The regular weekly property roundup I get sent has just arrived...The Wilsons aka 'tycoon' even get a mention!
More bulk opportunities in London as developers look elsewhere
PropertyBrain Friday Roundup 13/01/17
A succinct weekly take on the London property market and a roundup of headlines from the PropertyBrain team. Subscribe to the Friday Roundup here: http://pbra.in/1Gli7UL
Here's a roundup of what we think are the big news stories this week:
Berkeley has opened a new division in Birmingham - its first venture outside the South-East in more than a decade - as London's luxury home market wanes. This was in line with their recent land purchases of sites in outer London and the home counties, rather than inner London. However, Berkeley was quick to reiterate that this did not represent a reduction of its business in London and the south-east.The company has also said that it will focus on modular construction, also known as prefabrication, a process where a house can be largely built off-site and then completed on site within 14 weeks.
The UK's largest housebuilder, Barratt Developments, has reported a drop in home completions in the second half of 2016. It completed 6% fewer houses and apartments than a year earlier at 7,180, while it has also begun selling off London homes in bulk to investors to help mitigate a drop in demand. Despite price cuts in the capital, Barratt is reported to be on track to meet targets of "modest" growth in volumes for the full year, signalling a 7% year-on-year increase in pre-tax profits.
Shares in the estate agency Savills rose almost 10 per cent on Thursday after the group said overseas investment in UK real estate had helped it beat expectations for 2016. It had gained market share in commercial investment transactions in the UK, "primarily as a result of the post-referendum interest emanating from overseas".Its UK homes division performed better than anticipated as well, partly due to international buyers drawn to UK housing by currency shifts. Savills is now trading close to their pre-referendum levels after a 30% drop previously.
There was mixed news at Foxtons however, with a trading update highlighting the drop in profits for the group. Annual profit is expected to halve as a result of a slowdown in the London property market, as average prices across London and transaction volumes dropped over the year. Foxtons' letting business, which accounts for more than half of revenue, may be affected by a proposed ban on charging letting fees to tenants, as announced in the recent Autumn Statement. Foxtonsexpects trading conditions to remain challenging in 2017.
Mayor of London, Sadiq Khan has intervened in two high-rise housing projects in Tottenham Hale and Harrow after local authorities refused planning permission. Sadiq Khan has the power to "call in" such decisions and overrule local councils, in order to address the housing shortage in London. According to government statistics, it is estimated that at least 50,000 a year are needed to house the rising population.
The Financial Times reported that UK insurers, pension funds and trusts controlling £4tn of assets have pulled more than £31bn from equities and bonds in the 12 months to the end of September, marking the heaviest withdrawals from asset markets since 1987. Alternative investments, such as private equity and property are poised to benefit in the current environment as investors seek to "harvest the illiquidity premium of alternatives".
A property tycoon in the UK has sparked a backlash by setting out a list of 11 rules for people who would not be able to rent out one of his 700 properties from 2017, including no single mums or dads, single adults or smokers. He also banned "battered wives" and tenants with children under 18. He ended off with: "Not all tenants on Benefits are a Problem, but all problems are on benefits".