The housing market has got the extended holiday many were hoping for and the clock is now effectively ticking for new buyers who haven’t yet started the process of purchasing a home to take advantage of a reduced Stamp Duty charge.

 

Stamp Duty Extended Holiday

 According to Rightmove data it has taken an average of 54 days to sell a home since the holiday was introduced in July, down from an average of 70 days in the 12 months prior.

Assuming the average time to sell a home remains at the current level, aspiring buyers have until 7th May to begin a purchase to take advantage of the holiday extension.

Overall the Stamp Duty holiday has provided a much-needed confidence boost to the housing market following its full closure in March last year. However, its previous cliff edge ending on 31st March always risked seeing sales fall through increasing anxiety for aspiring purchasers. The extension will provide welcome relief to those purchasers and open the door to additional buyers. There now needs to be clear signposting introduced to ensure the cliff edge is not just pushed further down the road.

Nick Whitten - Head of UK Living Research

2% overseas Stamp Duty surplus

This tax represents a big shift in UK Government policy away from an open trade policy – until now there has never been a consideration of an investors origin if they are looking to buy an investment home.

This tax will undoubtedly create some market resistance for an initial period until it becomes accepted. It should be noted that many other competing cities already provide higher levels of overseas taxation so the UK’s major cities should remain competitive on the international stage.

 

First Time Buyer Mortgages

95% mortgages have been all but non-existent for some time now so the Government’s mortgage guarantee scheme is hugely welcome news for aspiring home owners who have long faced mounting affordability issues.

 

Capital Gains Tax changes

The UK has obviously seen a significant increase in its debts as a result of supporting the country through the COVID pandemic. Those who can pay more tax, should pay more – that is only right and it fits with the levelling up agenda.

Nearly half of the UK’s privately rented homes are in suburban locations owned by small scale buy-to-let landlords. There could now be an increase in demand for this kind of housing stock from first time buyers looking to take advantage of the new mortgage guarantee scheme. The proposed changes to Capital Gains Tax could prompt of flurry of sales from landlords looking to exit before the changes take place. However, if there isn’t sufficient lead in time before the CGT changes take effect, it could reduce the volume of rental stock coming to market. CGT is ultimately a discretionary tax, and if homes become bloated with that tax, many landlords will opt to sit on their asset and wait.

 

Wholesale Review of Residential Taxes

Looking ahead, the Government has announced a Tax Day on 23 March and this could include the commencement of a widespread review of residential property taxes.

Reviewing how residential properties are taxed in the UK is long, long overdue.

Council Tax is based on residential values from 1991, which frankly are a very poor reflection of the current market. Meanwhile, Stamp Duty is a hugely inefficient tax which is ultimately a potential hindrance to the future economic prosperity of the UK. It makes no sense for people to find themselves ‘locked-in’ to their current home because of the tax burden of moving. People need to be able to migrate towards opportunities as easily as possible in the 4th Industrial Age and as part of the levelling up agenda.

Government also needs to acknowledge that we have an ageing population and SDLT is a hugely punitive tax for those looking to descend the housing ladder and right-size in later life. Without enabling more people to downsize, we face many people continuing to live inappropriate homes for their needs which in turn forces Government to have to increase expenditure on health and social care.

However, any significant changes in the tax system must be carried out with care, following a detailed consultation and with a sufficient lead-in time. Any replacement residential tax should carry a similar starting burden for individuals. The variance should then occur over time to allow householders to adjust their finances accordingly.

 

Overall Budget Conclusion

There are many welcome announcements within this Budget. However, solutions to the housing challenge must also focus on providing homes to suit a greater variety of end user needs. Society has changed and we must move away from the concept of blanket home ownership. We need measures to support an increase in purpose-built rental homes which will professionalise the private rented market, providing long-term, secure housing, and raising the profile of renting as an aspirational lifestyle choice.

And we need attractive, specialist later life housing which will help free up family homes and make more efficient use of existing stock.  With people living longer, the UK’s ageing population is typically under occupying family homes, but appropriate alternatives will encourage right-sizing.

Measures to address the housing market should be targeted at increasing all forms of supply, not just increasing demand for Private Sale housing only. 

