole building.

Westminster Council voiced its concerns in January, stating that it could lose £1 billion a year from its affordable housing fund and called the credit “insane”.

On Abu Dhabi Investment Council and Finchatton’s project to redevelop the former US Navy HQ in Mayfair, the Council said that its affordable housing payment fell from £17.6m to just £8.6m.

Affordable Housing Planning Policy Cancelled

Affordable Housing Planning Policy Cancelled

A legal battle by West Berkshire District Council and Reading Borough Council has resulted in a judge ruling that part of the policy was incompatible with the legal structure for planning.

Head of Planning at law firm Mishcon de Reya, Daniel Farrand, says: “This means that councils will be able to once again levy affordable housing requirements on developments in accordance with their own local plan policies.”1 

Brandon Lewis initially launched the plans to boost house building and put vacant properties back into use.

Some raised concerns that developers could kick tenants out of offices to convert them into flats and others would resubmit plans already granted permission to take advantage of the lower affordable housing bill.

The decision to cancel the policy was welcomed by numerous politicians and groups.

Labour Mayor of London candidate, Tessa Jowell, says: “The vacant building credit has done untold damage to London and has now rightly been quashed by the courts.

“This Tory scheme delivered developers a loophole to avoid providing any affordable housing – just when our city needs it most.”1

A Generation Rent spokesperson adds: “This loophole absolved them [developers] of any responsibility to make a contribution to wider society and with the economy booming that is completely unjustifiable.”1

Mark Williams, Southwark’s councillor, believes it was “a deeply unjust policy that could have cost thousands of new affordable homes.”

A spokesperson for Labour Built Environment adds: “This court decision is a victory for common sense and will help generate more affordable homes in London.”1

JR Capital manages money from the Middle East for residential property investors. It says it does not believe the removal of the credit will stop developers investing in London.

The Department for Communities and Local Government says it is “disappointed by the outcome” and will seek permission to appeal against the judge’s decision.

It explains: “We’ve got Britain building and we’re determined to maintain this momentum, including by reducing the red tape and extra costs that prevent smaller developments from getting built.”1

The British Property Federation thinks that affordable housing payments should be set at a local level, rather than by the central government.

1 http://www.independent.co.uk/news/business/news/london-property-insane-planning-policy-that-could-have-saved-luxury-landlords-1b-a-year-quashed-10437270.html

Government Yet to Announce Office-to-Residential Extension

Government Yet to Announce Office-to-Residential Extension

Government Yet to Announce Office-to-Residential Extension

The Government has not yet made a decision regarding the extension of office-to-residential permitted development rights. The current deadline is May 2016.

It was expected that ministers would make an announcement confirming the extension before the House of Commons recess.

The temporary right allows developers to convert offices into homes without the need to apply for planning permission.

The coalition government introduced these rights in May 2013, for three years. An extension until 2020 has been anticipated.

However, several councils have complained that their office stock is at risk.

Chief Executive of the British Property Federation (BPF), Melanie Leech, comments: “Office-to-residential is a useful tool that in most places, although not necessarily all, can breathe life into under-used buildings and help use space much more productively.

“We are currently working with Government to ensure that any extension is applied in a sensible and proportionate way.”1 

1 http://www.propertyindustryeye.com/surprise-as-government-fails-to-announce-extension-of-office-to-residential/

 

 

 

 

 

 

 

 

 

 

 

 

 

Green Belt Land Could Solve the Housing Crisis

Published On: May 26, 2015 at 2:48 pm

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Categories: Landlord News

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It is well known that Britain is only building half the homes needed to resolve the housing crisis. But it is believed that if green belt land is released, an influx of new homes could solve the problem.

House price growth is at its highest since before the recession. The average property is now £273,000 and in London it is almost double, at £498,000.

Founder and Chief Executive of Hill Partnerships – a large house builder in the South East – Andy Hill, says that the crisis will continue if the restrictions on green belt land remain harsh. The controls on these areas were created to protect the countryside.

