22 June 2010 4:05 PM

The elephant in the room

Will the run-down Elephant & Castle ever be regenerated, or is it destined to remain an, er, elephants' graveyard of aborted dreams and failed schemes?

No one can doubt the need to do something about the dismal roundabout-cum-shopping-dump where the cautious dare not tread after dark. However, the central location should have created the potential for revival. But the combination of an incompetent local council, which has not improved in spite of changing political control, and a long series of developers who have insisted on making money in the troubled location has resulted in no progress being made for the past few decades.

Now we are told that the latest proposal, a £1.5 billion scheme by Olympic Village developer Lend Lease, has been delayed yet again - this time by the local council elections. A development agreement was meant to be signed on 22 June. But the change in control at Southwark Council from LibDem to Labour has meant a delay until 7 July - at least.

The new Labour administration says it needs more time to scrutinise the details of the draft agreement. "I made no secret that I had some concerns with the heads of terms was signed in November", said incoming Labour leader Peter John. "But I have already had very positive discussions with Lend Lease and I am looking forward to moving towards an agreement that meets the aspirations of the borough and the community, including good outcomes relating to the shopping centre, affordable housing and leisure facilities."

Can all these goodies be delivered by a private developers and still produce a profit for the Aussie company in the current economic climate? Only time will tell. In the meanwhile, the elephant stays in the room - and not in a good way.

17 June 2010 5:13 PM

Transport for London certainly has its uses

The announcment by former Mayor Ken Livingstone back in 2006 that it would be taking a massive 200,000 square feet in the Shard of Glass at London Bridge Station - almost a third of the total office space in it - from 2012, enabled the project to be funded, which is what Ken intended. The Shard is now on the way up - literally.

Now the Qataris, who hold the purse strings, have decided that they can do better than TfL and have bought out their pre-let in the landmark building. The exact amount is confidential, but TfL have said the deal would contribute "a multi-million pound cash sum to TfL’s established efficiency savings programme" and help safeguard passenger improvements, which must be true.

Last year TfL announced that in light of financial pressures – including a drop in Tube passenger numbers and the impact of the collapse of PPP contractors - it would be doubling its efficiency programme to over £5 billion.  As a result of the decision not to move to the Shard, TfL's relatively modest accommodation savings are now on target, although it will now have to find affordable office space elsewhere.

As for the Shard, which will also contain a hotel, apartments, shops and leisure, its owners now believe that the its completion will coincide with a shortage of new high quality space available to let, resulting in higher rents. A spokesman said: "This agreement enables us to position the Shard at the very top end of the London office market." This is very optimistic.

Prime office rents in the City of London are today LOWER IN CASH TERMS than they were just before the big crash of the late 1980s; in real terms they are substantially lower. The current wisdom is that the recent mild revival in demand for City offices is unlikely to last. And the Shard, while extremely tall, is not exactly in the City.

So the Qatari owners are gambling on the future (what does that remind you of?). But as they are sitting on enough gas to fuel several futures, I will not lose too much sleep over their risk...

05 May 2010 9:31 AM

Tenants look to Cable and Osborne over Crown Estate sale

Tenants of the 1,300 homes which the Crown Estate is proposing to sell off to private landlords are taking no chances with the election results. They have written to George Osborne and Vince Cable, asking them to match assurances given by a Labour Treasury minister that the government would intervene if a sale was to go ahead.

Exchequer Secretary Sarah McCarthy-Fry has written to say: "I have had discussions with the Crown Estate about their proposals to sell off their affordable housing in London and I have deep concerns about the effect on the future availability of such housing. If the final proposal did not further the 'wider public benefit', which the Treasury Select Sub-Committee Report referred to, then I would be prepared to consider issuing a direction to the Crown Estate."

On March 30th the influential Treasury Select Committee published a sharply critical report on the sales and, as the beneficiary of all Crown Estate profits, the Treasury has the powers to control its activities.

