Boris Johnson vows to bring “connectivity” to all in London

London Mayor Boris Johnson has vowed that all parts of the capital will have access to internet connectivity one day, as part of his city-wide infrastructure overhaul.

The Mayor made the pledge in his highly-anticipated London Infrastructure Plan document, which was published earlier today and aims to address the city’s future infrastructure needs.

“London has a number of areas that have no or poor internet connectivity, many of which, left to market forces, may well remain unconnected,” the report states.

“We need to think differently about providing high-speed access to the internet via a combination of technologies.”

Johnson set out plans to build a London-wide “connectivity” network, that will use a mix of fibre and mobile broadband, and wireless technology to ensure internet access is available across the city.

The idea of using street furniture, such as bus stops and lamp posts, to deliver internet services across the capital was also mooted.

Earlier this week, it was announced that Johnson planned to use the document to declare that London will become the first capital city in the UK to benefit from 5G by 2020.

The report states this will be partially achieved by negotiating with Ofcom ahead of this date to ensure London has access to sufficient amounts of radio spectrum to deliver 5G services to its citizens.

“The Mayor will also work to ensure high-quality communication networks are installed in new developments, particularly in Opportunity Areas, following the example of the Queen Elizabeth Olympic Park,” the Infrastructure Plan report states.

The document also sets out plans to establish a Connectivity Advisory Group, featuring representatives from the Greater London Authority, local councils, the business sector and ISPs, who will be tasked with ensuring all areas of the capital can benefit from internet access.

Part of its remit will include embarking on a city-wide mapping exercise to ascertain which areas already have access to high-speed internet and the barriers that prevent other parts of the city from benefiting from it.

“The mapping exercise will be used to develop a connectivity ratings map, introducing an accurate and responsive rating system for individual properties both to assist consumers and providers, and to encourage developers and property owners to improve connectivity to their properties,” the document states.

“We will also work with estate agents and surveyors to develop ways of assessing properties for their connectivity and to ensure that such assessments become part and parcel of building surveys in the future, given their importance to consumers and businesses.”

It will be responsible for profiling the business and residential areas of London to ascertain their future connectivity needs, and consider ways to encourage adoption of high-speed internet access.

Furthermore, it will be called upon to look for ways that the capital’s existing infrastructure can be used to improve the availability of high-speed internet services.

How long does it take to secure a buyer in London?

Properties across London are selling nineteen days faster than this time last year with the average time to sell in London now 41 days, compared to a national average of 65 days.

The fastest selling boroughs are Lewisham and Sutton with an average of 29 days until a sale is agreed, and seven of the top ten fastest selling areas across Great Britain are all London boroughs.

At the slower end of the London market sit the expensive boroughs of Kensington & Chelsea at 82 days and Westminster and Camden, both at 66 days.

Looking outside of London, properties could be for sale for an average of more than 100 days before a deal is made in the slowest selling locations, with areas in Wales and the North making up the majority of the slowest list.
Click here to see the full report.

Rental property in London ‘is in high demand’

The demand for rented property in London is at its highest ever levels, according to new findings.

Almost all property owners in the UK report that tenant demand is currently stable or growing, while an average yield of 6.2 per cent was reported across landlord portfolios in the second quarter of the year.

This represents a slight increase on the previous quarter when the average was 6.1 per cent. The average yield has remained around this level for the past 12 months.

Furthermore, 38 per cent of landlords said that they are feeling more optimistic about the prospects for their rental portfolios.

Just four per cent of landlords said they are feeling pessimistic about attracting more tenants.

Commenting on the findings, John Heron, managing director of Paragon Mortgages, which carried out the research, said: “It is interesting to see the improvement in confidence amongst landlords in the private rented sector. We are seeing much more activity in the private rented sector and, in turn, the buy-to-let market as a result of continuing strong rental demand and the investments made by landlords.

“Tenant demand is clearly staying very healthy, and this is likely to remain a common trend over the coming months, particularly as we are still not seeing the level of house building that the wider housing market so desperately needs.”

At the same time, 16 per cent of landlords are planning to add to their rental portfolios during the third quarter.

There has also been no significant rise in rental arrears, with 72 per cent saying they think rental arrears levels will remain stable in the next year.

Only a small minority (11 per cent) expect levels to increase.