 

For more information, please contact:
Christine Wong (REN06667
M: +6012 908 6318
E: wong.christine@ap.jll.com

Nick Whitten - Head of UK Living Research
12 Mar 2021

In this video, Meg Tang from JLL Japan will explain the differences between Joint Tenancy and Tenancy In Common

16 Jul 2020

JLL Osaka’s market report summarizes on the latest trends in the Osaka real estate market with focus on the office leasing market for Osaka Grade A offices and the commercial real estate investment market.

With vacancy rate below 1%, Osaka office market is witnessing sharp rise in rents. A series of upcoming events that will support economic growth such as the World Expo and prospective IR development is setting up for further office demands. Large new supplies from 2022 will present excellent opportunities for office relocation. The market is likely to favour the landlords for the foreseeable future.

Although Osaka office market currently has very little vacancy, there are several projects that warrant attention. This report offers a map of key new office development projects, with insight on the outlook of office leasing and investment markets.

Download the report today to further understand the real estate strategy and investment activities, backed by latest market trends and investment market topics

And if you have any questions on this research or anything else that you'd like us to clarify, please feel free to get in touch with us directly at +603 2260 0700  

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29 Apr 2020

Osaka’s The High Horie

Those who are considering diversifying their property investment portfolio in the Land of the Rising Sun will be glad to know that Keihan Real Estate Co Ltd is opening its latest development in Osaka to buyers from Malaysia. Called The High Horie, the project provides opportunities for rental income and offers a place for people to start their own businesses, says the developer, which aims to expand its reach internationally.

Keihan Real Estate representative Mayuko Takahashi says in an email interview that the vision of the Keihan Group appears in the phrase “global Keihan Group”.

“The goal is to welcome customers from around the world with a global perspective and to develop business across Asia,” she says.

“We have been selling our properties mainly in China, Hong Kong and Taiwan for about five years. This experience has helped us develop products based on the opinions of overseas customers. So far, we have developed products that satisfy not only Japanese but also overseas customers, and to continue making progress, we decided to sell in Malaysia.”

Established in 2000, Keihan Real Estate is a subsidiary of Keihan Electric Railway Co Ltd, which was founded in 1906. The holding company developed the railway links between Kyoto and Osaka, and engaged in property development along the railway line it set up. After some company restructuring, the real estate division was established and it developed and sold about 2,500 condominium units in Osaka city between 2014 and 2018.

Its latest project, The High Horie, is located in Nishi-ku, Osaka. According to Takahashi, it is a popular residential area with a young population, which is forecast to increase. Within the vicinity of The High Horie are amenities such as a hospital, a library, supermarkets, schools, parks and fashionable high-quality shops. The nearest metro station — Nishinagahori — is a minute’s walk away.

Osaka’s The High Horie

“This project is planned mainly for people living in the city centre such as singles, DINKs (double income, no kids) and those living in multiple residences or need closer access to their workplace,” says Takahashi. “In addition, we have designed common spaces and services that will support SoHo (small office/home office) use with the increase in remote work and side businesses, owing to the work-style reform in Japan.”

In recent years, the government has been reforming workplace practices. These include encouraging people to have side or multiple jobs. To cater for this new type of worker — who either is a freelancer, is someone who works from home or has his or her own small business — Keihan Real Estate created this SoHo product.

The High Horie occupies a 1,014.27 sq m parcel and has an estimated gross development value of ¥6.5 billion (RM262 million). The 12-storey project will have 141 units with three layouts — studio (22 units), 1-bedroom (105 units) and 2-bedroom (14 units). The built-ups will range from 325 to 798 sq ft, with a starting price of ¥29.4 million. There is an option for a guaranteed rental scheme for investors. Open for sale now, The High Horie is 47% taken up to date. The project is expected to be completed next January.

Osaka’s The High Horie

A unique feature of the development is that each unit can be registered as a business address, which owners of regular condos in Japan are not allowed to do. Among its facilities will be two common areas — a lounge area on the ground floor for residents and/or business owners to have open meetings with clients or guests, and a space with private meeting rooms.

The design of the units also differs slightly from that of typical Japanese high-rise developments. “A typical Japanese condo has a ceiling height of 2.4m to 2.6m while this project’s units will have a ceiling height of 3m to 3.55m. By providing a higher ceiling, it would be possible to partition the space not only vertically but also horizontally into lofts and storage spaces,” explains Takahashi.

The additional space would allow people to live and work in the same place. This flexibility, along with the shared facilities, will enable small businesses or freelancers to conduct their business in the same space without having to meet clients or guests elsewhere and incur additional expenses, she adds.

