Tag Archives: Boris Johnson

Mayor’s new housing bank encourages development

London mayor Boris Johnson has seeded a new London Housing Bank with £200 million to support housing developments in the capital. The bank will supply low cost loans with the aim of accelerating housing projects that would otherwise go ahead at a slower pace.

The funds are promised from interest rates as low as one per cent, and will be advanced to developers and housing associations. The aim is to promote both homes for sale, and the construction of new homes for rent. There is a specific encouragement to bring forward affordable rent homes, with a requirement that they are rented at a 20% discount to open market rents, for a minimum seven years.

“Through the pioneering housing bank, I’m challenging the capital’s developers to get building, and deliver the homes Londoners need, as fast as humanly possible. Loans are available from a £200 million pot to significantly accelerate the pace of development, especially on bigger schemes, and unlock additional supply.”

 

Mayor signs off two major new rental projects

London mayor Boris Johnson has selected developers for two residential sites in east London, with 40% of the proposed new homes destined for private market rental.

The sites at Silvertown Way and Pontoon Dock will deliver around 1,200 new homes, of which 480 will be for private rental. The land is owned by the Greater London Authority, and is part of a tranche of sites taken on by the GLA in 2012, with the aim of bringing them into use quickly.

“These schemes will be built faster than conventional methods, by providing a US-style private rented model alongside traditional tenures,” said mayor Johnson. “It’s important for London’s economy to support the growing rental market, providing top quality homes and management, together with the reassurance of longer term tenancy agreements. I also want to entice more institutional investors to come forward and invest in quality homes for Londoners.”

The developments will include a restriction to ensure that the private rented homes cannot be sold off for a minimum period of ten years.

The larger of the two sites, at Silvertown Way in Canning Town, will accommodate 1,000 homes. It has been awarded to Galliford Try, working with Opal Land, itself a joint venture between Thames Valley Housing Association and Linden Homes. The project split will include 347 private rented homes, 232 for affordable rent, and 154 for affordable home ownership, along with 86,000 sq ft of commercial space. Thames Valley’s PRS specialist Fizzy Living is to manage the private rented homes within the development.

AA Pontoon Dock 1

Homes for rental at Pontoon Dock have been designed by Assael Architecture

At Pontoon Dock the development will include 137 private rented homes, 42 affordable rented and 31 shared ownership homes on a site next to Thames Barrier park. Here, the project will be delivered by Bouygues Development, Grainger and funding partner the London Pensions Fund Authority.

The Pontoon Dock project will be majority funded by the LPFA. Said the authority’s CEO Susan Martin: “Investing directly in the redevelopment of the Pontoon Dock site will not only deliver essential housing for London, but will also provide LPFA with the attractive, liability matching, long-term returns we need to provide for our pensioners.”

Mayor calls on public sector to release land for homes

London’s mayor Boris Johnson has renewed calls for public sector departments to release land for housing. It is believed thousands of homes could be built on sites currently lying fallow, as bungling bureaucrats in the NHS, fire and police authorities and other public bodies fail to get moving.

The call for more “brownfield” sites to be released for housing development is a popular one – politicians love the idea as it takes the focus away from development in the countryside or on the edge of existing towns and villages. Yet despite regular pleas for redundant land to be brought forward for reuse, London officials revealed this week that their requests all too often fall on deaf ears.

Deputy London mayor Richard Blakeway said the NHS, in particular, simply fails to engage, telling the Standard: “Our frustration is that there are public bodies, in particular the NHS, that are sitting on huge swathes of land but have little focus on bringing it forward for development. In our last review of what land might be available, the NHS did not even provide a return.”

Among the sites sitting with weeds growing but nothing more, are St George’s Hospital in Hornchurch, which closed in 2012, the Dulwich Hospital that has stood unused since 2005, and Springfield Hospital in Barnes.

Speaking for the business community, baroness Jo Valentine, Chief Executive of London First, said: “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. First we need to give the mayor the power to create a 21st century Domesday Book for London so we know where this land is. Then we need to ensure he has the ability to get on with selling it using his trademark gusto.”

 

Mayor launches rental standard to improve life for London renters

Mayor of London Boris Johnson has launched his London Rental Standard, an accreditation scheme designed to drive up standards in the private rented sector.

The idea is to improve compliance and standards of service among landlords in the capital, many of whom are amateurs with no property management expertise. It will also draw in letting agents.

Landlords need to commit to 15 key elements, in order to be accredited. These include dealing with emergency repairs the same day they are raised; being readily contactable at all times; providing written rental agreements; and giving tenants clear information about how their deposit is protected.

The scale of the issue in London comes from the fact that more than a quarter of the capital’s households now live in rented accommodation, with much of it provided by smaller landlords, a situation fuelled by the availability of buy to let mortgage finance. According to the mayor’s office, 85% of landlords are ignorant of core legislation, and 61% have no professional management training.

Deputy mayor for housing Richard Blakeway said the new standard is part of a wider programme, which he outlined in City AM. “The strategy is three-fold: set professional standards; tackle poor building conditions with tougher enforcement; and promote US-style long-term, purpose-built homes for rent to boost housebuilding – our biggest challenge.”

To encourage take-up of the standard, which is voluntary, the mayor has negotiated deals with insurance provider Endsleigh and deposit manager My Deposit.

Clearly, professional landlords will sign up to the scheme, exposing those who are less scrupulous as being outside the approval regime. However, it will be down to tenants to ask the right questions of their new landlord – and to have the will to walk away from those who are not approved.

£45.5m Build to Rent deal agreed with Genesis Housing

The largest deal to date under the government’s Build to Rent deal has been signed with Genesis Housing Association. The agreement, the fourth under the government funding scheme, will support 485 homes being built in Chelmsford, Barnet, Newham and Ealing.