The increase in new tenants has been partly down to the high prices of properties in the UK. Research published by Nationwide revealed that property prices increased by 0.7 per cent in May 2014 and were 11.1 per cent higher than May 2013.

First-time buyers now need over £200,000

The average price for properties bought by first-time buyers has jumped more than 11 per cent.

According to the latest figures from the Office for National Statistics for the period between May 2013 and May 2014, first-time buyers are now paying an average of £202,00.

Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “In some ways it’s harder than ever to take that first step. However, lenders have stepped up to the plate with more higher loan-to-value products available now than four or five years ago, with family-assisted schemes and offset products, as well as government schemes such as Help to Buy. The important thing is that buyers must be able to afford the mortgage now, as well as in the future.”

The report showed that overall UK house prices rose by 10.5 per cent over the same period, with house price annual inflation of 11 per cent in England, 6.5 per cent in Wales, 3.6 per cent in Scotland and -0.7 per cent in Northern Ireland.

House price growth in England was again skewed by a record annual in London (20.1 per cent) as well as increases in the South East (9.6 per cent) and the East (8.6 per cent). If London and the South East are taken out of the figures, the UK rise is 6.4 per cent.

Alexander Gosling, managing director, online estate agents Housesimple.co.uk, said that the London property market has moved ‘from the hot to the hyper’.

“Talk of price rises in the capital going off the boil is clearly premature, even if the month-on-month increases have moved from the giant leaps to mere big jumps,” he said. “Supply is strong as sellers decide that now is the time to cash in, and, despite tougher lending conditions, demand is still robust. Despite the strong Pound, international buyers also continue to view the capital’s property as a secure long term investment.

“There is a greater sense of sanity elsewhere in the country, with sustained rates of growth now spreading even to the areas worst affected by the slump.”

“It is crazy that ordinary working people are having to pay so much for something as fundamental in life as a home,” said Duncan Stott, director of PricedOut, the campaign for affordable house prices. “With over £200,000 needed to secure a first home, young people will now be saying ‘enough is enough’. We need urgent action to bring an end to rising house prices.”

Campbell Robb, chief executive of Shelter, said the figures showed that house prices are ‘spinning out of control’.

“They are putting a stable home even further out of reach for ordinary families,” he said. “Instead, scores of people are either stuck in their childhood bedrooms or forced to bring up children in unstable and expensive rented homes, however hard they work or save. With interest rates at historic lows, it is worrying that taking on huge mortgages is becoming a tempting option, and something that could have disastrous repercussions in the future.”

Rory Penn, partner of prime London property agency VanHan, said that London’s super prime residential market had ‘calmed down’ and that ‘the excessive year-on-year growth has cooled’.

“But contrary to popular belief, there is still demand from both domestic buyers and a seemingly infinite range of overseas homeowners and investors,” he said. “With many buyers priced out of super prime areas, focus has switched to emerging residential areas such as Covent Garden, which is now drawing the glitterati from Mayfair.”

Baroness Jo Valentine, chief executive of London First, said the record prices rises were not surprising as London’s population was growing much faster than its housing stock.

“London is suffering from a desperate lack of supply,” she said. “We need to be building around 50,000 new homes a year in the capital and we are building less than half of that.

“Across London there are empty sites and redundant buildings owned by the public sector that could be much better used for housing. But there is no body dedicated to actually identifying where all this land is, so actually getting round to selling it happens at a glacial pace. We need to give the Mayor the power to create a 21st Century Domesday Book for London so we know where this land is.”

Weekly rents per square foot rise fastest in Marylebone

Weekly rents in prime central London have finally nudged up by 4% overall to reach an average of £1.05 per square foot while void periods fell by 25%.

Although the most internationally favoured areas have come out on top again, in terms of highest weekly rents paid per square foot, last year’s most expensive area Knightsbridge actually saw the largest fall in rents (11%, to £1.22). Knightsbridge lost first place to Mayfair and St James, which clocked up an average of £1.31.

New research conducted by London Central Portfolio (LCP), Specialist Funds and Asset Manager on their fund portfolios shows that tenant priorities are also shifting. The trophy status of living in the most globally renowned areas is being trumped by traditionally less well known areas with buzzy atmospheres and convenient transport links to the City, Canary Wharf and Heathrow.

