UK Market Review. London, Country & Coastal property

Transcription

1 UK Market Review London, Country & Coastal property Number 33; 2014

2 One of four newly developed apartments within a grand building on The Strand and overlooking Waterloo Bridge, this two floor, 2,268sqft penthouse embodies a level of luxury for which our London Residential Development team is seeing great demand: see London Market Comment, page 8. 2 Above: Covent Garden penthouse, WC2. One of a development of four priced at 2.35 million to 4.75 million 3

3 Country Market Comment Up to 400, Gwynedd 189,950 Our clients' properties tend to be distinguished by quality more than price and often reflect our reputation for expertise in idiosyncratic houses, such as follies and converted historic buildings. Many substantial, high quality properties are available at this price level still around twice the national average price. All figures are guide prices Wiltshire 320,000 3 Bucks 275,000 4 Somerset 285,000 5 Berkshire 225, Front cover: Kent, million guide Below: Cornwall, 985,000 guide Above: Suffolk, 3.5 million guide Dorset 395,000 7 Worcestershire 300,000 Buyers are keen: inflexibility simply reflects a new market norm 8 Yorkshire 399,000 9 Denbighshire 399, Kent 340, Oxfordshire 300, Dorset 349, Suffolk 395, West Sussex 395, Norfolk / Suffolk borders 399,950 4 Seismic shifts Earlier this year, whilst most UK newspapers were trumpeting news of growth in house prices and mortgage approvals on which more overleaf the FT quietly reported that the number of electoral wards in which wealthy but not super-rich * householders cannot afford to buy an average price home, rose from 101 in 1995 to 489 in 2012 and spread beyond London to include wards in every English region. At about the same time, a DCLG English housing survey bulletin revealed that, for the first time, private rented households now exceed those in the public sector and are second in number only to owner occupation. These statistics reflect the fact that the majority of UK households including current owner occupiers now have insufficient income, if armed only with a traditional 10% deposit, to buy a decent home. They are also borne out by the experience of our offices across the country, which see few purchases that do not involve a large *95th percentile / 67,340 net income pa 5

4 Hampshire, 3.85 million guide Gloucestershire, 1.8 million guide Dorset, 1.65 million guide the typical purchaser has. That said, buyers are entering the market in force now because they have real confidence that the economy will continue to recover. They are securing longer-term fixed rate mortgages and at last! more owners in London are deciding that differentials have peaked and it s time to make that move out of town. These factors lie behind the modest (single figure) yet consistent growth we are seeing in registration of would-be buyers, in year-on-year transactions and in the appraisal of properties likely to come to market. Indeed, all the signs are there for a very busy few months ahead, even without capital growth adding fuel to the fire. Above: Surrey, 1.55 million guide percentage of equity or cash, usually from other property-related interests. Against such a background, one might reasonably ask if the continued growth in capital values is a good thing. Except that, outside of the South East, real growth is barely happening, if at all. The latest Land Registry report (at the time of writing) gives an average annual house price growth of 4.2%. However, this is skewed by Greater London at 10.9%: over 50% of counties saw annual price growth below 2.5% including Durham (-3.4%), Cornwall (0.2%), Chester (2.4%) and Gloucestershire (also 2.4%). Again, our own experience is consistent with the 6 New Burnham Market office We are now the only national agent with a Norfolk office north of Norwich. Situated in the centre of Burnham Market, this office will help us to serve growing demand from across the country and beyond for high quality coastal properties figures: buyers are very price-sensitive. Despite this, we have high expectations for the coming months. Why? Growing sales activity Historically, growth in house prices and transaction numbers has been fuelled by cheaper debt and above-inflation growth in salaries. Today, underlying mortgage rates cannot reduce further, borrowing limits are stricter and, for 95% of households, real salary growth remains elusive. Combine these points with the dependency of most buyers on a fixed amount of equity from one or more other properties, and it s easy to understand how little room for manoeuvre on price Above: Yorkshire, 950,000 Left: West Sussex, POA 7

