The government may be watering down its efforts to reach net zero, but the construction industry must not let up on its commitment to reduce its impact on climate change.

That’s the call to action from a consortium of leading organisations and professional bodies as it launches the ground-breaking Built Environment Carbon Database (BECD).

The project, which has been developed and funded by the Building Cost Information Service (BCIS) over the last three years, is free-to-access and is designed to become the main source of carbon estimating and benchmarking for the industry.

The BECD steering group, which is responsible for its conceptual development, promotion and adoption, includes representatives from BCIS, RICS, The Carbon Trust, IStructE, BRE, CIOB, the Environment Agency, CIBSE, ICE, RIBA, the UK Green Building Council and ACE.

For James Fiske, BCIS CEO and chair of the steering group, the need to measure and report carbon data has reached a critical point.

He said: “With the government U-turning on green commitments, there has never been a more important time for the UK construction industry to take leadership on reducing its carbon emissions.

“With the recently updated RICS Professional Standard on Whole Life Carbon Assessment, which gives consistency to measuring environmental impact and is the net zero building carbon standard, we have the framework in place for us to do this.

“The other important part of the jigsaw is the data. Unless we have easy access to accurate and consistent carbon emissions data, and a place where we can share learning and experience, we will never truly understand if we are making the right decisions.”

The built environment is responsible for almost 40% of greenhouse gas emissions globally, which means the construction industry’s role to play in addressing the climate emergency cannot be understated.

However, a lack of unity in how the industry approaches the problem is the greatest barrier to finding effective solutions. The collaborative nature of BECD, using a consistent methodology and it being accessible to all parts of the industry, has been fundamental.

Fiske said: “It has been a real joint industry effort, with all of the organisations and people who have generously given up their time through working groups or consultations, to get us to this point. The key now is that we push forward. If we are truly going to reduce our environmental impact, we need the industry to come together to share data and experience through BECD.”

Fabrizio Varriale, Place and Space Analyst at RICS, is chair of the BECD’s working groups, tasked with technical development of the database.

He said: “Poor data quality and the lack of standardisation and transparency in reporting practices are acknowledged as major barriers to a wider uptake of carbon assessments in the built environment.

“BECD aims to help the industry by providing a platform to report and retrieve the results of building carbon assessments.

“This will allow data sharing across the industry and the harmonisation of reporting practices in alignment with the RICS Professional Standard on Whole Life Carbon Assessment.

“Over time, the granularity of the project data collected through BECD will enable the industry to produce accurate benchmarks for specific project types and stages. BECD will also help professionals who are conducting carbon assessments by providing a uniform catalogue of product data, bringing together different sources of product life cycle assessments and environmental product declarations.”

BECD will launch on Thursday 5th October with a live webinar in which a panel of experts, including James Fiske and Fabrizio Varriale, will talk about the development of BECD, how it works and, most importantly, how the industry can access and use it.

You can register here to join and visit www.becd.co.uk for more information about the database and the members of the steering and working groups.

For more information about BCIS, visit the website at www.bcis.co.uk

The post Construction Leaders Advise Data Our Strongest Ally in Decarbonising Built Environment first appeared on Property Insider.

Current figures from Knight Frank show that demand in London remains strong and the number of new prospective property buyers registering in the UK was 10% above the five-year average in February and the number of offers accepted was 42% higher.

The prime central London property market in particular far outperforms any other in the UK when it comes to international buyers, with recent statistics from Barclays showing that almost half of all purchases in the UK’s capital city are now made from overseas.

In the wake of a global pandemic and economic and political uncertainty, the London property market has continued to prove its resilience in the face of adversity by drawing in prospective buyers from across the globe.

Leading UK property developer, SevenCapital delves into the top four ways London continues to attract international buyers:

1.Long term capital appreciation

Property prices in London have grown considerably over the last ten years, with data from Land Registry showing the purchase value of the average residence in the capital city has grown by over 66% since 2013, increasing in value from approximately £322,324 to £535,212. 

With house prices showing no signs of faltering, and with property always considered a relatively safe investment, the London property market offers a strong outlook for long term capital appreciation, despite concern regarding current UK market conditions.

2.Strong rental yields

With demand continuing to outweigh supply, rental price growth remains at a record high, with average rents in prime central London rising by 17.8% year-on-year in October 2022, and prime outer London a comparable 15.4%, according to Rightmove.

The average gross rental yield for prime central London for October was 3.72%, the highest recorded since 2011, while in prime outer London it sat at its highest since 2013 at 3.74%.

Looking ahead to 2023, these findings are further supported by recent figures from Savills which show that London remained the region with the greatest annual rental growth at 14.2% in March 2023.