However, with a change of government likely, the tenants want assurances from the other parties. So Benjamin Bowling, chair of the Millbank  Crown Residents’ Association, has sent Osborne and Cable recorded delivery letters. Both were told that in a recent consultation there was cross-party opposition to the sale among all local MPs, five affected borough councils, the Mayor of London and employers’ organisations who nominate key-workers.

They were also reminded that their election manifestos contained policies which the sales of affordable rented homes fly in the face of.

Mayor Boris Johnson and the London Councils wrote to the Crown Estate last month urging them to withdraw from the sale. The Standard understands that the response was unhelpful, although the Mayor's office declined to comment due to the impending election.

A Royal Petition signed by 1,221 residents delivered to the Queen on 23 March and the online petition to the Prime Minister has already been signed by 1,306 people.

The Crown Estate board will meet in mid-May to discuss the plans.

27 April 2010 2:58 PM

Saved from the developers

Here is some good news: the special character of a period estate in Weybridge, Surrey, has been saved from insensitive over-development by covenants imposed by the original builder 80 years ago.

The Oakfield Estate consists of 40 mostly detached houses built in the late 1920s by Edward Horace Thompson. The houses are close to the town centre and have been well maintained with large, leafy gardens. The character of the estate has been preserved intact. But when the elderly resident of one of the houses  died, the neighbours on either side bought the middle house and made an application to demolish all three and replace them with 10 town houses. A planning application was submitted for five-bedroom houses, one storey higher than the existing, with tiny gardens.

The neighbours decided to put up a fight, "They would have been completely out of character", their leader Pandora Hadfield told me. "Living next door,  we were against this planning application, but so were all the other residents of the estate".

Fortunately, the objectors knew that when the estate was built, restrictive covenants were imposed by the developer, which was common at the time.

With the help of covenant expert Victor Mishiku they wrote to the would-be-developers advising that all three houses in question had legally binding covenants which specified 'not more than one house per plot' could be built on the land.

"After two of our letters were ignored, we instructed a specialist solicitor. Gerald Moran of Hunters wrote to the developers, which resulted in them also taking legal advice from a barrister. He agreed that according to the covenants not more than one house could be built on each plot, and an undertaking was given not to breach them," Pandora explained.

The residents have now found out that the house at the centre of the row is for sale - as a family home. Three cheers!

09 April 2010 10:13 AM

There's no place like home

Moving home is among the most expensive and stressful things anyone can do. Yes apparently one in five Londoners get itchy feet almost as soon as they move into a new home. They express disapppintment within the first fortnight and, before three months are up, they are already surfing property websites and perusing local agents' ads. And - no surprise - almost 30 per cent also start arguing with their partner about their new surroundings.

A study by esure found that after as little as six months in a new property, half of Londoners are already thinking about moving again. And nearly four in ten start getting jealous of homes owned by their friends and family.

The study proves yet again that, when it comes to property, Londoners just can't settle down, get bored easily and cannot help thinking the grass will be greener elsewhere. A third said they considered moving because of household items not working properly and a quarter thought moving would be easier than making significant repairs.  One in five were thinking of moving "because they had grown tired of their décor and furnishings".

I don't get it. Is the hassle of finding a new home, selling your old one, negotiating both sets of prices, dealing with buyers, sellers, mortgage companies and conveyancing solicitors really less than investing in some paint and wallpaper? Is it cheaper to pay stamp duty and agents' fees than get a man in to fix the roof - or the washing machine? Or even buying a brand new one?

I have lived in the same Victorian house since 1975. And, while I have spent a small fortune on keeping it sound and good looking, it is nothing compared with what it wouldhave cost to move seven times, which is the average over a 35-year period.

All those television programmes, promoted by estate agents with obvious agendas, have a lot to answer for. And, as the housebuying season gets into gear, my advice is - DON'T, JUST DON'T.

26 February 2010 2:58 PM

Why 'sugar cube' American embassy could turn out to be a sweetie

Battersea MP Martin Linton summed it up when he said the new American Embassy design "looks a bit too much like a sugar cube." Its launch was duly followed by the usual suspects making the usual complaints. But I think that now the verbal dust has settled, we will see that the whole idea could be something of a sweetie.