5 London Market Comment Left: Star Yard WC2. Newly renovated four bedroom house between New Square and Chancery Lane. 4.4 million guide New house in Oxshott, 3.9 million guide More positively, 26,320 new London homes were registered last year a 60% increase on 2012 and the highest figure recorded since NHBC records began in But we need many more. Vital foreign investment Often blamed for pushing prices higher, foreign buyers still account for around 40% of all Jackson-Stops & Staff buyers in central London and an even higher proportion of new build purchasers. Yet most of us also acknowledge the great wealth that these buyers bring and spend here. Less well known is the extent to which foreign investors are also vital to improving the supply of new homes and are thus part of the answer. Without exception, all of the central London projects we are currently handling have at least some funding from overseas and, according to CBRE, large developers from just four nations China, Singapore, New build: essential to London s prosperity Our new developments team will bring over 40 projects to market this year, marking both its success as a leading national agent in central London new development and the unprecedented scale, in modern times, of new home building in London. The importance of residential development to the market, and London, as a whole, is hard to overstate. There are just two factors which affect the affordability of property: supply and demand. London s population grew by over 100,000 in 2012/13 and is continuing to rise, so best not hold your breath hoping for demand to fall. 8 Above & right: 19 Buckingham St WC2 Eleven brand new apartments with interiors by LINLEY Interior Design. Malaysia and Qatar have planning permission to build more than 33,000 homes here. Without foreign money to improve the supply of housing, London cannot hope to sustain its current prosperity. Beauty as a planning criterion The British have a strong tradition of regarding all new development as ugly. It is noticeable though, that few object on such grounds to the up-market London developments we tend to handle because, well, most of them look terrific. This is partly because our consultancy team works hard on the aesthetics with developers and architects, knowing that showing sensitivity to the existing built environment helps to get local people on board. It also suggests that many NIMBYs across the country have a point: they don t object to new homes in themselves, just ugly ones. Realistically, could a requirement for beauty be set as a planning criterion? If local people got to vote on it, quite possibly. Older Brits moving back in Something which has been happening almost enough now for us to call it a trend, is for both empty-nester and newly-retired Brits who long ago moved to the country, to move back in. For example, we recently sold two new 2M+ City penthouses to couples moving in from the Home Counties. And again a sign of the times the number of such applicants we have for similar glamorous, heart-of- London properties, is starting to rival the more traditional pool of flash young bankers. How London is changing. 9

6 Building on the past: this Elizabethan-style Essex mansion incorporates details from, amongst others, Hampton Court and Blenheim Palace. Built in 1928, it is available at 9.5 million. Traditional Architecture Not a historical but technological heritage by Léon Krier Many people reject the possibility of traditional architecture today because of a crass categorical misunderstanding. They amalgamate architectural with mythological traditions. They confuse empirical know-how with metaphysical speculation. They erroneously equate building technology with transcendental belief systems. Traditional architectural forms are shaped by man s enduring use of natural materials to settle in specific climates and geographic and cultural conditions. They make up part of the timeless technological heritage of man. They are as permanently relevant to the welfare of man as common languages, tools and techniques. To declare them mere historical heritage and therefore dated phenomena is not only a philosophic mistake but an ideologically motivated error calling for authoritative correction. Over centuries traditional architectures around the world have evolved a great 10 variety of building languages. Unlike spoken languages, the elements constituting the traditional building vocabulary need no translation in order to be understood across borders and ages. Of universal validity, they are part of technology before and beyond mere historical deployments and meanings. Modern traditional builders or designers are naturally polyglot, can within no time decipher and master local idioms and realize structures in harmony with local traditions, culture and climate. This cultural and technical versatility contrasts with the dumb and blind modernist monoglotism, imposing the same building types and mannerisms across the planet, irrespective of culture, climate, or geography. To build traditionally today is not ignoring the demands of modern life, on the contrary it demands a challenging intellectual and professional determination, often against overwhelming peer pressures, reigning fashionable fads and, most determinant, the pervading tyrannical impositions of a large-scale construction industry and its powerful pro-regulation lobbies. Modernism upholds the idea that industrialization and the technological revolutions irreversibly changed all conceptions of life and hence of building and settling the earth that we have no choice in the matter, that we must submit to the paradigmatic shift, that its refusal is condemning us to anachronism, ridicule and oblivion. You are bypassed by history, Phyllis Lambert whistled in my ear on the occasion of the Eisenman-Krier exhibition at the Yale School of Architecture. Some architects, though, are unimpressed by modernist calls to order. They disobey consciously the siren song they were deafened with in colleges and universities. For most of them doing the right thing for a lifetime has earned them little professional recognition and no institutional glory. How can this scandalous behaviour be explained? Are they off their minds? Or is there a justification for what is at best brushed aside as a romantic, irrelevant rebellion? There is now a broad consciousness growing of the fact that modernist architecture and suburbanism are uniquely dependent on the massive and sustained availability of fossil fuels. Modernism is not a paradigmatic, irreversible historical phenomenon; on the contrary, the Leviathan, fed on slave labour and for two centuries raised to monstrous proportions on hydrocarbons, will literally run out of fuel. It is an epiphenomenon of the recently peaked fossil fuel age, the consequence of which the world economy is now resizing itself to. Within a generation from now megasized buildings, sprawling suburbs, and synthetic materials may become items only affordable by privileged and hyper-militarized minorities, and the traditional architectures of today may be the first blossoms of a massive trend reversal. Léon Krier has taught architecture and urbanism at the Royal College of Arts, at Princeton, Yale and the University of Notre Dame and received the inaugural Richard Driehaus Prize for Classical Architecture. This article is an extract from his preface to a new book, Traditional Architecture: Timeless Building for the Twenty-First Century, by Alireza Sagharchi and Lucien Steil with foreword by HRH The Prince of Wales. Published by Rizzoli. 11