For those looking for to put their money into property, London continues to be a sure bet in the rental yield stakes with the average property asking rent in London sitting at £2,343 pcm at the end of last year and strong demand for rental properties still dominating the capital in 2023.

3. Strong demand for the British education system

According to figures from Erudera, the UK is the second most popular nation for international students worldwide, with over 679,970 international students opting for the UK in 2022. In fact, University College London has the highest number of international students, both from EU and non-EU countries, with a total of 24,145.

The British education system has a lasting reputation of having one of the highest education standards globally, something which continues to draw in international buyers looking to capitalise on the crème de la crème of higher education.

4.Desirability of London as one of the top global finance, business and cultural centres

London and the UK continue to excel on a global stage in innovation and sustainability – ranking as joint first for its world’s leading financial centre in figures by the City of London Corporation. With over 40% of the City of London’s workforce coming from overseas, it shows no signs of dwindling in popularity with international buyers.

For tourists, London also continues to prove popular with global visitors with figures from VisitBritain forecasting a total of 35.1 million visitors in 2023, 18% higher than 2022 with a combined estimated spend of £29.5 billion.

With world class brands, 96 Michelin stars across 74 restaurants and enviable retail, leisure and cultural pursuits, as well thriving a financial business centre, London continues to draw in buyers from far and wide – something which will continue to have positive repercussions for the city’s international appeal and buoyant economy.

Buying and investing in the London property market has always been a popular choice for international buyers and we expect this to endure as it continues to prove its strength and resilience in the latter half of 2023 and beyond.

SevenCapital has been making significant moves into London over recent years, with a number of high profile residential-led sites in the pipeline, including, notably, its joint venture partnership with MARK on the £500m development at 100 West Cromwell Road in Kensington. Find out more and register for updates on this fantastic development.

For more information on SevenCapital visit www.sevencapital.com

The post London Continues To Draw In International Buyers first appeared on Property Insider.

The UK’s Purpose-Built Student Accommodation (PBSA) sector is continuing to go from strength to strength, according to global real estate adviser Savills. A shortage of supply combined with rising student numbers has resulted in strong rental performance, with over 7% growth forecast for 2023/24.  

1 million applicants expected by 2030

The latest UCAS application data reveals that the number of students starting their undergraduate degree has topped 600,000 for the second year in a row – with  618,000 starting in 2022/23 and 622,000 in 2023/24. This equates to a first year cohort larger than the population of Sheffield looking for accommodation each year.

Even more growth in demand is expected, with UCAS projecting that the UK could reach 1 million university applicants in 2030, which will place existing PBSA stock under even greater pressure.

Graph 1: Total undergraduate population is forecast to surpass 1.75 million

Source: Savills using HESA, UCAS (the projections allow for a dropout rate of 6.5%pa, the average over the past 5 years)

“The UK remains one of the key global destinations for students looking to study abroad. There are currently more than 600,000 full-time international students, up from just over 400,000 five years ago, according to figures from HESA. While there has been a fall in EU students in the wake of Brexit, this has been more than offset by significant growth in the number of students from India, as well as continued strong numbers from China and elsewhere,” says James Hanmer, Head of UK PBSA Investment and Co-living, in the Operational Capital Markets division at Savills.

“We know that strong application figures from these countries are a huge positive for PBSA demand: international students are 60% more likely to live in PBSA than domestic students, with those from India more than twice as likely.”

Significant shortage of stock in some markets

Regulatory and tax changes have seen the number of buy-to-let mortgage redemptions reach over 300,000 since 2017, and as a result there are currently 31% fewer 5+ bed properties listed for rent in Q1 2023 compared with the pre-pandemic average.

This creates an even greater need for PBSA, and yet the total pipeline of new stock is only 144,000 beds nationally (on schemes with at least 20 beds), according to Savills analysis of data from Glenigan, with only a quarter of these under construction. As a result, occupancy levels are at record highs, supporting rental growth of around 7%, according to Unite and Empiric, which is expected to drive continued strong investment returns over the coming years.

Savills PBSA Development League Table indicates particularly strong development opportunities in Canterbury, Durham and Glasgow (around the University of Glasgow), all of which have seen strong growth in their student populations, with the former two also seeing rising applications, which will put pressure on existing stock. They have been promoted to First Class in the Savills league table, joining Bath, Birmingham, Brighton, Edinburgh, London, Manchester, Oxford and St Andrews, all cities with very high student demand.

Southampton, Bournemouth and Cambridge have moved up to the Upper Second tier of the Savills league table, as rising student numbers put pressure on existing stock and with a relatively limited pipeline of new schemes to meet those increases.

