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Scotland sees 9% quarterly rise in £1 million plus properties
The number of £1 million plus residential property sales in Scotland rose by 9% quarter on quarter in the final three months of last year according to a new analysis. A report from Knight Frank based on official data shows that the number of sales in this sector increased as the year progressed, with a sharp jump in sales during the second half of the year. Indeed, the total number of sales completed in the final three months of 2014 was 88% higher than the period between April and June and more than double the number recorded over the opening three months of the year. During the final quarter of 2014, £1 million plus sales took place in 11 different local authorities, led by Edinburgh, which accounted for 47% of the total sales over the three month period. This was followed by East Dunbartonshire with 13% and Fife with 11% while over the full 12 months of the year, Edinburgh accounted for 48% of all £1 million plus residential sales in Scotland, followed by Aberdeen City at 17%. According to Oliver Knight, of Knight Frank residential research team, the rise in high value property sales last year can be attributed to two factors, both of which have played a key part in boosting transaction volumes at this level of the market. Firstly, the market has responded to the certainty provided by the result of the independence referendum. ‘After months of doubt about the outcome, buyers felt more secure about making a decision to move house or purchase a property,’ he explained. Secondly, the announcement of the proposed Land and Building Transaction Tax (LBTT) rates in October shed light on how purchase taxes would rise in April 2015, especially for more expensive properties. ‘Buyers now have a window when purchase costs are lower, especially given the changes made to stamp duty at the Autumn Statement in December, and many are taking advantage. From April this year, when the new LBTT rules come into force, a buyer of a property valued at £1 million will pay nearly £35,000 more in purchase taxes,’ said Knight. ‘We expect that the extra impetus for buyers of property valued above £1 million to complete sales before the new LBTT levy comes into force in April will mean the number of high value property sales continues to rise for several months. Even with the new higher purchase taxes, the relative cost of property in Scotland compared to London and the South of England means there is still a large effective discount for buyers making the move north,’ he added. Ran Morgan, head of Scotland residential at Knight Frank, pointed out that the appetite for prime property, certainly in Scottish cities, remains high. Edinburgh continues to lead the way with the highest number of sales, followed by Aberdeen. ‘Despite forthcoming higher levels of tax, Scotland still offers excellent value compared with London and the south. Because of this we expect the… Continue reading
Weaker demand from overseas buyers hits London prime property market
Prime property prices in London fell by 4.3% in the last quarter of 2014 due to weaker demand from international buyers, a new analysis suggests. This weaker demand is driven by actual and potential tax changes as well as shifts in the relative value of the exchange rate, according to the report from residential data firm Hometrack. It points out that overseas buyers of prime central London property saw capital values rise by 80% over the last five years. The drop in the value of sterling between 2007and 2009, combined with a 17% fall in property prices made London look very good value to overseas buyers with extremely strong demand in 2009 and 2010. Changes in currencies have delivered even stronger gains, it explains. Russian buyers have seen the biggest gains on the weakness in the rouble in the last six months. However, rouble backed buyers who do not already own London property will now find it much more expensive to buy which looks set to impact demand and pricing levels with a drop in prime London prices in the last quarter of 2014. On top of this overseas buyers in this sector now face paying more in property tax due to changes announced at the end of last year to UK stamp duty levels. Talk of a mansion tax being introduced after May’s general election is also affecting the market. But the report also points out that prices in this sector have climbed much faster than other markets with the London region as a whole seeing prices rise by 59% in the last five years compared with prime London’s 80% and the UK as a whole just 34%. ‘While prime London property prices have grown by 80% in the last six years, changes in currencies can boost the gains for overseas buyers,’ said Richard Donnell, director of research at Hometrack. ‘This is good news for those overseas buyers who already own property but it can make London look less affordable for those who do not own housing. Fluctuations in currencies together with tax changes and the threat of a mansion tax are cooling demand for prime London housing and values have started to slip back as result,’ he added. Continue reading
Consultation launched on speeding up UK planning change
UK planning and housing minister Brandon Lewis has proposed new measures to speed up the planning system and provide new homes more quickly. He explained that so-called section 106 agreements, which attach conditions on a planning permission being granted, can often lead to extended negotiations that delay the planning application process. Now Lewis is seeking views on plans to speed up the process, getting planning permission agreed and workers on site more quickly. He said they can add months to the planning process and stalling work on the homes communities want. ‘Section 106 planning agreements can bring great benefits to local communities but too often they drag out planning applications for months. I’m proposing measures that will speed up the process, get planning permissions granted quicker and workers on site earlier, all the while keeping the community benefits that these agreements can bring,’ he explained. Section 106 agreements put requirements on planning applicants to make the proposals suitable for the area. These include mitigating a scheme’s impact such as through requiring improved transport to service it, providing an affordable housing element or requiring contributions from the applicant to be spent on other local schemes. The proposals are now open for consultation and include setting clear time limits so section 106 negotiations are completed in line with the existing eight to 13 week target for planning applications to be processed rather than letting them slow the whole planning process down. They also include requiring parties to start discussions at the beginning of the planning application process, rather than the current system where negotiations can often start towards the end. There are plans for a dispute resolution process where negotiations stall preventing development, using standardised documents to avoid agreements being drafted from scratch for each and every application and potential legislation in the next Parliament to give the new measures teeth. Lewis pointed out that this is the latest in a range of measures the government has taken to improve the planning system. Others include introducing the National Planning Policy Framework to cut more than 1,000 pages of planning guidance to around 50 and making it easier to convert existing commercial and retail buildings for residential use. Also on the agenda is removing the requirement for affordable housing and other contributions from small developers, saving up to £140,000 per home and at the same time maintaining strong protections for the green belt, which continues to prevent urban sprawl. The consultation on these proposals runs until 19 March 2015 and also seeks views on removing the need to contribute to affordable housing where a developer is building student accommodation. Continue reading
