Localism was given a boost this week when Grant Shapps, the Housing Minister, launched the Community Right to Build scheme. Under the plan, £17 million is available for communities to instigate their own building projects without the need to go through the usual planning application process — providing a project meets set criteria and is backed by local residents. The Department for Communities and Local Government said that projects could be homes, community halls, playgrounds or businesses. It is unlikely to be enough to stimulate house building though, according to Knight Frank. The agent’s Housebuilding Report 2012 shows that developers are pessimistic, with most saying that bank funding will fall and that the New Homes Bonus is making little difference.
Safe as houses?
Investors seeking a safe haven for their cash have been responsible for 60 per cent of prime London property acquisitions, by value, in the past five years, according to a report by Development Securities and Fathom Consulting published yesterday.
The prime Central London property market has always been in a world of its own, distinct from the rest of the capital and country. The report’s authors say that price movements in this rarefied market are driven by global equity prices, the relative value of sterling and safe-haven cash flows. The latter being the most important and accounting for a 30 per cent rise in property prices relative to the rest of the country since 1995. The authors warn, however, that a break-up of the eurozone could cause cash to flow back out of the capital as sterling appreciates against newly-formed currencies and equity markets tumble.
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Emirate appeal
One place that the cash might flow is Dubai. The property company CBRE reports that the rental rate for villas rose by 3 per cent quarter-on-quarter in the first quarter of 2012 — the first increases since the crash of 2008-09. Rates for two-bedroom apartments rose by 5 per cent. This week 224 apartments in Emaar Properties’ Panorama development sold within hours, establishing a lucrative second-hand market and fuelling fears that property speculation would return.