 

Condo market ‘is doing well’

JLL Japan head of international residential Kentaro Sato believes that Osaka’s high-rise market is a prime area for those looking to expand their investment portfolio. JLL Japan, assisted by JLL Malaysia, is the marketing consultancy for The High Horie.

“In central Osaka, the condominium market is doing well. One of the reasons is that the units are not that expensive in terms of price per sq ft. If you compare with condos in Tokyo, Osaka’s are priced 60% lower. So, it is still at a reasonable level,” says Sato.

Similar to big cities such as Tokyo and Fukuoka, Osaka is experiencing urbanisation. So many people from the surrounding areas, including Kobe and Kyoto, are moving to the city, he continues. “There has been a significant increase in population in the main central districts in the city. That is why condo sales in central Osaka are quite good now.”

From 2017 to 2019, condo supply increased 95% and the price index improved 103%, according to data provided by Sato. Moreover, the city’s population grew 101%, from 2.713 million to 2.74 million, and rent rose 105%.

The yield is higher [in Osaka] than Tokyo because Osaka is the second largest city or economic zone in Japan…The other reason [to invest here] is that Osaka is expected to have an integrated resort (IR) project. That is probably the main driver that has increased the interest of foreign investors,” he says.

In 2018, the IR Bill was passed in Japan, allowing for an IR with casino in up to three cities. It will take another year for the selection of the cities to be completed, but Sato says Osaka is highly favoured to be chosen. It is estimated that one IR with casino will generate 97,000 new jobs.

Meanwhile, there is a limited supply of residential properties in Osaka, as there are developers that buy land to build hotels, he explains. Owing to this competition for land, the supply of condos is expected to be controlled, leading to the units’ values holding, he adds.

Sato points out that infrastructure improvements to rail lines to the reclaimed island where the proposed IR will be located as well as to Kansai International Airport will also increase interest in and demand for properties in Osaka.

The steady growth of the Osaka property market looks set to continue if all goes well, says Tetsuya Kaneko, head of research and consultancy at Savills Japan.

“The overall residential market in Osaka is faring well. Rent went up about 2% last year, which demonstrates strong demand. Prices have risen 3% to 4% in Osaka city, but the transaction volume has gone down, owing to high prices like in Tokyo,” he says. “This moderate growth is likely to continue. Developers have strong balance sheets and no incentive to sell condos at a discount. They can wait for a long while.”

Kaneko believes the high-rise market has many investment catalysts, including “burgeoning inbound tourism, the casino, the 2025 World Expo and related transport infrastructure improvements”.

The infrastructure projects, as stated in Savills Japan’s May 2019 “Osaka Real Estate: Rebirth of a Market” report, include the large urban redevelopment project, Umekita Phase 2, slated for completion in 2023. It is expected to feature towers with office, retail and residential components, developed across 140,000 sq m. The report also states that Yumeshima, the artificial island that is the proposed site for the IR development and will host the 2025 World Expo, is also a catalyst for growth.

Furthermore, infrastructure additions such as the completion of the Umekita Station in 2023 and the Naniwasuji Line in 2031 are expected to shorten the travel time between Osaka Station and the Kansai International Airport by as much as 30 minutes, benefiting the investment environment.

Mari Kumagai, research senior director at Colliers International Japan, says the Osaka market continues to perform well, with average unit prices on an upward trend.

“With limited supply, the market condition remains in favour of developers. The average unit price has continued to trend higher at a CAGR (compound annual growth rate) of 5% since 2014, or reaching ¥708,000 per sq m as at end-2019. We expect to see a similar trend over the near term, although the downside risk has been increasing, with lower risk appetite as a result of the Covid-19 outbreak. A combination of tight supply, limited land supply for development and larger incoming institutional investments supports the ongoing market growth,” says Kumagai.

She points out, however, that while foreign buyers are allowed to purchase and invest in properties in the country, exiting may be a challenge because of volatility in the market.

Meanwhile, to ensure that Osaka remains in the minds of local and foreign investors, Keihan Real Estate plans to develop more projects in the city. “In the Kansai area, we plan to develop projects mainly in the six wards of Osaka city. Besides The High Horie … we also plan to build a tower project in front of Osaka Castle’s Otemon Gate as well as a tower project in the bay area, which has attracted attention, owing to the 2025 World Expo and the proposed IR,” says Takahashi.

