Category Archives: London

Ealing Council Award £65m Regeneration Project to Grenfell Tower Contractor

Ealing

Ealing Council approved the award of a large contract to Rydon, the main contractor on the Grenfell Tower development, weeks before the fire broke out.

According to Construction News, Ealing’s main cabinet approved Rydon as the development partner for the £65 million project to build 296 new housing units to replace the High Lane Estate in Hanwell.

The Council authorised the executive director of Regeneration and Housing to finalise the contract with Rydon at a meeting on 25 April. The minutes of the April meeting state that Rydon’s bid was the most “economically advantageous” of the three tenders, with a “very strong financial offer coupled with excellent construction delivery and programming”.

The deal will see the contractor finance, develop and submit a planning application for the new development, before demolishing the existing estate and replacing it with mixed-tenure housing, the majority of which will be affordable.

Rydon was the main contractor on last summer’s £8.7 upgrade of the Grenfell Tower in Kensington. To date 79 people are reported dead or missing following the fire last week and the exact cause of the fire has yet to be determined.

Rydon has insisted all its work on the refurbishment met all required building control, fire regulation and health and safety standards.

According to Construction News, although Rydon was selected as the preferred development partner for the Ealing project, no deal has yet been signed.

The latest High Lane Estates contract would be the second development partner deal between Rydon and Ealing Council on a major regeneration, after Rydon’s 50:50 joint venture with A2Dominion Regeneration won the £155m revamp of Green Man Lane Estate.

The government confirmed yesterday it had ordered councils and social housing providers to urgently check whether any panels on their new-build or refurbished buildings are clad with aluminium composite material (ACM), which is believed to have been installed at Grenfell Tower.

The Renters Alliance helps renters with bad landlords and letting agents. If you have a story you would like to share, please contact the National Renters Alliance through our website or email us at contact@nralliance.co.uk

Share this article

London landlords deserting capital in search of higher profits following sixth month of rent falls

for_saleBuy-to-let landlords are buying more properties outside London following the 6th consecutive month of rent falls in the capital according to the UK’s largest estate agent, Countrywide.

Fifty-per-cent of London buy-to-let landlords are looking to buy properties outside London this year according to Countrywide’s new figures. In 2016, London landlords purchased over 22,000 homes outside of the capital – a seven-fold increase on the 3,311 recorded in 2010 when Countrywide first began keeping records.

In April, just 12 per cent of London homes were sold to buy-to-let landlords which is close to a record low.

Countrywide says that London landlords are increasingly looking to northern England for buy-to-let properties with Liverpool becoming a particular hot-spot in the buy-to-let sector.

Landlords looking further afield hope to benefit from better yields and lower stamp duty. Average stamp duty currently stands at £40,000 in the capital which falls to £6,300 outside of London.

Around 9 per cent of buy-to-let properties in the north were sold to London landlords and 26 per cent of London landlords picked up property in the East of England.

Johnny Morris, Countrywide’s research director, said: “In response to slower price growth and government tax hikes, London landlords are looking further than ever to find a return.

“Lower entry costs and higher yields outside of the capital are enticing investors to look further afield than they have previously.

“Rental growth remains low across Great Britain. Mostly driven by London where rents have fallen for the sixth consecutive month.

“The repercussions of the stamp duty rush are still playing out in the rental market as stock levels continue to remain high.

“But with fewer investors buying in the capital we will likely see stock levels fall, driving future rental growth.”

The Renters Alliance helps renters with bad landlords and letting agents. If you have a story you would like to share, please contact the National Renters Alliance through our website or email us at contact@nralliance.co.uk

Share this article

The billions of corrupt wealth fuelling London’s housing crisis

money laundering london housing

Around £4.2bn of suspicious money is believed to be laundered through the London property market. 

The report produced by the London-based anti-corruption organization Transparency International claims that the purchase of luxury properties by corrupt individuals is also exacerbating the housing crisis by driving up prices in the rest of the city.

High property prices in the capital are also believed to facilitate large-scale money laundering operations by allowing greater sums to be transferred from overseas jurisdictions.

While there are multiple causes of London’s housing crisis, Transparency International claims to have found evidence that overseas corruption and the purchase of luxury London properties is playing a ‘significant contributory role’.