Hill explains: “Ultimately, if bits of green belt land are released at a time and it’s controlled, it’s not a major issue. Everyone is trying to develop brownfield sites as quickly as we can. We understand they’ve got to take priority, but developing on brownfield sites takes a long time and we need to get the house building numbers up.”

A brownfield site is land that has already been developed, but has the potential to be redeveloped. House builders have snapped up these sites in the last few years, as tight restrictions remain on the green belt.

According to the Government, there is enough brownfield land in England for 2.5m new homes, a large amount in London, where demand is at its highest.

Chancellor George Osborne revealed last year that he would build 200,000 homes on brownfield land by 2020 by placing local development orders on over 90% of sites that are suitable.

Brownfield sites can be expensive, however, as they need to be prepared, unlike undeveloped land.

Hill continues: “Getting planning permission is another hurdle. Gone are the days of being able to buy a piece of land and start developing nine months later. Starting from scratch, it takes about a year to get approval, then up to another 12 months to start on site. It’s amazing and highly frustrating how long it takes to get planning.”

The green belt accounts for 13% of the land area in England, around 1,639,560 hectares (4m acres), while brownfield land makes up just 70,000 hectares, about 100,000 football pitches.

Green Belt Land Could Solve the Housing Crisis

Green Belt Land Could Solve the Housing Crisis

Hill Partnerships is based in Waltham Abbey, Essex, and built over 1,300 homes last year, predominantly in the South East. There are 1,635 in the pipeline this year, with a total sales value predicted at £650m.

In the whole of Britain, 118,770 new homes were built in 2014, found the Department for Communities and Local Government. This is less than half the industry-accepted annual figure for tackling the housing shortage.

The Royal Institution of Chartered Surveyors’ (RICS) latest monthly index revealed that 33% more of its members reported price rises in the UK in April than in March. This is the highest number since August 2014.

Simon Rubinsohn, Chief Economist at RICS, cautions: “Alongside an increased flow of second-hand stock, it is absolutely critical that the new Government focuses on measures to boost the flow of new build [homes].”1

Hill Partnerships saw a £250m turnover in 2014, with a profit of £18m, up 30% on the previous year. The firm has five offices in the South East and employs 350 people. Hill, 56, started the business in 1999 after being a manager of a construction firm.

“We started as a contractor for housing associations and built our first development site in 2003. We got in at just the right time before the house boom of the early 2000s. Since then, the business has grown steadily; about 10% to 30% growth per annum.”

The company built its first major development in 2005, a 137-unit block of flats in Stevenage. Its current projects include a 249-home North West Cambridge development and 237 homes in Barton Park, Oxford.

Four-fifths of its work is outside London, but projects in the capital are mainly in the suburbs. Hill Partnerships has invested in Hackney, Walthamstow and currently is working on a 140-home scheme in Southwark.

Suburbs like Hackney and Walthamstow have become sought-after locations recently.

Property prices in Hackney, once considered rundown, have grown by 800% in the last 30 years. The average flat in Hackney is now £444,391, according to Rightmove. A semi-detached house would cost over £1.1m.

Hill has found that homes in Walthamstow are continuing to increase. In the past three years, prices have risen by about 80%, with the average one-bedroom flat costing £300,000. He is currently selling a two-bed penthouse in the area for £520,000.

Hill explains: “We’ve focused away from zones in central London, which are far more expensive. Areas such as Walthamstow have had terrific growth. The area is high in demand and has become a very popular place to live.”

He also says that the possibility of interest rate rises next year could impact business, as people could become cautious about borrowing money.

However, he says that business is resilient at present, as “there has never been a better time to get a mortgage” and people are fixing good rates for five years.