 

For more information on The High Horie and or anything else that you'd like us to clarify, contact JLL International Properties at +603 2260 0700 or Wong.Christine@ap.jll.com

29 Apr 2020

New residential developments are transforming the neighbourhoods of Westminster, Victoria & Pimlico.

Westminster, Victoria and Pimlico located in the heart of Central London were once an office-dominated area, which morphed into a mixed use and bona fide residential in over a decade. Nearly all of these residential developments are largely borned out of the relocation of government departments from their traditional Westminster homes.

The large-scale, vibrant residential neighbourhoods built are prominent around Victoria station, whilst retaining the charm and distinction loved by so many residents.

 

Allure and Glamour of Central London

 

Westminster, Victoria & Pimlico areas are known for its Michelin star restaurants such as The Goring Dining Room, Quilon and A. Wong. Other Michelin star restaurants nearby include Marcus and Dinner by Heston in Knightsbridge, Amaya Grill and Bar, Celeste and Petrus in Belgravia, Hide and Gymkhana in Mayfair and Aquavit and Ritz Restaurant in St James’s.

Fascinating landmarks include Buckingham Palace, Houses of Parliament,  Downing Street, Big Ben, Westminster Abbey, Tate Britain, St James’s Park, Victoria Palace Theatre and Apollo Victoria Theatre.

A typical journey from Victoria Station would take residents to Oxford Circus (4 minutes), King’s Cross, St Pancras (8 minutes), Paddington (14 minutes), Liverpool Street (17 minutes) and Canary Wharf (19 minutes).

 

 

Younger students and scholars alike could live near to educational institutions such as University College London, King's College London, The University of Westminster, University of the Arts, London, Imperial College of Science, Technology and Medicine, London South Bank University, London School of Economics and Political Science and many more.

 

Strong positive growth and high affluent residents

 

JLL’s research has revealed that house prices in Westminster, Victoria and Pimlico would rise strongly after positive Brexit outcome, at 16% from 2019 to 2023. The outlook for rental growth remains bright post-Brexit, at 15% within the same period.

With 732 units under construction or in the planning pipeline, the house price growth in the London Borough of the City of Westminster has been exceptional over the past 20 years. Prices have increased by 368% during this time, an average of 8.0% pa. This is higher than the Greater London average of 311% and 7.3% pa respectively.

New-build pricing in the area currently averages £1,750 psf and typically ranges between £1,400 and £2,750 psf. Pricing can push above £3,000 psf in some high-specification and well-located areas. The high pricing levels mean that demand for apartments typically comes from domestic and international HNWIs.

Rents for a new or nearly new one bedroom apartment in the area typically range between £450 and £700 pw, while a two bedroom apartment can usually command a rent between £600 and £1,100 pw.

 

Featured Projects

 

The Broadway

The Broadway is the most high-profile scheme under construction. The Abu Dhabi Financial Group has partnered with Northacre to build out the six buildings planned at the former Metropolitan Police headquarters New Scotland Yard. There will be 258 private units. The prime location and high specification have meant that pricing for units is often in excess of £3,000psf.

 

9 Millbank

9 Millbank is a prestigious new build and refurbishment of a Grade II listed riverside address with iconic and panoramic views over London's famous skyline, located just a short stroll from Houses of Parliament. This St Edward scheme of 187 private units across two phases is due to complete in 2022. The current phase of 9 Millbank, Millbank Residences is just a short stroll from Westminster Palace and occupies a converted riverside location with views over the Thames.

 

No 1 Palace Street

No.1 Palace Street is located opposite Buckingham Palace, Westminster and adjacent to St James's Park - one of London's most sought-after neighbourhoods. This palatial development is an exceptional collection of 72 private apartments, across an island site comprising five different architectural styles.

Set in a unique location, directly opposite Buckingham Palace, the prestigious building has a long-standing affiliation with British Royalty. Built in 1861, the Grade II listed wing of the building, Buckingham Gate, was once the major landmark ‘The Palace Hotel’. It hosted distinguished guests of Queen Victoria, before the third wing of Buckingham Palace was built.

 

Chimes

Chimes in a new luxury residential development for over 60s in the heart of Westminster. It is a new residential development located on the Horseferry Road, SW1. There is a plethora of nearby famous cultural landmarks including Westminster Abbey, Palace of Westminster and the Tate Britain. The development benefits from convenient transport connections to Central London, with Westminster, Pimlico and St James’ Park and Victoria underground stations only a short walk away.

