Tag Archives: crisis
House prices in Scotland up twice the rate of England and Wales
House price growth in Scotland is outpacing that seen in England and Wales with values up 0.8% in November, twice the rate seen in the rest of the UK. This takes the average price of a home in Scotland to £169,850, up 2.4% compared wot November 2014, according to the latest index from Your Move. East Renfrewshire had the biggest upswing as new home developments lifted prices 5.2% since October and overall it was the strongest November for home sales since 2007 with transactions up 13% year on year. According to Christine Campbell, Your Move managing director in Scotland, the rise provides a welcome bounce back for home owners after a turbulent year but house prices are still below March’s record peak. The driving force behind this up and down has been the introduction of the Land and Buildings Transaction Tax (LBTT) last April which while lowering tax for the vast majority of buyers has hit the top end of the market. However, as high end housing stock starts to shift again, price rises are strengthening in more expensive areas but Campbell warned that the growth spurt may be short lived with the 3% surcharge on second home and buy to let property purchases coming into force in April. ‘If the impact of this tax increase mirrors the effect of the LBTT, we may see a sharp spike in values at the start of 2016 as buy to let buyers rush to avoid the tax hike, followed by a sudden dip after its introduction,’ said Campbell. ‘Investors may well be dissuaded from purchasing additional properties then, with a £250,000 home liable for an extra £7,500 in Stamp Duty once the tax is implemented. Sellers may find themselves having to subsequently reduce prices to make their properties more attractive, accounting for the higher surcharge for some buyers. There have been cases of some developers offering £10,000 contributions towards the LBTT in order to sell their units,’ she explained. The data also shows that on the back of strong monthly growth in October, East Lothian has now overtaken Inverclyde as the mainland region with the highest annual increase in property prices at 10.9%. ‘This region illustrates the recovery in the top end of the market with 30 sales of properties worth over half a million pounds in the last three months, a significant improvement on 18 sales in the same period last year,’ said Campbell. ‘The most notable of the sales was a nine bedroom property going for £2.6 million, the second most expensive property sold this year. This marks a clear turning point when you consider the drought of million pound home sales immediately after the introduction of the LBTT,’ she pointed out. She also explained that November’s home sales have defied the odds by avoiding the usual seasonal slowdown. Transactions increased 1.2% month on month in a period where there is usually see a 4% dip. South… Continue reading
Quarter of UK buyers would consider a home on a flood plain despite recent floods
With the UK again being hit by bad floods this winter new research has found that a quarter of buyers would consider properties on known flood plains. The research from HouseSimple also found that of those who would buy on a flood plain some 65% would want a price discount of at least 21%. The poll asked respondents whether they would buy a home next to one of 17 undesirable locations including a prison, rubbish tip, busy school and electricity pylons. Just 16% said they would buy near or next to a rubbish tip. And of those who would 37% said they would seek a discount of at least 31% on the typical asking price of a property in that area. Some 48% of buyers would consider a property on a busy flight path and 36% would consider a property near a cliff susceptible to erosion. Of those who would, half would expect at least a 31% reduction in the asking price. Blights that buyers were less concerned about included, wind turbines or solar panels, next to or near a school and above a restaurant or take away. ‘We have all seen in vivid detail just how devastating the floods have been over the past month. Flooding seems to becoming a more regular occurrence, and prospective buyers are likely to be more aware of the risks associated with buying a property on a flood plain than maybe they have been in the past,’ said Alex Gosling, the firm’s chief executive officer. ‘Home owners looking to sell a property on a known flood plain may well need to be willing to discount hard if they want to secure a quick sale and it is no surprise that living next to a rubbish tip came out at the bottom of the heap,’ he pointed out. ‘No-one necessarily wants to live next door to a rubbish tip or under a busy flight path, but sometimes budget constraints mean that might be the only option, particularly if you want to buy your dream property or you’re a first time buyer,’ he explained. ‘If you are buying a property that is in an undesirable location, make sure you do your research. The last thing you want to do is buy something that you regret buying soon after and then struggle to sell. Saying that, at the right price, you could get far more for your money than you would a few streets away, if you’re willing to compromise on the undesirability of the location,’ he added. Continue reading
Scottish property industry wants more details of extra second home tax
There are calls in Scotland for further details on the extra 3% stamp duty tax to be made public as the introduction of the additional rates on top of LBTT is creating confusion. Towards the end of last year Scottish Finance Minister John Swinney announced as part of the Scottish budget that second homes, including buy to let, would face an additional 3% levy on top of the Land and Buildings Transaction Tax from April 2016. However, despite the introduction of the new tax being just months away there remains much confusion amongst landlords as well as buyers and vendors generally. The intention of the levy is to charge a higher rate on each band of LBTT if at the end of the day of the transaction an individual owns two or more residential properties. However, the higher rate will not be charged if the purchaser is replacing their main residences. The Scottish Government are keen to ensure that there are sufficient affordable opportunities for first time buyers to enter the property market but the surcharge is a blow to landlords who have also recently suffered the loss of the buy to let tax relief. George Lorimer, partner at CKD Galbraith, believes that the new levy will undoubtedly lead to a rush of buy to let purchasers looking to beat the April deadline, then to an anticipated drop in sale prices post April with sellers likely to be the ones bearing the lion’s share of the additional costs of the levy. ‘However, given the complete lack of real detail currently available about the new tax, those who do rush to buy or sell property before April are doing so without knowing exactly what the new rules will be. There are many anomalies requiring clarity but the silence from the Scottish Government has been deafening and there is little time left to debate the details of the new tax,’ he said. ‘Specific questions need to be answered on issues such as property owned by married couples and civil partners, second homes outside of the UK and also the logistics of joint purchases, just to name a few. Whilst as a firm we are well placed to advise our clients and those thinking of selling or buying before April, more information is urgently required to allow for informed decisions,’ he explained. The surcharge is also expected to impact tenants as rents increases to cover costs or less well-off landlords decide to sell rental property. Bob Cherry, partner at CKD Galbraith, pointed out that the new levy will have implications for current landlords looking to sell as well as act as yet another deterrent to would be landlords thinking about the market as an investment opportunity. ‘This measure, like the LBTT rises introduced earlier this year, is also a wealth tax on owners as buyers of buy to lets will seek to pass on the extra purchase costs by reducing the price they are prepared to… Continue reading
