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Investment Bankers Want Financial Support for Small Builders

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

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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

Most expensive seaside towns revealed

Published On: May 26, 2015 at 11:38 am

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Categories: Property News

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A new investigation from the Halifax has looked into property prices in 196 seaside regions of the UK.

Results from the survey show that average property values within seaside towns have risen by almost a third during the last decade, rising from 159,522 to £208,729.[1]

Regional divide

The report has suggested that Salcombe in Devon boasts the highest property prices, averaging £672,874. Home to a number of celebrities, including Sir Michael Parkinson, the average house price within the town has risen by 9% from £615,344 during the last year.[2]

Sandbanks in Dorset came in second on the list, with properties here averaging £614,726. In fact, South West regions made up seven of the top-ten most expensive towns, with all ten based in the South of England.

The full top-ten list was as follows:

Seaside Town Region Average House Price 2015
Salcombe South West £672,874
Sandsbank South West £614,726
Aldeburgh East Anglia £413,393
Lymington South East £404,781
Dartmouth South West £403,767
Padstow South West £387,109
Lyme Regis South West £343,604
Budleigh Salterton South West £342,442
Bigbury on Sea South West £333,626
East Wittering South East £330,146
All seaside towns in Britain average   £208,729

[3]

Biggest rises

House prices continued to rise across a number of seaside resorts over the last twelve months. The highest growth was recorded in Newtonhill in Aberdeenshire and Shoreham on Sea, both recording rises of 20%, four times greater than the overall average.

Sandwich in Kent (18%) Watchet in Somerset (18%), Seaton in Devon (17%) and Dalgety Bay in Fife (16%) also recorded high average price growth.[4]

Most expensive seaside towns revealed

Most expensive seaside towns revealed

Scottish Soar

The research also indicated that the greatest seaside price rises over the last decade were north of the border. Fraserburgh in Aberdeen has seen an incredible increase of £109% since 2005, with average prices rising from £63,540 to £132,920.[5]

Lerwich in the Shetland Islands also recorded an incredible growth, of 102% over the last ten years. However, despite this considerable rise, Scottish towns make up eight of the top-ten least expensive seaside regions in the UK.[6]

Craig McKinlay of the Halifax, noted that, ‘seaside towns have a distinct attraction, offering that all important sea view. There is a romance associated with living by the seas and this is evident in the high house prices.’[7]

[1-6] https://home.bt.com/lifestyle/money/mortgages-bills/britains-seaside-property-hotspots-revealed-11363982971421#.VWQ0ND9LZZU.twitter

[7] http://www.dailymail.co.uk/news/article-3095521/Salcombe-Devon-Britain-s-priciest-seaside-town.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

 

 

Architects Still Reporting Lack of Brick Supply

Published On: May 26, 2015 at 9:52 am

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Architects are still having problems getting enough bricks for projects, despite the industry pushing for production growth.

Last summer, the lack of brick supply hit the news as some products had 60-week lead-in times. Research has indicated that the import of foreign bricks has more than doubled since.

The Brick Development Association (BDA) has discovered there was a 17% rise in production during 2014 and a 5% increase in the first quarter (Q1) of 2015.

However, architects are finding that there is still a shortage of bricks. Businesses are organising projects around lead-in times, availability and even other construction materials.

Head of Sustainable Design at Pollard Thomas Edwards, Tom Dollard, says that the practice is typically reporting a worse situation than last year, but bricks are still a strong cladding solution.

He says: “We are having to be more creative in terms of the construction techniques. More contractors are looking at structural insulated panels and timber frame as an alternative to traditional brick and block.”1

Architects Still Reporting Lack of Brick Supply

Architects Still Reporting Lack of Brick Supply

Director at Ollier Smurthwaite, Matt Ollier, is also having difficulties, with most bricks being used from mainland Europe: “Our starting point now, when looking to specify bricks, is to ask which bricks are available on short lead-in times.

“UK bricks are still a minimum of 20 weeks lead-in. Things don’t appear to be as bad as they were, however, last year we were given a waiting time of 44 weeks.”1

Project Orange associate, Barry Stirland, says that black and white brick façades used in one of its projects – a 216-property development in East London – has been specified to take brickwork “off the critical path altogether.”

He explains: “The building can be made watertight before a brick is laid. Brick samples were submitted to the planners well in advance of commencement on site and their timely approval has allowed the main contractor to place their order in line with the construction programme.”1

Director of 5plus Architects, David King-Smith, has not experienced any availability changes, but is being more selective in specifications: “Shortages in effect seem less of an issue simply because we have adapted to the market really.