The findings are based on an analysis of Land Registry data for 14 landmark luxury developments, consisting of 2,066 future homes.

The report published this month follows a highly publicized announcement in December by London’s mayor, Sadiq Khan, of an investigation into the role played by foreign property buyers in London’s housing crisis.

Transparency International claims up to 80 per cent of properties in luxury developments are bought by overseas investors. Around 40 per cent are sold to individuals from high corruption risk jurisdictions. Much of the remainder are bought by ‘anonymous’ companies registered in the UK’s Overseas Territories and Crown Dependencies.

London is an obvious destination for much of this money. Luxurious properties in the capital are in very high demand internationally. London prime real estate is renowned around the world as a symbol of wealth and respectability. The UK is also known as a safe-haven for corrupt individuals worldwide due to its political stability and robust legal system.

Money launderers can easily create offshore companies to hold wealth and assets and provide secrecy for the beneficial owners.

Transparency International claims that over 75% of the UK properties under criminal investigation for grand corruption use offshore corporate secrecy. For all criminal investigations analysed, every property that made use of a foreign company to hold property used a company from an offshore secrecy jurisdiction, rather than a major economy.

The organisation is now calling on the government to implement a public beneficial ownership register of overseas companies that own UK land titles. The creation of such a register was originally announced after the May 2016 Global Anti-Corruption Summit.

Poor International Enforcement

Transparancy International’s report comes following  the Public Accounts Committee’s admission that the UK performs poorly in tackling money laundering.

In 2013 only 26p out of every £100 of identified criminal gains was confiscated.  While the estimated loss to the economy through fraud last year stood at £52bn, enforcement agencies collected just £133m. According to the National Audit Office recovery of the money cost taxpayers an estimated £102m in administration costs.

The picture is similar internationally. In 2012 the UN Office on Drugs and Crime estimated that typical law enforcement detection levels for money laundering stand at around one per cent.

Reporting of suspicious activity in the property sector is particularly poor. Between October 2013 and September 2014, estate agents contributed to only 0.05% of all Suspicious Activity Reports (SARs).

As of July 2014, across the England and Wales, at least £122bn worth of property was held by companies registered in secrecy jurisdictions. Out of 91,248 foreign company-owned properties in England and Wales, nearly two thirds are held via the British Virgin Islands and Channel Island structures.

The Renters Alliance helps renters with bad landlords and letting agents. If you have a story you would like to share, please contact the National Renters Alliance through our website or email us at contact@nralliance.co.uk

Share this article

Seven disgraceful statistics about renting in London

Rent Costs London

1. London Renters spend 60% wages on rent

The English Housing Survey reports that Londoners spend an eye-watering 60% of their gross earnings on rent. Excluding housing benefit this figure rises to 72%.

Even more shockingly, 16-24-year-olds are forced to pay 88% of their income on rent in the capital. When housing benefit is included this falls to 81%. However this age group is particularly vulnerable to reductions in housing benefit.

2. It is cheaper to commute from Madrid each day than rent in Camden Town

Renting a flat in Camden Town and working in Liverpool street will cost a Londoner £2,128 monthly or £25,532 yearly.

If the same Londoner rented a flat in Madrid’s city centre and booked return flights from Madrid to Stansted from Monday to Thursday, he or she would spend £1,725 a month or £20,708 a year.

3. The average rent on a two-bedroom flat is £707 a week or £100 a day  

Figures from property investment firm London Central Portfolio (LCP) show that the average rent on a two-bedroom flat in central London is a whopping £707 a week.

Average rental prices of rooms in a flat-share in Paddington (Zone 1), can cost around £1100 a month.

Council taxes are also a significant  consideration. Areas like Richmond and Kingston tend to be the most expensive at around £1929 a year.  Cheaper areas include Wandsworth where council tax averages £823 a year.

4. London professionals are being forced to live “12 to a house”

According to Ealing Central and Acton MP Rupa Huq, London professionals are being forced to live “12 to a house”, thanks to the soaring rents.

In a House of Commons debate Huq said: “Renting is no longer just a transitory thing for those who are in their twenties. It’s becoming routine for people further up the age scale.

“Many in my constituency in their 30s on good money find themselves sometimes 12 to a house with shared sitting room and kitchen.

“At that age, ‘who stole my cheese?’ should not be a way of life.”

