Forum Topic

Empire House - is it really still viable?

The update on the Empire House/Chiswick Green project in the newsletter yesterday was interesting. I'm sure I'm not the only one who had remarked how there wasn't much sign of visible progress at least on the building on Chiswick High Road for some time. Hopefully the resolution of the electricity supply issue makes it less likely there will be an unfinished construction site in the middle of Chiswick.The concern must remain that they will find it hard to sell all these flats. The pool of people who have enough money to fund a purchase of over £600,000 has shrunk dramatically over the last month. This forum is blessed with a number of people who do know what they are taking about with regard to the local property market and I'd be keen to hear what they have to say.

Francis Rowe ● 1435d12 Comments

Hounslow council could always snap it up and make it available as social housing. Plenty of demand for that.

Peter Evans ● 1435d

That did occur to me and I think ultimately converting a lot of half built units to social housing will have to be part of the resolution of this crisis. However, these flats are relatively high spec and some of them have views over London which will command a premium price.As I understand it the building of more social housing is revenue negative for councils because rent doesn't cover the cost of servicing and maintenance. It would therefore be hard to explain to residents of Hounslow struggling with high interest on their mortgages why their council tax was going up because other residents were getting a cheap luxury flat.

Francis Rowe ● 1434d

I dont think there will be much shortage of people taking up the units. Reduced demand does not equal no demandCentral to everything from green space,shopping and transport. Ticks many boxes for many people

Julian Pavey ● 1434d

The plans might be high spec, but they aren’t built yet are they?

Maggie Dodge ● 1434d

They'll be fine. Maybe a slower rate of sales, incentive schemes introduced, lower return on capital than planned but in the end they will be fine.The real question is how will the smaller less robust developers,shop keepers, other independents etc manage?If history is anything to go by the answer is less certain.

Adrian Irving ● 1434d

The blocks with a view of the green will fly, surely. Perhaps those facing Sainsbo's will take a little longer to take off. But the location is 10/10.

Gordon McDonald ● 1434d

Agreed but there are three blocks in the development so only about a sixth of the units will have great views. The bulk of the flats will be very hard to shift although they should be able to get tenants for them if they switch part of the scheme to build-for-rent.Alot depends on whether the current upward pressure on rents is genuine demand or just landlords trying to recoup higher interest costs.

Jeremy Parkinson ● 1434d

Whilst waiting for a bus, I was looking across at these flats today.  Gordon, I don't think they will have much of a view of the Green with those huge trees in front!

Cindy Carloss ● 1432d

There are also plans to build on Acton Lane up from The Packhorse. Although the current buildings are very ugly (imo) the plan to build a five storey block seems a bit excessive. It will all sell just possibly a bit slower. Presumably, developers will have their eyes on Chiswick Lodge across the road where the party shop and barbers are….

Stewart Jones ● 1432d

Would be interested to hear what your confidence that these units will all sell is based on. The affordability ratios for a large proportion of buyers have been blown up the rise in interest rates and we have yet to see the impact on the secondary market of the current upheaval but it isn't likely to be very positive. This will significantly reduce the equity of any potential buyers.The landlord market is in turmoil as it is very highly leveraged and repossessions are likely to grow exponentially. They are trying to pass the cost of higher rates on to tenants but it is unclear how far they can do this and whether this can be done in the primary market.If there is yield support for the market then buyers will eventually emerge but it might take us a couple of years to get there. The government were encouraging banks to lend to developers to support economic activity during the pandemic which made some sense but it isn't clear whether they would be willing to lend to encourage them to build flats which they won't be able to sell.

Jeremy Parkinson ● 1432d

Most of the unit sales are foreign buyers. People really should should really put paid to the council (not just Hounslow) lie that this is all about homes for Londoners.

Basil Finnis ● 1432d

I made the point that these will sell but it might take longer. As you say it might take a couple of years to get there.

Stewart Jones ● 1432d