Hill adds: “The real problem is getting the first time buyers onto the ladder. It’s very, very difficult. Mortgage lenders make them jump through hoops. They’re always looking for reasons why they could fail rather than focusing on helping them succeed. I haven’t seen enough of the Help to Buy Isas to comment on their effectiveness, but the concept is good.”1 

1 http://www.telegraph.co.uk/finance/festival-of-business/11624978/Britains-housing-crisis-should-more-green-belt-land-be-released.html

 

 

Investment Bankers Want Financial Support for Small Builders

Published On: May 26, 2015 at 11:44 am

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Categories: Finance News

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Investment bankers believe that small house builders need more financial support in order to help Britain resolve the housing crisis.

Property finance specialist at London-based corporate adviser and financier Nash Fitzwilliams, Adrian Pritchard, says that tax breaks could be extended to help builders: “Smaller builders are finding it difficult to access equity capital to build. They are good at filling in the gaps to optimise existing housing stock.

“Larger house builders are too big to attack the myriad of smaller opportunities available on a national basis.”

Investment Bankers Want Financial Support for Small Builders

Investment Bankers Want Financial Support for Small Builders

He thinks that tax breaks, like Enterprise Investment Schemes and Venture Capital Trusts, should be applied to building, a sector that is now excluded: “This would go some way to alleviating the current shortage of homes.”1

In the last few years, small house builders have used alternative lenders for backing.

Head of Real Estate at peer-to-peer lender Funding Circle, Luke Jooste, says: “We’ve been inundated with demand from successful property developers looking to increase the supply of housing to the UK population.”1 

Recently, Funding Circle investors lent £5m to Verto Homes, which is creating 21 eco-friendly homes in Newquay, Cornwall.

Close Brothers’ investment banker Stephen Hodges explains: “The number of small and medium-sized builders has halved since 2007. Many high street lenders pulled back from lending to them in the recession and have been slow to return.

“By contrast, we have tripled our lending to the sector since 2007 and are funding more than 500 UK developments. We continue to see good demand from small house builders and are keen to support them as regional markets recover.

“Large, listed builders have better access to finance – via equity or bonds through the markets – and better access to bank loans at good rates.”1 

It is believed that the Treasury is cautious of extending tax breaks to builders, saying that the value of land supports the investment.

A Home Builders Federation spokesperson says: “We would support any scheme that provided finance – whether it is equity or debt that allowed more SMEs [Small and medium-sized enterprises] to build.”1

1 http://www.thisismoney.co.uk/money/mortgageshome/article-3094994/Key-solving-housing-crisis-Giving-smaller-housebuilders-financial-support-investment-bankers-say.html

The Villagers Refusing Millions of Pounds from Developers

Published On: May 26, 2015 at 11:03 am

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In a charming village in West Sussex, residents are putting up a fight. They are refusing millions of pounds from property developers who want to replace the countryside with a new 10,000-home town.

Recently, farmer Robert Worsley turned down £275m for his 550-acre farm in the village of Twineham. Read more about his land battle: /farmer-turns-down-275m-for-his-land/.

Robert is now the face of the campaign group Locals Against Mayfield Building Sprawl (Lambs), which is fighting the proposals. Around 200 landowners are supporting Robert’s struggle, amounting to 4,300 acres.

Other Lambs explain why they do not want to lose their picturesque landscape:

Veronica Brookes, 72, lives at the 200-acre Sakeham Farm near Henfield – noted in the Domesday Book – with her husband Tony Baldwin, 86. They have lived there for 25 years.

She says: “There have been rumours going around for the past two years, maybe longer, that developers wanted our land; this was followed by a visit from one of the Mayfield team.

“Both Tony and I were extremely negative with them from the start; the proposed scheme is totally inappropriate – we live on a flood plain, 50 acres of our holding is brook land [wetland], which is flooded annually by the River Adur.

“At a meeting I attended last year, their ideas about the town appeared ridiculous – they think people would happily go around on golf carts and be bussed in and out of hubs on the A23 to commute to London. It simply wouldn’t work. Who would want to live like that?”

The Villagers Refusing Millions of Pounds from Developers

The Villagers Refusing Millions of Pounds from Developers

Veronica continues: “In total, they came to us about three or four times and offered us about £5m, with the proviso that they would pay us more for an option now than if they got planning permission later, trying to force our hand I suppose.