5. By 2025, more than half of people under 40 will be living in property owned by private landlords

Over half of 20 to 39-year-olds will be renting from private landlords by 2025, according to accountancy firm Price Waterhouse Coopers.

PwC economists state that: “For 20-39 year olds, we would expect over half to be renting by 2025, implying a continuing rise in the size of ‘Generation Rent’.

The report suggests that home ownership levels will continue declining to dramatic new levels, dropping below 60% by 2025, as the rise of ‘tenant nation’ looms.

6. The UK has the highest private rents in Europe

A study by British Housing Federation found that rents in the UK are the highest in Europe.

In countries like Germany and Holland, private rents are around 50% cheaper than in the UK.

David Orr, chief executive at the National Housing Federation, said: “British renters get a raw deal in comparison to their continental counterparts. Not only do they face crippling rents, but renters in the UK have almost no certainty about whether they will be able to stay in their home from one year to the next.”

7. One in three rented homes are “not fit to live in”

One in three British three homes do not meet the government’s decent home minimum standard, according to 2014/15 English Housing Survey.

A Parliament report published last year admitted that there have been no minimum property standards for private rented housing in England since 2006.

Furthermore, more than 170 tenants are being evicted every day according to 2015 Ministry of Justice figures.  In total 42,728 evictions recorded in England and Wales in 2015.

According to Gillian Guy, CEO of Citizens Advice, “It’s hard to feel at home in the private rented sector. People can struggle to lead a normal life when their home is in a state of disrepair and they could be told to leave at any time. But many feel powerless to speak out.”

The Renters Alliance helps renters with bad landlords and letting agents. If you have a story you would like to share, please contact the National Renters Alliance through our website or email us at contact@nralliance.co.uk

Share this article

Central London House Prices Underperform the Rest of the UK Falling the Most in Six Years

London price decline

House prices in London posted their largest yearly fall in almost six years in February according to the property website Rightmove. The figures represent the first annual decline in London house prices since April 2011.  It is believed that high asking prices and fears over Brexit have been putting off buyers.

While February asking prices are up compared with January, the 2.6 per cent increase is the weakest monthly gain for a February since 2009 during the height of global financial crisis.

Across the capital, house prices fell by 0.4 per cent compared with last year with the average property in London now costing  £641,116. Reversing the trend of a stronger performance compared with the rest of the UK, the London housing market under-performed the rest of the country during 2016. The latest sign of housing market weakness continues the trend set in the second half of last year. In addition to Brexit fears, tax increases on investors in the early part of the year have been suggested as factors in reducing demand for prime London real estate.

Nationally annual house price growth slowed to the weakest in almost four years this February with average property asking prices rising 2 per cent to £306,231. This represents the weakest February property performance since 2009 well below the 5 percent average gain for the month over the past seven years.

The picture across London as a whole is more mixed. Central London led the price slowdown with asking prices falling 2.1 per cent compared with February a year earlier whereas  Outer London suburbs registered a price increase of 1.4 per cent. However, comparing the relative performance between January and February, inner boroughs outperformed as owners of more expensive homes boosted the average by listing their properties for sale after the Christmas break.

Continued

Sign up to the Renters Alliance newsletter

Rightmove claims that potential buyers may also have become price-sensitive as inflation erodes real incomes. The company’s director miles Shipside added: “Perhaps we’re approaching the territory where many buyers are unable or unwilling to pay what sellers are asking, given the negative combination of rises in the cost of living, tighter lending criteria, and a dose of Brexit uncertainty. Values have boomed since 2013, so it’s not surprising that upwards price pressure is running on tired legs.” 

Share this article

London house prices predicted to fall 5% in 2017

London House Prices Predicted to Fall 5 per cent

Property prices in central London are expected to fall by 5 per cent in 2017 according to property data firm Rightmove.

The situation across London as a whole however was mixed with a significant variations between market conditions in prime central London and peripheral areas.  Outer London property prices are expected to see an approximate 3% increase in prices in 2017 Rightmove suggests with prices across England and Wales expected to rise by two per cent as a whole next year.

Brexit uncertainty continues to be a serious issue  with respect to property price forecasting. As yet the government’s desired outcomes and the negotiating position it will adopt following the triggering of  Article 50 to begin the two year countdown to leave the European Union remains unknown. Prime Minister Theresa May says she is committed to triggering the start of formal Brexit negotiations by the end of March next year and is expected to make announcements on the Government’s preferred future relationship with the EU in the New Year.