7 Country Living Matthew Parris The novelist Graham Greene remarked that big directions in adult life may be traced to small, even random, episodes in childhood. The Power and the Glory tells of a depressed dentist who had been led into his now-hated profession by his first infant memory: finding a dentist s clay caste discarded in a bin and being fascinated. But infant experiences can lead to happy outcomes, too. When I was three we lived in a tiny, cold, stone terraced house in the village of Newsham in the Yorkshire North Riding, a mile or so from the moors. We were not rich but my mother had some rich friends who lived in Newsham House. They had expensive children s toys and I used to go there to play. Newsham House was a minor residence but a fine, isolated Georgian house set back upon a gentle upward slope and looking over green fields towards the village, perhaps half a mile away. I loved 12 the elevation, the isolation and the toys. Somewhere in my tiny mind the notion must have taken shape that it would be a fine thing to live in a house like this. Today I live in a minor residence but a fine, isolated stone farmhouse, pre- Georgian, set back upon a gentle upward slope and looking over green fields towards the nearest village, about half a mile away, in the Peak District and a few miles from the nearest moor. Sixty years and the length of one county have interposed themselves between that wideeyed little boy and the happy and contented political journalist and broadcaster I ve become; but I believe a direct line as fine as gossamer and as tough as steel runs between those two times and places. I didn t intend or didn t think I intended to make rural England my home when I became a Derbyshire MP. London, I Derbyshire, 1.5 million guide. Should Matthew ever wish for a local alternative to his minor Peak District house, this Hope Valley manor house might suit. I thought living in the country was going to be just a rung on my ladder to a political career. But politics proved just a rung on my ladder to living in the country. imagined, would still anchor my life, but to do my duty I would buy a bolt-hole in the constituency. I chose a tiny, cold, stone terraced house in the village I now look across to. I wasn t searching (or didn t think so) for more. Then one day 30 years ago I was jogging along the hilly lanes nearby and, rounding a bend, saw my destiny standing on the hillside in the sunshine. I literally heard myself as an outsider might taking a note of the estate agent s number. I had no choice. I was doing what I d been told: by a toddler in Former Conservative MP for Derbyshire West, Matthew Parris is a BBC R4 regular, has weekly columns in The Times and The Spectator and is widely regarded as one of the UK s most powerful political commentators. REGIONAL FOCUS: THE NORTH WEST The Affordability Advantage Liverpool, Lancaster, Salford and Manchester all feature in the latest Lloyds Bank top 20 of the UK s most affordable places to buy a home. Given this, you could be forgiven for assuming that the sole reason an ONS report has found North West households to have the largest disposable income outside London, is that its residents aren t spending all their income just paying the mortgage. The full picture probably isn t quite as simple as that, but it does mean business investors can be confident that recruitment is unlikely to be hampered by unaffordable housing. And the North West is seeing a great deal of both inward and home-grown investment. Higher rental returns Already strong, investment in private property to rent is likely to continue because demand is high and returns are about 30% higher than in Greater London and 10% than the West Midlands. Private rents and social well being are also significantly affected by the availability of social housing, so an investment so far of more than 150m in social housing projects in Manchester and Leeds by the Pension Insurance Corporation, is most welcome, especially as the same fund has 180m earmarked for similar investments over the next 12 months. Such actions help the North West to remain affordable to rent, as well as to buy. Booming industries fuel demand for homes 40 minutes from Salford, 699,000 guide A raft of success stories suggest that a story of major growth in the North West is still only in its opening chapters. Boosted by tax breaks and the move of the BBC and Children s ITV to MediaCity, Salford has become the focus of a revival in the animation industry. Retailers such as B&M Bargains now valued at over 1 billion and recently relocated to Liverpool have thrived on the recession, as have clothing suppliers such as Manchester-based BooHoo.com, the AIM listing of which in March valued it at over 560 million. Range Rover continues to sell Evoques in China as fast as its Liverpool factory can make them and Chinese money also accounts for an 800m investment in Manchester Airport, prompting yet more planned improvements in the already extended tram network. With all of this going on alongside the longestablished football industry and the success of Grosvenor s redevelopment of Liverpool s retail centre, it is perhaps not surprising that both Manchester and Liverpool are currently enjoying higher job growth than all UK cities bar London, Edinburgh and Birmingham. And all this without shale gas or HS2. Impact on upper property market Of course, most of this activity does not directly affect the upper end of the property market. It does, however, provide the long-term prosperity on which the market as a whole depends. As a result, though we do not anticipate any dramatic growth in capital values over the coming months, we do envisage and are seeing a real return of confidence. With it, we are also seeing a willingness amongst buyers, including incomers such as those who have moved with the BBC, to commit to their future in the North West. Private finance Busier times put focus on avoiding delays The speed at which lenders push mortgage applications through is becoming a real issue, as a growing market is confronted with a shrunken mortgage industry. We now look at every client s needs not only to see which lender will offer the best deal, but also which will deliver on its promises in time. Some admit they are taking eight or nine days just to look at new applications. The problem has been exacerbated by a shortage of valuers, often prompting another fortnight s delay. The reason, says the RICS, is not a lack of surveyors per se, but that, deterred by reduced fees plus large increases in litigation and associated insurance costs, hundreds of surveyors have stopped doing mortgage valuations altogether. These strains appeared well before the April 2014 enforcement of the FCA s Mortgage Market Review, the purpose of which is to make it harder to get a mortgage. It puts the onus on lenders to determine what each borrower can afford, requiring lots of details, making refusal to lend more likely and adding to lender workloads. Little wonder we are going to great lengths to keep sweet our relationships with the most efficient, well-resourced lenders. One valuable service provided by the FCA website is a list of financial service firms to avoid, a striking number of which use clone names such as allianz-global.com, Barclay Trust International and Zurich Direct. The full list can be found at For independent advice, please contact Private Finance jackson-stops@privatefinance.co.uk 13