The real winners will, of course, be the residents of Grosvenor Square. Ever since 9/11 they have had to live in constant fear of a major terror attack on what is a prime terror target in their midst. And, in order to prevent any risks to the existing embassy - but NOT its terrified neighbours - the Americans surrounded themselves with ugly and intrusive security measures and scary armed-to-the-teeth Marines. Understandable, yes - but also deeply unpleasant. I expect they can't wait for 2017, when their unwanted guests will depart south of the river.

Not surprisingly, the glass-castle-in-a-moat plan which won the Vauxhall competition will be designed to provide maximum security, and it should be commended for eliminating the visual signs of it. As the winning architect, James Timberlake, put it: "No walls, no fences, no bollards". Good start.
Timberlake, who looks more like a rather earnest scientist than a trendy designer, also convinced me when he said the building would produce more energy than it will use. After all, it was his firm which - with US chemical giant DuPont - developed the special polymers which will make up the building's faceted facade and the solar panels on its roof.
At only 12 storeys, the building will not damage any significant views, and the meticulously planned pools and parks should prevent its surroundings becoming a windswept concrete space, like the one which forms the unattractive setting of City Hall.
There is still a long way to go before the sugar cube is built and occupied. In the meanwhile, let's suck it and see.

19 February 2010 12:45 PM

It's deja vu all over again...

In 2002 the Office of Fair Trading launched a two-year inquiry into the housing market. I went to see the officials involved and told them they could save two years by simply requiring all estate agents to belong to an Ombudsman scheme as a condition of trading. In 2004 the OFT finally produced its report, which listed all the usual estate agents horror stories and complaints - and recommended, er, no action at all.

Happily, I was able to get some regulation through the back door. I persuaded the Housing Minister of the day (the excellent Keith Hill) to make it a requirement, under the Home information Pack rules, for agents to belong to an Ombudsman scheme if they wanted to handle HIPs. Since then, Ombudsman membership has become a legal requirement for all selling agents, although for some reason the lettings chaps - who can be even dodgier - are still allowed to inhabit the Wild West. And all this happened without the assistance of the OFT (to put it mildly).

So the news that the OFT had produced yet another report on the housing market, produced, for me, another big yawn. And I was not disappointed: the second report was just as useless as the first. It took them a year to conclude that existing legislation - which happened in spite of the OFT, not because of it - is "comprehensive and wide-ranging, and that further regulation is unnecessary".

Which? chief executive, Peter Vicary-Smith, says: "We believe an independent review after the election would be the best way to determine what has to change and how this can be achieved". I think this would be a waste of another two years. All estate agents, whether selling or letting, should belong to mandatory redress schemes to which their victims can complain and from whom they may expect remedies.
My experience (25 years and counting) tells me that will do nicely.

15 February 2010 4:39 PM

Government facing united opposition over 'Healey's Folly'

It's not often that the National Union of Students and the British Property Federation are in agreement - but they are now. In fact, even the London Forum of Amenity Societies feels strongly that proposals by Housing Minister John Healey to require planning permission if a property owner wants to let to three or more unrelated people is a very bad idea.

Government figures show that 20 per cent of private-rented sector properties are shared. In London it is much higher and rising year-on-year, as both home ownership and private renting become less affordable. In fact, sharing is the only option not only for students but also for low-paid workers who want to leave home. There is broad agreement that "Healey's Folly" will greatly reduce the supply of this vital commodity as law-abiding landlords will be tempted to sell up and get out rather than face the bureaucratic nightmare.
"In an effort to save a few seats in university towns the Government is rushing through this ill-thought through proposal before the election", Michael Bach tells me. They have not looked at the unintended consequences of this ridiculous proposal – only two unrelated people may share a flat after which the planners wade in! This is what gets planning a bad name".