The disconnect between property prices in central London and the rest of the UK may be symptomatic of London’s traditional early reaction to changes in the British economy. During the 2007 global financial crisis and subsequent recession, prime London properties were the first affected by the downturn but were also the fastest to recover.

To date predicted negative economic data following the UK’s decision to leave the EU have failed to materialize. The British Chambers of Commerce revised up its forecast for economic growth next year but downgraded the outlook for 2018 due to inflation pressures and ongoing economic uncertainty about Britain’s future trading relationships with the EU. In terms of GDP forecasts, the Chambers revised upwards UK GDP growth forecast to 1.1% from 1% for 2017 after stronger-than-expected economic performance following the June Brexit vote.

Share this article

Sadiq Khan asks LSE to investigate London housing market

sadiq_khan

London mayor, Sadiq Khan, has asked the London School of Economics to carry out a comprehensive inquiry into the impact of foreign investment on London’s housing market.

The inquiry which is expected to report back to the Mayor in the spring will investigate the dependence of property developers on foreign buyers and the number of properties kept empty.

Sadiq Khan is keen however to stress that the report is not intended to provide material which might be used to curtail the rights of overseas buyers in London.  Announcing the study, the Mayor underlined the importance of foreign investment in London but also noted that further study was needed to understand the connection between London’s property affordability crisis and foreign investment. The Mayor added that many Londoners were concerned about the number of homes left empty and the link between empty properties and overseas investors.

The current study follows numerous reports that London is being used as a safe-haven for Russian Oligarchs, Chinese Princelings and Middle Eastern Sheikhs.  Many properties in the capital are held by companies in offshore tax havens and many are unoccupied. Khan’s predecessor in City Hall, Boris Johnson, notably called for property developers to market new homes “first or equal first” to Londoners rather than to overseas buyers.

Share this article

House Prices in Chelsea fall 9.8% annually in September

London House Prices Fall

House prices in Chelsea have fallen by 9.8 per cent annually with prices for high-end homes in central London falling by 2.6 per cent in September.

Property consultants Knight Frank claims that changes in stamp duty rather than the effects of the Brexit vote in the EU referendum is the main factor for the house price decline. The firm also claims that the Brexit vote may have been “a catalyst for overdue price reductions” in the sector.

Overall the picture across London as a whole has been mixed. Some parts of prime north London have seen price falls of 7.5 for Hyde Park and 5.3 per cent for Notting Hill.  Islington on the other hand witnessed an increase in prices by 3.6 per cent. In the high-end rental sector the picture has been similarly varied with rental values for prime central London properties falling by 4.7 per cent on an annual basis with rent falls of 9.9 per cent in Marylebone and 8.3 per cent in Chelsea.

Properties are also spending more time on the market with the average number of days taken for a property to sell increasing by 14 per cent between January and August compared with the same period last year.

There are also advantages for renters in the capital with rental values also falling for high-end homes. In September, rental values for prime central London fell by 4.7 per cent on an annualized measure.

Chelsea and Marylebone notably saw rents falling by 8.3 per cent and 9.9 per cent annually.  The picture for areas further out was quite different with Areas further out saw less dramatic rent falls with King’s Cross and the City Fringe seeing average rents rise by 1.9 per cent and one per cent respectively.

Share this article

More than 26% of London homes are now rented privately

london-housing

The private rented sector in London has grown from 17% of all homes to 26% over the last decade according to a London Housing Committee

However despite the rapid growth in private renting in the capital, the rules governing the sector remain largely unchanged since the 1980s. According to the report which represents the view of the majority of the London housing commitee, the Mayor of London should:

  • Stimulate the build to let sector by getting government help for landlords competing to develop land;
  • Set up a London-wide register of landlords to help the boroughs enforce existing legislation and better protect tenants; and
  • Support London’s low-income renters by lobbying government to review the freeze imposed on Local Housing Allowance levels in London until 2020.

In addition to its consumer protection role, the National Renters Alliance is always open to ideas to present to government. If you have any suggestions to better protect and improve the situation of renting in London and across the rest of the United Kingdom please send us our thoughts.

 

Share this article