Tag Archives: asia
UK landlords set to invest less ahead of tax changes
Private sector residential landlords in the UK are strengthening their credit profiles as they shift investment away from new acquisitions and towards the upgrading of existing portfolios, a new report suggests. Following announcements from the government last year that tax relief on rental income would be reduced, and stamp duty increased on buy to let purchases there has been a fall in buying intentions in the first quarter of 2016. The latest Private Rented Sector Trends report from Paragon Mortgages shows that just 9% of respondents intend to purchase a property over the next three months, down from 14% in the previous quarter. The report explains that this reduction coincides with rising levels of awareness about the implications of the tax relief changes. More than three quarters, 76%, of respondents said they now understand what the changes to tax relief will mean for them, up from 62% in the fourth quarter of 2015. Alongside scaling back on short term investment plans, landlords are also improving their credit profiles. Average levels of gearing, the value of an investment portfolio less existing outstanding mortgages, are down from 38% in the fourth quarter of 2015 to 36% in the first quarter of 2016. The research report also show that some 67% of landlords surveyed have borrowings of less than half the value of their investment property portfolios. Affordability levels are also improving with landlords spending, on average, 28% of their rental income on mortgage repayments, while 51% spend less than a quarter of their rental income on mortgage repayments. Returns are also very stable with the average net rental yield remaining at 4.7% for the third consecutive quarter. The latest data also indicates that landlords are considering upgrading existing portfolios. Asked whether, as a consequence of reduced tax relief on rental income, landlords would reduce maintenance of their properties, just 12% said they would, down from 25% in the fourth quarter of 2015. On the question of whether landlords would make fewer improvements to their properties, just 14% said they would make fewer improvements, a figure more than halved since the previous quarter when it stood at 31%. ‘The PRS is facing the prospect of a great deal of change as a result of the significant shift we have seen in fiscal and regulatory policy,’ said John Heron, director of mortgages at Paragon. ‘Some landlords are responding to this uncertainty by planning fewer new purchases and investing in their existing portfolios. At the same time credit profiles are very robust and improving, a picture that is somewhat at odds with the picture being painted in some quarters,’ he explained. ‘If landlords materially reduce investment, those that have to rely on the PRS for a home could be hit quite hard. It may well become even more difficult and expensive to rent a home with no obvious commensurate benefit to home owners,’ he added. Continue reading
Sales of residential land in Australia falls as prices rise
Residential building land in Australia has increased in price but availability is falling, making it more and more difficult for builders to provide affordable housing, it is claimed. In the last quarter of 2015 the number of residential lot sales across Australia fell by 1.6% while the median lot prices increasing by 5.2% to $234,600, according to the latest edition of the HIA-CoreLogic RP Data residential land report. Land supply pressures were more pronounced in the capital cities, with lot sales falling by 2.3% during the quarter and the median lot price rising by some 6.6%. A breakdown of the figures show that vacant residential land sales are estimated to have fallen in Sydney by 22.3%, in Brisbane by 20.1% and in Perth by 7.2%. Elsewhere, the level of sales increased. In Melbourne sales were up by 13.2%, in Adelaide by 27.5% and in Hobart by 7.2%. ‘Conditions in the residential land market are making it more and more difficult to deliver the new housing stock that Australia needs. Once again, we’ve had another quarter of dwindling land lot sales and pretty stiff price increases which is evidence of insufficient supply,’ said Shane Garrett, HIA senior economist. ‘We need much greater emphasis on the delivery of new residential land supply involving better models for infrastructure delivery and a real sense of urgency in the planning process,’ he pointed out. ‘Housing costs are one of the biggest components of most households’ budgets and needlessly jacking land prices up through inaction on supply will make for real hardship over the long term,’ Garrett added. CoreLogic RP Data research director Tim Lawless, pointed out that the number of vacant land sales has fallen by 14% in 2015. ‘While the fall in vacant land transactions is substantial at a national level, the drop has been more severe across the capital cities where housing demand is the highest. Land sales were down 19% compared to the same quarter a year ago across the combined capitals,’ he said. ‘If the drop in land transactions was attributable to lower demand we would expect a commensurate fall in selling price. In fact the opposite is true; land prices are rising in the context of lower sales which suggests a supply shortage is at play,’ he added. ‘The ongoing challenge for state governments is to ensure a sufficient release of residential land that is located in desirable locations and well connected by transport infrastructure to major working centres and necessary amenities like schools, health care and retail precincts,’ he concluded. Continue reading
British people dream of a four bedroom home by the sea equipped with high tech
A four bedroom home near a beach or a city centre is the most sought after dream homes in the UK, according to new research. Some 45% dream of a home built to their own specifications designed by an architect or themselves but only 38% think they'll only get to live in their dream house if they win the lottery and 26% don't think they'll ever achieve it. Most people would want an array of high technology and glamourous features that costs £3 million, the research from home buyers estate agency Tepilo found. It also found that 48% would want en-suites in every bedroom and the same number a television or cinema room, while 47% want a huge kitchen with its own kitchen island and the same number a huge garden. Other top desires were walk-in wardrobes and dressing rooms, an indoor swimming pool, a conservatory or orangery, open fires and wood burning stoves, a double front door and his and hers bathrooms. Some 38% want high technology security features, and a further 35% say they'd want their dream home to contain a series of mods cons such as remote controlled heating, lighting and sound systems. Other things near the top of the list are a balcony, a relaxation room, a library, a gym, a separate granny flat or guest lodge, a wine cellar, an aquarium, a bowling alley and a bar. On a beach is the most popular location with 16% wanting a view of the sea but another 16% want to be in a city centre, 11% in the countryside, 10% in the suburbs and 9% in a village. Some 29% want four bedrooms, 27% want three bedrooms and 21% would want a house with five bedrooms. Only 11% would want six or more bedrooms. Meanwhile 14% want a cottage, 12% a huge mansion, 13% a detached bungalow, and 13% a modern home. Amazing views from the garden are important for 52%, 40% want a built in barbeque, 38% a large veranda, 34% a big garage, 30% a water feature, 30% a sweeping driveway, 30% separate out buildings and 20% a children’s play area. ‘What's also interesting is the amount of money Brits would spend on their dream home, despite money being no object. Up to £3 million seems a pretty low price to pay for the ultimate pad, but it demonstrates that we're a price orientated nation that expects value for money when it comes to property,’ said Sarah Beeny, owner of Tepilo. Continue reading