 

For more information on Central London and its latest residential properties, contact JLL International Properties at +603 2260 0700 or Wong.Christine@ap.jll.com.

14 Apr 2020

The UK’s seven largest regional economies are hugely important to the prosperity of the UK and this has been demonstrated in JLL’s most recent research. The city centre residential markets within these regions are all thriving and showing numerous signs of positive growth.

The GDP of these big seven regional UK cities account for 17.5% of the entire nation’s GDP and the average GDP per capita is £32,500 p.a., 6.6% above the UK average. Furthermore, the UK 2070 Commission, chaired by Lord Kerslake, has set out seven national priorities to pump prime these regional economies. Action plans include accelerating devolution and encouraging the creation of major specialist regional employment hubs.

JLL has identified existing business strengths in each of the major regional cities. Download the report to read on the impacts of these regional UK cities and how their economies will drive UK’s future growth.

And if you have any questions on this research or anything else that you'd like us to clarify, please feel free to get in touch with us directly at +603 2260 0700.

 

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27 Mar 2020

JLL’s latest research suggests that 2020 will be a year of recovery for the Prime Central London sales market.

The Prime Central London sales market picked up at the end of 2019 as the General Election result injected positivity and a more certain outlook. Looking forward, the rise in turnover witnessed in Q4 2019 should follow into Q1 this year, with a stronger rally in transactions as more buyers and sellers return to a more liberated market.

The Prime Central London lettings market is facing an acute shortage of properties to let, which has led to the highest rate of annual rental growth for over seven years. 2020 could be a year of mixed fortunes for the lettings market. Greater political certainty is likely to bolster rental demand. Nevertheless, the improved performance of the sales market may draw away some lettings demand.

Download the report today to gain a comprehensive insights on the real estate in Q4 and on what will be upcoming this year.

And if you have any questions on this research or anything else that you'd like us to clarify, please feel free to get in touch with us directly at +603 2260 0700

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18 Mar 2020

Here are a few points highlighted in the report include: -

- 2.5 million additional people living in the UK’s urban areas by 2024, rising to 5 million over the next 15 years.

- Interest rates and mortgage rates will remain low despite increasing, providing notable support for the housing market.

- The medium-term outlook for the UK housing market is remarkably positive.

- London’s annual GDP growth of 2.3-2.5% pa during 2021-2024 will far outstrip other regions.

 

And if you have any questions on this research or anything else that you'd like us to clarify, please feel free to get in touch with us directly at +603 2260 0700

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02 Dec 2019

Paddington has become a truly mixed use and diverse London destination. Office, retail, leisure and residential development have been interwoven around the canal system to create a vibrant, welcoming and exciting place to live, work and socialise. The highly connected transport hub, Paddington station, is being reconfigured to cater for the opening of the new Elizabeth Line (Crossrail), which will make Paddington even better connected to London’s three main employment hubs – the West End, the City and Canary Wharf.

 

Here are points highlighted in the report: -

- 158 new unit sales in Paddington in the year to Q2 2019

- New-build pricing in Paddington typically ranges between £1,400 and £1,800 psf.

- 530 units and 1,003 private units are in the construction and planning pipeline in Paddington

 

And if you have any questions on this research or anything else that you'd like us to clarify, please feel free to get in touch with us directly at +603 2260 0700

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25 Oct 2019

Canary Wharf is transforming from a primarily financial hub into a vibrant Central London mixed use neighbourhood. Crossrail will make a huge difference once it is fully operational and will make Canary Wharf more accessible and better connected than ever before. There are plenty of new developments under construction to cater for the first wave of new residents keen to take advantage of the enhanced connectivity, while the planning pipeline is ready for the next wave of Canary Wharf occupants. Many of the new inhabitants will be renters, such is the scale of multifamily development. The volume of new development over the next 5–10 years will mark a step change for Canary Wharf as a residential location. With an exciting future ahead, we expect both sales price and rental growth to be strong over the next five years.

 

Here are points highlighted in the report: -

- More than 5,150 private units have been completed in the last five years.

- Wood Wharf is the largest ever residential development in the area.

- New-build prices have increased in Canary Wharf by a significant 31% since 2009.

 

And if you have any questions on this research or anything else that you'd like us to clarify, please feel free to get in touch with us directly at +603 2260 0700

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13 Jun 2019