Tag Archives: british
Owners of empty homes should be hit with extra tax, new research note suggests
Britain's housing crisis is being made worse by hundreds of thousands of homes left empty, according to a new report from the Institute of Public Policy Research. The report argues that giving local authorities power to increase tax on empty homes would ensure more become occupied and bring England into line with Scotland. The report shows that there are 635,000 empty homes across England, including 216,000 that have been empty for over six months. In London, where house prices and rents are especially high, over 60,000 homes are empty, including over 20,000 that have been empty for over six months. The report argues that local authorities should be offered an enhanced set of powers, including removing the 50% premium cap from council tax on empty homes. In effect, this would allow local authorities to determine their own banded council tax premiums on long term empty homes, the report explains. It also says that local authorities should have the discretion to define what a long term empty property is, including the ability to shorten the timeframe that defines eligibility for the discretionary tax to one year rather than two, and the freedom to determine what constitutes the inhabitation period that restarts the clock. The report argues that discretion over these two features would allow local government to account for differences in housing market dynamics, such as the common length for property voids and the scale of housing need in the local area. In Scotland long term empty homes are defined with a one year threshold rather than two years in England and the length of time a property would need to be inhabited to reset the starting gate is three months instead of the English standard of six weeks. The report argues that England should be brought into line with Scotland and that this would get more homes occupied, rather than act as a revenue raiser, but if there was no response from empty home owners, a premium of 70% of a Band D Council Tax payment would result in a charge of around £1,000 and draw in an additional £110 million nationally. This would be around £11 million across London, it claims. The report says that local authorities could then channel these extra funds into their local housing markets. The report also models a tougher approach that could raise as much as £215 million a year. ‘Long term empty homes are a luxury England cannot afford. With rising house prices, substantial levels of homelessness and lengthy housing waiting lists, empty homes are making the housing crisis worse,’ said Bill Davies, IPPR researcher. ‘Short term vacant properties are a natural part of the housing market. Properties will be without residents as estates are disposed of, as sellers await buyers, or as landlords await new tenants. But when properties are left empty over the long term it increases pressure on rents and house prices,’ he pointed out. ‘Local authorities should be allowed more discretion to tax long term… Continue reading
Year ahead set to see more British buyers in popular European markets
Rising confidence and a resurging pound are set to boost overseas property market as British buyers once again look for homes overseas, it is claimed. According to Clare Nessling, director at overseas mortgage specialist Conti, excellent buying conditions have lured Britons back into the overseas property market this year, with bargain property prices and historically low mortgage rates making it more affordable than ever. She pointed out that the biggest boost to buyers’ budgets, however, has been the steadily increasing value of the pound against the euro, which is effectively shedding tens of thousands of pounds off property prices in the euro zone. And buyers, full of fresh optimism, are returning in their droves. ‘It’s perhaps no surprise, therefore, that our enquiries have increased by 24% this year, compared with 2013. The first half of the year was particularly busy, with enquiries up by 58%, levelling out again in the third quarter, largely due to the uncertainty surrounding the Scottish referendum result. Overall, however, interest is much stronger than last year and there’s definitely more optimism amongst potential buyers,’ she explained. ‘When you compare the cost of a place in the sun with overheated parts of the UK market, there are plenty of British buyers who are more willing to explore overseas opportunities in their search for better investment potential. Confidence is back,’ she added. She also pointed out that with Goldman Sachs predicting that sterling will continue to climb against the euro over the next three years, British buyers will simply have more buying power, making a bolt hole in the sun even more tempting.’ The relaxation of pension rules, which come into effect in April 2015, could also lead to more people releasing pent up funds and investing them in a foreign property purchase,’ she said. The firm believes that Spain is well and truly back on the map. It accounted for 49% of enquiries received at Conti this year, and the volume of Spanish mortgage enquiries has increased by 54% over the last 12 months. After a turbulent few years in the eye of the euro zone storm, the country appears to be making a turnaround at last. Conti’s report says that the economy is showing signs of recovery, tourist numbers are up, and after years of plummeting house prices, experts are predicting increases in 2015, with prices in some areas rising already. ‘I expect Spain to maintain this momentum next year as prices recover but remain very affordable,’ said Nessling. France remains a firm favourite too, accounting for 32% of enquiries this year, and continues to offer a safe haven for British buyers. ‘A slower property market has been pushing prices down, and under current market conditions, people are keener to sell and therefore more likely to be receptive to offers lower than the asking price,’ explained Nessling. ‘With mortgage rates at their lowest in more than 60 years, it’s a buyer’s market. But it could be wise… Continue reading
UK residential market set to see widening gap in demand and supply in 2015
Next year is set to see a widening gap between demand and supply as not enough new homes are being built, according to members of the National Association of Estate Agents (NAEA). Almost half of NAEA members predict a rise in demand for housing in 2015, however demand was down by 4% in November, the association’s latest report shows. It also says that interest rate rises, changes to stamp duty, and the general election, will cause the biggest impact to the residential property market in 2015. Despite recent government announcements to build more new homes, some 46% of NAEA agents think that demand for property will increase next year, while members were split on whether the same could be said for housing supply. The association said it is worrying that 21% think levels of stock will decrease next year and 33% expect them to stay the same, which, combined with a rise in demand, will mean a heightened housing shortage. However, 33% of agents were much more optimistic, stating that housing supply would increase next year, albeit still not enough to meet the rising level of demand. When asked what events in 2015 will have the biggest impact on the housing market, the top three greatest influences were base rate rise at 34%, changes to stamp duty at 32% and the general election at 32%. ‘With agents predicting the housing shortage crisis to potentially worsen in 2015, the general election will be a pivotal event for the housing market next year, with all three main parties pledging to build more homes should they be elected,’ said Mark Hayward, NAEA managing director. ‘We have already seen the current government put policies in place in an attempt to tackle the problem, with the announcement of new garden city developments, as well as the reforms to stamp duty, another change our members believe will influence the market next year,’ he explained. ‘While we do see these changes as a step in the right direction and believe that stamp duty reform will allow for greater supply in the market by encouraging more people to buy and sell, these changes are still not enough. The lack of capacity within the current market means that the gap between supply and demand probably won’t close for some time. We currently don’t have the resources to respond to the problem, and this is another issue that needs addressing,’ he added. The report shows that demand in November 2014 was down 4% on October, from 380 house hunters registered per branch to 364 in November, the lowest levels recorded since March this year. A similar lull in supply also occurred, with the average number of properties available per branch down to 50 compared with 53 in October. Following suit, the number of sales agreed per branch was also down, with agents reporting an average of eight sales per branch, compared to nine in… Continue reading