Investment activity remains strong despite the challenging backdrop

In spite of the weaker macro-economic backdrop, which saw overall real estate investment in the UK down by -14.2% in 2022, PBSA bucked the trend with a record-breaking £7.8 billion of stock traded – an increase of +89% on 2021 figures.

Over the past three years, 82% of investment in UK PBSA has come from overseas, with investors from USA and Singapore accounting for 47% and 24% respectively over this period.

While investment has been limited to date in 2023, activity is expected to pick up in the second half of the year, supported by rising rents, which are offsetting the challenges faced, including operational cost increases. Savills recent European Living Investor Survey found that around two-thirds of investors are looking to deploy more capital into PBSA over the next three years. Of investors looking to expand in the sector, close to a fifth expect to deploy more than €500 million by 2025.

“The current supply and demand dynamics create a compelling opportunity for investors to deliver much-needed new PBSA, in particular to target the growing domestic student population. The underlying student growth demonstrates the long-term demand for PBSA and underpins the attractiveness of investment in the sector,” comments Richard Valentine-Selsey, Head of European Living Research & Consultancy at Savills.

“While build costs increased significantly over the past two years, reaching just under 10% in 2022, putting pressure on the deliverability of some schemes, the latest forecasts suggest that the worst of the price rises are behind us. Tender price inflation is forecast to fall back to just 2-3% per annum for 2023 and 2024, which should bring some confidence and increased viability back to the development of new PBSA stock.”

Savills latest research also highlights that despite economic environment and implications of higher interest rates, early indicators from the debt market in 2023 reveal that demand from lenders to finance both development and investment opportunities in the PBSA sector remains strong, particularly for quality projects and strong sponsors.

Charlie Bottomley, Director in Savills Debt Advisory team, said, “All lenders, including banks, insurance companies and debt funds, are showing considerable appetite for the sector, as they recognise its resilience and strong rental growth performance. Interestingly, the increase in base rates has created a convergence of pricing between bank and nonbank lenders, particularly for development finance. For a marginal increase in all-in debt costs, non-bank lenders are offering a meaningful increase in leverage, which typically results in a positive impact on equity IRR”.

The post Investor appetite for student accommodation remains strong, as the UK expects to hit 1 million university applicants a year by 2030 first appeared on Property Insider.

Why buy to let is here to stay

Buy to let has come under a lot of pressure in recent years, with changes to tax allowances, the stamp duty premium, interest rate rises and more regulation of the sector.

However, at the end of the day buy to let investment continues to be underpinned by strong fundamentals. So there are lots of good reasons to suggest that renting will be more popular than buying for a long time yet – and that there’ll always be a good demand for rented property – and for buy to let investors to provide it.

Consider some of the buy to let facts:

* Renting is now the only option for millions of people who simply can’t afford a deposit – let alone a mortgage.

With household budgets set to be tight for the foreseeable future and much economic uncertainty it’s difficult to see things changing anytime soon.

* Prices in some areas are now so high that renting is the only realistic way to find accommodation.

For decades, big cities like Paris, Tokyo and New York have been largely rental-only locations. Many areas of London are now unaffordable to the majority of owner-occupiers with the likelihood that many more, plus other popular parts of the UK, will also become completely off limits to those wishing to buy.

* It can actually be cheaper than buying. Some reports suggest buying is slightly cheaper, others suggest renting is slightly cheaper. Whatever the truth, there’s not much of a financial advantage in buying a home right now.

* The days of free-and-easy, write-your-own-cheque mortgages have gone for good. Stress testing means that lenders are being much more choosy about whom they lend to and how much they’ll lend.

* Renting a home can be much less hassle than buying. Often overlooked, this can be a significant attraction for many tenants. Those like busy working people, families and singles. There’s no dealing with breakdowns and no regular maintenance like painting and decorating to bother about.

* Renting offers flexibility that buying can never match. Those who need to move for work, to study or for personal reasons, who want to upsize or downsize, can move quickly and easily when they rent a home.

As a tenant, you never get stuck in a protracted chain waiting for your house to sell, your buyer’s house to sell and so on. You can move into a new home with just a few week’s or even day’s notice. Almost total freedom!

Even if everybody who wants to buy a house then this market alone would still be an absolutely huge market to serve for buy to let landlords.

In my opinion it’s no exaggeration to say that renting is much more than just a passing trend. Renting is and will continue to be a good choice for tenants for years to come – and continue to be a wise investment for well informed, well organised buy to let investors.

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The post Fundamentals Suggest There Will ALWAYS Be A Demand For Buy To Let first appeared on Property Insider.