8 A Man of Many Seasons THE MOHUNS OTTERY ESTATE, DEVON The most famous son of the 228 acre Mohuns Ottery estate in Devon is Sir Peter Carew, whose family lived here from Peter was born here around 1514 and enjoyed a tumultuous early life which seems to have prepared him well for the classic Tudor games of courtly gamesmanship, political conspiracy and taking land by force. Lots of people died along the way. Apparently a difficult child, Carew was put, aged twelve, into the service of a French nobleman, later to be rescued by a relative who chanced upon him on his way to the siege of Pavia in Italy. Carew went with him, but the relative died and Carew took up with a marquis, who also died. Carew then entered service for Philibert, Prince of Orange, who died. Happily, Philibert s sister recommended Carew to Henry VIII, who took him into service. Peter was sixteen. Ten years later, Carew travelled Europe with a cousin who, in Vienna, died. He then served in the war against France, for which he was knighted and, in the same year, became a Devon MP, living at Mohuns Ottery. Carew remained a local MP for almost 20 years, but this was not a quiet period. A leader of the Wyatt Rebellion against Queen Mary, he fled to the continent, was arrested in Flanders and held, until buying his way out of the Tower of London. On the accession of Elizabeth I, all was well, but Carew used his enhanced status to launch a protracted and often bloody campaign to lay claim to large areas of southern Ireland. After much destruction, he succeeded in no small part, but fell out with many in the process including Elizabeth and in 1575, still arguing and fighting, he died. His family manor house in Devon survived him and, though the main part was later lost in a fire, much of the original gatehouse and many other details remain. Mohuns Ottery is available via our Taunton office. Guide price 3.5m Well-placed...to provide unrivalled personal service 14 International London London Chelsea Holland Park Mayfair Pimlico Richmond Teddington Weybridge Wimbledon Country Houses & Estates Residential Development Central Northampton Woburn Cotswolds, Hereford & Worcester Burford Ch. Campden Cirencester North West & N Wales Chester Hale Wilmslow Yorkshire & North East York East Anglia Burnham Market Bury St Edmunds Chelmsford Ipswich Newmarket Norwich South Arundel Chichester Dorking Goring Midhurst Newbury Winchester South East Canterbury Cranbrook Oxted Sevenoaks Tunbridge Wells West Country Bridport Dorchester Exeter Shaftesbury Sherborne Taunton Truro Edited and designed by Blue Moon Creative