“I don’t see a particular problem with the current position and I no longer see it as unique versus any other lead-in periods in the industry in general.”1

King-Smith says that some clients are asking the practice not to use brickwork generally, but this is equally due to a shortage of skilled labourers.

Chief Executive of the BDA, Simon Hay, says that the industry has responded well to the shortages of 2014 and has also made huge capital investments to keep up with demand.

He notes: “The provisional stock levels at the end of Q1 2015 stood at 415m, this is the highest figure of stocks since Q1 2013. At the end of Q1 2014, production was only 389m.

“Production now is 464m in Q1 2015, therefore, stocks are rising in parallel with production, but it still takes time to replenish all brick types as the industry makes over 1,200 bricks in the UK. Contractors may always have to order ahead for the most popular bricks.”1

Economics Director at the Construction Products Association, Noble Francis, reports that although production rose by 17% in 2014, deliveries only increased by 4%. However, imports grew by 117% compared with 2013.

He says that the market is back to pre-recession levels: “In 2008-09, house builders were able to order days in advance due to the sharp fall in house building leading to rises in brick stocks despite falls in capacity.

“Over the past two years, house building has risen considerably and, as a consequence, house builders are being asked to plan in advance once again. In addition, prices have risen due to the rise in demand. That is not a brick shortage, that is a natural consequence of demand.”1 

1 http://www.architectsjournal.co.uk/news/architects-struggle-to-get-hold-of-bricks-continues/8683345.article?referrer=RSS&utm_medium=twitter&utm_source=twitterfeed

 

Lowest Ever Mortgage Rate

Published On: May 24, 2015 at 4:24 pm

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Categories: Finance News

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Mortgage lenders have been competing for the lowest rates, causing one to offer a record low 1.07% rate.

Lowest Ever Mortgage Rate

Lowest Ever Mortgage Rate

Yorkshire Building Society has released a two-year fixed rate deal at the lowest ever rate offered in the UK, revealed experts.

Moneyfacts’ Rachel Springall says: “There’s a real fixed-rate war going on at the moment. A lot of people were saying, ‘It’s not going to go below 2%’, but that happened months and months ago. It’s highly likely that someone will try to undercut it.”

The price war is the result of record low base rates of 0.5% and arrives soon after the UK dropped into negative inflation for the first time since 1960.

However, Yorkshire Building Society’s deal requires a 35% deposit and has a fee of £1,369.

Earlier in May, the Co-operative Bank launched the former lowest ever mortgage rate of 1.09% with a 40% deposit and £1,499 fee.

Springall continues: “Borrowers need to be aware of the full cost of a mortgage. With arrangement fees and booking fees after two years, it’s likely to be twice the amount.

“Borrowers need to see the true costs and seek out advice, because otherwise their costs could go through the roof. But it’s easy to move mortgages and it’s easy for consumers to see the deals out there.”1

1 Yeatman, D. (2015) ‘Lowest-ever rate on offer to homebuyers’, Metro, 22 May, p.2

Prestige Finance Introduces Second Charge BTL Range

Published On: May 23, 2015 at 3:48 pm

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Prestige Finance, a second charge loan specialist firm, has introduced a new range of buy-to-let mortgage products.

Prestige Finance Introduces Second Charge BTL Range

Prestige Finance Introduces Second Charge BTL Range

Using the advice of its key partners, Prestige created the products to allow landlords to release equity without having to reorganise their portfolio and existing buy-to-let mortgage.

The variable range includes a professional landlord offer, for three or more homes, with a maximum loan of £1m per property. Rates begin at 5.79% up to 75% loan-to-value (LTV).

The standard buy-to-let product has a rate of 6.99% up to 75% LTV with a maximum size of £200,000 per property.

Head of Product & New Business at Prestige, Darrell Walker, explains: “We’re very pleased to launch our completely new range of buy-to-let products. It couldn’t have been achieved without the valuable and extensive insight of our broker partners, who have helped us to create such a strong proposition for property investors.

“They told us a large number of their portfolio clients were unable to release equity without disturbing their main headline rate. Also the high rates available would often be the stumbling block for landlords currently benefiting from historic tracker products.

“We’ve listened to broker feedback and utilised the specialist lending expertise of our parent group, OneSavings Bank, to create a genuine market-leading product range.”1

Sales & Marketing Director at OneSavings Bank, John Eastgate, adds: “The inclusion of a brand new product range again reinforces Prestige Finance’s position as a real leader in terms of product innovation, partnerships and its professional approach to the second charge market.

“It’s great to witness the expertise of the specialist lending teams of OneSavings Bank coming together to deliver a competitive product that really helps both key partners and their clients.”1

1 http://www.propertyreporter.co.uk/finance/second-charge-btl-range-launches-at-prestige-finance.html