Bach - no hothead he - is absolutely right.  Flat sharing has no dedicated champions, yet it plays a key role in London’s out-of-reach housing market. Most of us - myself included - spent several years flat sharing when we first came to London and for other the flatshare is the only alternative to the growing trend of living at home until our 30s. As Bach says, it is a rite of passage as well as an economic necessity.

Bach has now written to Boris Johnson, urging him to take a stand. We need a promise from the Conservatives that if Healey's Folly becomes law - they will repeal it at once. Come on Boris - do it.

01 February 2010 1:37 PM

House prices rise again - a nation cheers. Will we never learn?

Only last week - literally - we learned that more and more Londoners are struggling with their mortgage repayments and hanging on to their homes only thanks to the record low mortgage rate and the patience of the lenders. The former is precarious and bound to rise and the latter is wearing increasingly thin.
I am hoping that at least those people will realise that the cause of their woes is the very thing which has been - and still is for many - that source of cheer, not to mention dinner party chatter: ever-rising house prices.

In Greater London, research from Halifax tells us, the average price rise during the noughties was 80 per cent, taking is from £142,233 in 1999 to  £255,473 last year. This followed three previous decades during which price rose by a staggering 229 per cent IN REAL TERMS - that is, above and beyond the Retail Prices Index. Believe it or not, the average London home in 1969 could be bought for just over £6,000.
Since then, the average annual growth rate in London in real terms was 3 per cent, compared to 2.5 per cent for the UK as a whole.

I am often asked when would be a good time to buy a property. My stock answer is "1972". This happens to be the year I first arrived in London, but it was also the year that saw the biggest ever price rise: 33 per cent above RPI. Ironically the year when I myself bought my London home (where I still live) was 1975, when prices fell by 18 per cent. But that's a sideline.

What matters is that the illusion of wealth which comes with news of house price rises is, for most people, a dangerous one. Home buyers who entered the market in the past decade are most at risk of losing them to repossession, leaving them with nothing at all.  For the more fortunate who bought much earlier, the more expensive your own home is, the harder it will be for your children to get on the property ladder. And the more expensive it will be for you if you want to help them.

Which is probably why the number of owner-occupiers in London rose only slightly from 1.69 million in 1991 to 1.8 million now and, given the growth in househld numbers, proportionately not at all. What London badly needs is a very long period of house price stability, if not gentle falls. Now that would be worth cheering.

20 January 2010 4:21 PM

Mortgage affordability is the best on record, or is it?

Good news from the Council of Mortgage Lenders: they claim that, aside from a brief period in 1996, mortgage affordability is the best on record. But hold on a moment. Capital Economics, who are not in the business of selling home loans, beg to differ.

They say that the CML's sunny outlook is based on interest repayments alone, which with today's record low rates reduces the payments to only 14 per cent of average earnings. Capital Economics, on the other hand, measure mortgage interest AND repayments of capital, producing a rather less afforable 37 per cent of income.

CE's property analyst Seema Shah points out that a change in interest rates has a larger impact on the monthly costs of an interest-only mortgage than on a traditional repayment loan, skewing the CML's figures to support its remit. And I should point out that paying the interest without repaying capital is rather like paying rent: you never come any closer to actually owning the property you are living in, which is effectively owned by the lender until the capital is repaid.

Seema Shah also note that "given the stricter lending environment, it is fair to assume that lenders are currently cherry-picking the borrowers with the highest incomes" - which would also push up their "affordability" calculations, as would the recent reduction of Loan-to-Value from its 80 per cent average to a 20-year low of 66 per cent. So who should you trust?

I'm afraid I must agree with Seema Shah, not only about the interest v capital repayments issue but also that the CML "paints a deceptively rosy picture of the health of the market", as "the measure of affordability should not just reflect the situation for the privileged borrowers who manage to obtain a mortgage, but for all potential borrowers. This is especially significant when, as now, the number of new mortgages granted is particularly low."

And do note her final warning: "If mortgage rates returned to 6 per cent, then affordability would be 16 per cent WORSE than its long-run average".