Rents in Knightsbridge and Mayfair are falling, whilst the increasingly fashionable Marylebone remains the most popular location amongst London’s tenants, showing a 23% growth in rents to £1.13. Marylebone is now the third most expensive area, joining the prestigious £1.00 High Club where weekly rents stand at over £1.00 per square foot.  Also joining the club for the first time was South Kensington, following a 14% increase in average rents. Notting Hill, however, has been relegated with weekly rents falling to 93p per square foot.

Area	Average weekly rental per sq foot 2014	Rank	Change from 2013
Mayfair and St James	£1.31	1st	2nd
Knightsbridge	£1.22	2nd	1st
Marylebone	£1.13	3rd	5th
Kensington	£1.05	4th	3rd
South Kensington	£1.04	5th	6th
Chelsea	£0.97	6th	8th
Notting Hill	£0.93	7th	4th
Bayswater & Paddington	£0.93	8th	7th
Pimlico	£0.83	9th	9th

Rental upturns were also witnessed for Pimlico (5%) and Bayswater & Paddington (9%).

Naomi Heaton, CEO of London Central Portfolio, says: “For the last few years, rents in less traditional areas have lagged behind the rapid increase in sales values which have been witnessed as the centre of gravity in prime central London moves to locations around main transport links.

“As gentrification continues, the smart buy-to-let investor will look away from prime central London’s trophy locations to the areas with more pizazz, where there is still room for rents to increase. ”

Hard working property
As a whole, one and two bedroom units remain the hardest working and most resilient sector of the market. On average, one bedroom units continue to achieve the highest average weekly rents per square foot, £1.05 this year, although this has seen a slight fall of 3% from 2013. On the other hand, as the dynamic of ‘location over size’ seen during the financial constraints of the credit crunch eases, two bedroom flats are making up lost growth with an 8% increase in rents to 96p.

However, three bedroom flats, which rarely see a return for the extra square footage, are continuing to lag behind.

 

Demand strong for prime property in key London areas, but must be priced to sell

Despite mixed messages on the health of the housing market in London, demand for property in key locations in Notting Hill, Holland Park and Kensington remains strong.

Over the last three months the number of properties sold in these areas increased by 17% over the same period a year ago, according to the latest market intelligence report from agents Crayson.

The amount spent on property in prime central London has risen significantly this year. Buyers have spent an average of £157.5 million per month in our area, 27% higher than at the same point a year ago.

The report also reveals that apartments are outperforming houses. Indeed, sales of apartments have dominated the market so far this year, with the number sold rising 32% compared with the figure at this point a year ago. The opposite is true for houses, with sales so far this year down 21%.

Flats have also outperformed houses in terms of price growth. Flats sold in these areas over the last three months achieved prices per square foot that were 13.6% higher than the same period in 2013. Houses saw average prices increase at a still respectable 10.6%.

However, prices per square foot for homes selling in excess of £5 million have plateaued this year. But they are still achieving values which are 28% higher than they were three years ago.

The strongest growth in values continues to be for homes at the lower end of the market, under £1 million, and those priced between £2 million and £5 million, with average values within these price bands having risen by 12.7% and 12.9% respectively.

Within the Royal Borough of Kensington some 24% of properties currently on the market have been reduced in price since they were first marketed. The highest proportion of price reductions is seen in the price bracket over £10 million with 31% now reduced. This compares with just 21% of properties priced at £2 million to £5 million.

The report also says that 25% of the most prolific agents within these area, that is those with more than five properties listed for sale, have reduced the prices of more than a third of their available stock.

‘Put simply, vendors who achieve the best price for their property do so by bringing their home to market at the right price, creating early interest amongst buyers,’ said managing director Nick Crayson.

‘Properties that are launched at an unrealistically high price are missing out on crucial selling opportunities in the early stages of marketing. The average amount of time before a property is first reduced is currently 70 days,’ he explained.

‘Over valuing by agents is increasingly common within our market, something Crayson do not advocate. Potential vendors must ensure that they launch their properties onto the market at the right price, to attract early interest and increase the chance of achieving the best value,’ he added.

The report also points out that outside prime central London, the surrounding boroughs have continued to post significant growth. The outperformance of boroughs such as Hammersmith and Fulham, Wandsworth and Lambeth has meant the significant premium for homes in Kensington and Chelsea has been eroded. Prices in Kensington & Chelsea were 196% higher than those in Lambeth in the middle of 2012. In April 2014, this had fallen to 166%.