In each case, the built to rent homes will be part of mixed projects, alongside social rented housing(the lamentable phrase “affordable homes” is still being used in the press release) and homes built for open market sale.

The majority of the homes will be at the former Anglia Ruskin University site in Chelmsford, where Genesis plans 130 one bed and 113 two bed homes. At Grahame Park in Barnet there will be 196 homes, of which it is promised 22 will be three bed homes. There will be 25 units in Ealing and 20 in Newham.

London mayor Boris Johnson commented: “With London’s population soaring, and to help address a 30-year failure to build enough homes, we have set the most ambitious house-building targets in City Hall history. The private rented sector has a huge part to play in this. More well-designed, good quality homes to rent will help rebalance the capital’s rental market, improve services for tenants and stimulate new development and economic growth as well as providing the new homes that hardworking Londoners so desperately need.”

Build to Rent eventually promises £1 billion of lending to the private rented sector, in a series of loans that the government is providing to pump prime the PRS. The money is advanced on a site specific basis, and only on the proviso that it will be repaid with subsequent institutional investment, once the homes are fully rented. A

Until today, two projects in Southampton and Manchester are under way with Build to Rent support, while a third scheme covering 190 homes was signed last week. This will see Mill Group buying homes delivered by housebuilder Bovis Homes, and received an £8.77m advance. More on that here. These projects are from the first round of projects submitted for financial support. A second round of 36 further submissions was received earlier this year.

John Carleton of Genesis commented: “We are delighted to be partnering with the government to deliver a much-needed supply of high quality housing in London and Chelmsford via the Build to Rent programme. It will broaden the diverse range of housing solutions that Genesis offers to people from all walks of life.”

 

Pensioners the new buy to let investors?

Changes in pension rules announced in the recent UK Budget will give retirees greater flexibility about what to do with their pension pot. From April 2015, the over 55s will be able to access more of their pension immediately, and choose how to spend or invest it in a wider variety of options.

While media attention has focused on the potential for grannies to go and buy a Lamborghini with their pension money, in place of an annuity, there are plenty of others who are expecting – or at least hoping – that the funds will make their way into property investment.

The buy to let market could be one beneficiary. “Many agents and mortgage brokers believe people will increasingly turn to buy to let to provide income in later life,” says Letting Agent Today in a recent article. However, that does concern some in the property industry, who note that the property agency world remains essentially unregulated – meaning retirees could be easily persuaded to invest in a poorly performing asset, by unscrupulous agents.

The same article quotes Ed Mead, a London agent with Douglas & Gordon, who warns: “Agents will become guardians of peoples’ pensions. You will need to think seriously about who you hand your future to.”

Buy to let mortgage provider Paragon Mortgages believes the chancellor could go further in his reforms. It wants SIPPS – self-invested personal pensions – to be allowed to hold residential property within them. The firm’s managing director John Heron told Money Marketing: “Private rented property is a popular choice for private investors and could sit well in a personal pension arrangement because it generates a flow of income, has strong defensive qualities and has an excellent track record for producing good returns.

“Having given more choice to how we take our pension benefits, the Government should consider how we can be given more flexibility in building our pension savings and allow individuals to include in their pension the one asset that many investors regard above all others, an investment in housing.”

For one upcoming politician, with a specific housing problem of his own to solve, the latest Budget changes provide a perfect opportunity to keep the London housing bubble inflated. The capital’s mayor Boris Johnson calls the changes a “wonderful opportunity” that will invigorate bank of mum and dad – or even, bank of gran and grandad. And in his mind, that opportunity is for retirees to “find that sudden wodge of dosh that will enable them to help their children or grandchildren find a deposit”.

This is great news, says Boris, because the new funds coming into the market “will give developers even greater confidence to build more homes – and faster than they are now.” So hope there that another government policy will continue to stimulate the UK housing market – for better or, probably, for worse.

You can read Boris’s thoughts in full in his Telegraph column here.

Boris promises more homes for London – rented and affordable, too

More homes, more rental property and greater market transparency have all been promised by London mayor Boris Johnson, in a speech at the MIPIM international property conference.

Johnson said he had set a target of delivering 40,000 homes a year for next 10 years, across a mix of tenures. He cautioned against those complaining about foreigners investing in London property, as such investment shows confidence in the market and is overall beneficial.

Boris Johnson, speaking at MIPIM

Boris Johnson, speaking at MIPIM

“There will be many, many people now – and you’re seeing a growing proportion in London – who depend on the private rented sector, and we’ve got to expand that too. We’re putting huge amounts of our land in, we’ve made about £3.5bn of land available.”

Investment from institutions into the private rented sector is, he said, “at last starting to take off. But what we should on no account do, is turn up our noses at foreign investment, because very often it is that investment that allows us to deliver so many of the homes that Londoners need.”

Johnson specifically mentioned investor Qatari Diar, which has bought into the former Olympic village in Stratford; while Dutch and American pension funds are coming in to help develop private rented accommodation in Elephant & Castle.

The mayor said he expected private developers to help deliver affordable housing. In the current buoyant property market, developers should expect to deliver a useful number of affordable homes in their projects.

“It’s up to us, in government, to do everything we can to ensure that Londoners are in a position to get those homes, and that means making sure there are enough affordable homes in development. And I am proud to say over the course of this mayoralty we will have done 100,000.”

Johnson also said there was justifiable annoyance that residential developers flew to the Far East to sell their London residential developments off plan, sometimes completely ignoring the home market. He has encouraged many of them to sign up to a code of conduct that will ensure they promote projects to a UK audience of potential buyers, at the same time as they court overseas investors.

Want to watch Boris, and hear how well(?) his gags went down? Click for video.