“Money is important but it’s definitely not everything. Your mode of life is far more important. We have a lovely home; we work extremely hard, Tony still works, and anyway we don’t want to move or see this area of outstanding beauty spoilt for future generations.”1

Pauline and Paul McBride, 32, created the Sussex Prairie Garden near Henfield on the farm where they live with their extended family.

Pauline says: “I just cannot come to terms with the sickening idea that our garden could be bulldozed by developers and all this could be torn up. This garden is our dream: a wild and naturalistic space with big swathes of colour and texture, open to the public. It is a wonderful place.

“We get visited by gardening enthusiasts form all over the world, including coachloads of Russians, as well as British families. And yet we started this beautiful garden from nothing. I was born here on the farm and it was an idyllic childhood, so it was natural to want to come back.

“And now the garden teems with wildlife – insects, birds, mammals and amphibians. Visitors find it restorative. The pleasure and enjoyment everyone gets is immeasurable.

“So although I have sympathy for people needing to live somewhere, thanks to our burgeoning society, and I fully understand there are pressures for councils to find places for people to live, I believe this beautiful Sussex countryside is a sacred haven and we shouldn’t be wantonly destroying it.

“The first time the developers came knocking I sent them straight away – I couldn’t bear the thought of it, even though they were offering us £5m. I had to send them away a couple of times.”

Pauline stresses: “I can’t imagine this garden being destroyed; that would be heart-rending. And I can’t imagine walking away from the people who love it. Why would you? How could we?

“How can I put a price tag on this? It is impossible to think about it. I wouldn’t sell at any price. I hope the developers give up and accept this people power. Paul and I have given our all for this place. I would die if I had to destroy it.”1

Co-director of the All England Jumping Course in Hickstead, Haywards Heath, Edward Bunn, 54, lives in the area with his wife Julia and their four children.

He explains: “We’ve been approached four or five times now by various agents trying to persuade us to let them put an access road across our land from the A23 to the west. They didn’t want to buy any of our 600 acres, but just for that access, which would have cut our land in half – and which would become a public highway if their plans came to fruition – they were happy to offer us £5m or £6m.

“Of course we turned them down. No one around here wants a new market town built on this land. Yes, there is a need for housing in the South East, but Mayfield wants to put it in completely the wrong place.

“Our family came here in 1958 and it is a lovely bit of Sussex countryside, an Area of Outstanding Natural Beauty, with a nice river running through it. This housing would be a blot on the landscape.

“Moreover, it is nowhere near any existing infrastructure, employment or transport. If you look towards Haywards Heath there are towns that could be expanded, and that makes more sense, as that’s where the stations are, that’s where the work is. And no one will object to that at all.

“Instead, Mayfield are chancing their arm by proposing to build here and we’re all living under a cloud as a result. People haven’t been able to sell their homes around here for two years because of this, and everyone from councillors to MPs – as well as locals – is against the idea.

“There’s a lot of feeling in the area against Mayfield’s town, and Lambs will fight tirelessly to stop it.”1

Freelance radio journalist Jane Watson, 51, lives in Twineham with her husband Richard, 52, and their three children.

She says: “Villagers like us haven’t been offered huge pay-offs, but our homes and the beautiful countryside around us have been left under a huge Mayfield cloud, which shows no signs of dissipating despite universal local opposition.

“This is the kind of rural community that is becoming rarer and rarer in the South East of England and it should be valued, not destroyed. But apparently it doesn’t matter what we think.

“Even though every level of local government – from parish to district councils, and both local MPs, Sir Nicholas Soames and Nick Herbert – have objected to the scheme, the developers don’t seem to accept it won’t succeed. Even the official government planning inspector has turned down the housing development. But local democracy has been turned on its head in Sussex.”1

1 http://www.telegraph.co.uk/news/earth/countryside/11618126/The-great-rural-fightback-meet-the-villagers-turning-down-millions-from-developers.html