Tag Archives: europe
New buy to let tax regime set to lead to higher rents, research suggests
The majority of landlords in the UK believe the Government’s tax changes last year will discourage investment in the buy to let sector, new research suggests. Some 86% believe it will prevent investment some 90% think it will also result in higher rents and overall they believe it will ultimately lead to a shortage of available of rental homes. The research from lettings and property management company Orchard and Shipman Group also reveals that a quarter of landlords will be selling some, or all of their properties, but just 18% of landlords said they would pull out of the market all together. The research also reveals that over 90% of landlords believe they should be free to deduct legitimate costs, just like any other business. More than half of landlords surveyed said they would be raising rents in 2016 to cover the increased financing costs. ‘The Government’s changes to the way buy to let investors are taxed will inevitably impact revenue. The shortage of housing, a growing rental market and rising property prices is driving increased demand for rental properties,’ said Shane Spiers, chief executive officer of Orchard and Shipman Residential . ‘With these market conditions at play, it’s no surprise that landlords will be putting up rents to supplement their income. Unfortunately, it is tenants that will feel the brunt of the tax changes,’ he added. However, he pointed out that the Government’s ambition to make buy to let look less appealing, may yet be thwarted as many landlords and property investors are committed and passionate and will do whatever it takes to protect their interests. ‘Our research shows that the majority of landlords are looking at ways to recover the potential drop in revenue and we are advising landlords on the options available to them. I believe that the buy to let market will pull together to ensure it continues to provide much needed accommodation to meet growing tenant demand,’ added Spiers. Continue reading
Irish property prices up 0.5% month on month, but fall in Dublin
Residential property prices in Ireland increased by 6.6% in 2015 with home values outside of Dublin recovering well, the latest data shows. The figures from the Central Statistics Office show that overall the strong growth experienced in 2014 slowed considerably last year. Prices increased by 16.3% year on year in December 2014. Month on month prices were up by 0.5% in the month of December compared to a decrease of 0.5% recorded in November. However, in Dublin residential property prices decreased by 0.5% in December but were 2.6% higher than a year ago. However, a breakdown of the figures show that house prices in the city decreased by 0.5% in December. But they are 2.1% higher compared to a year ago. Dublin apartment prices were 7.8% higher when compared with the same month of 2014. However, it should be noted that the sub-indices for apartments are based on low volumes of observed transactions and consequently suffer from greater volatility than other series. Prices in the rest of Ireland rose by 1.2% in December compared with a rise of 0.7% in December of last year. Prices were 10.2% higher than in December 2014. The slowdown in price growth towards the end of 2015 means that prices are still some way down from their peaks in 2007. House prices in Dublin are 34.2% lower than at their highest level and apartment prices are 40.6% lower, while overall prices are 36.1% lower. In the rest of Ireland pries are 35.4% lower than their highest level in September 2007 and overall, the national index is 33.5% lower than its highest level in 2007. Meanwhile, IPD/SCSI quarterly property index shows that total return for Irish property was 25% in 2015, down considerably from the record breaking 40% achieved in 2014. MSCI, a provider of indexes, portfolio risk and performance analytics, also revealed that total returns from investment property hit 25% year on year in the fourth quarter of 2015, and described it as another strong year for the Irish market. This outpaced the UK market return of 13.8% as per the IPD UK Monthly Property Index with the Irish index now including residential properties for the first time since the third quarter of 2015. The office sector continued to lead the market, returning 5.6% in the last quarter to close out 2015 with a 27.1% year on year total return. The retail sector returned 20.9% and the industrial sector 21.2% for the year. Rental value growth was the key driver in the Irish market during 2015 as market rents grew by 14.4%. The index report says that strong rental value growth indicates a clear sign of business confidence in the Irish economy but also endemic of the limited supply of office space in Dublin city centre. 2015 also proved to be the year in which the Irish recovery spread nationwide, with obvious improvements in the regional retail sector and a growing demand for modern… Continue reading
Housing market confidence remains strong in the UK, latest sentiment index shows
Confidence in the UK housing market remains strong and the majority believe that property prices will be higher rather than lower in 12 months’ time. There has also been a small rise in positive selling sentiment in the final quarter of 2015 and a fall in the number who expect it to be a bad time to sell, according to the latest quarterly Halifax Housing Market Confidence Tracker index report. Despite declining steadily since last May, house price optimism in the final quarter of 2015 continued to show that a majority, +61 compared to +68 in May, think prices will keep rising with 13% believing they will be at least 10% higher. ‘Solid economic growth, rising real earnings and falls in already very low mortgage rates are all stimulating housing. At the same time, there is an increasingly acute imbalance between supply and demand, which is causing property prices to rise at a robust pace,’ said Craig McKinlay, Halifax mortgages director. ‘This situation, which is unlikely to reverse significantly in the short term, is reflected in the public’s continuing high levels of optimism regarding house price growth over the coming 12 months,’ he added. There has been a small rise in positive selling sentiment since last quarter, with 55% (+3) of people thinking the next 12 months will be a good time to sell. By contrast, there has been a drop in the proportion who expect it to be a bad time to sell, down three points in the same period, to 29% now. Positive buying sentiment has increased marginally, at 54% (+1), with negativity down two points to 31% while the proportion who think it would be a good time to buy and to sell property has risen to 39%, up three points on the previous quarter, while 15% of people think the next 12 months would be a bad time to do both. The proportion identifying rising property prices as a barrier to buying a property has risen to 37%, up six points on the previous quarter and the highest this figure has been since the survey’s inception, with average UK house prices now standing at £208,286 following a 10% increase during 2015. However, raising a deposit is still believed to be the main barrier to buying property, with 58% of people choosing this as a reason, up one point from last quarter). Job security is the number two reason, at 42%. Concerns about interest rate rises as a barrier have fallen, with only 11% of respondents mentioning this, down five points from last quarter. ‘Difficulties in raising a deposit, concerns about job security and high property prices remain the main barriers to people buying a home. The proportion identifying rising prices has risen to the highest in the survey’s history. The decline in affordability that this highlights is expected to dampen housing demand and property price growth over the medium term,’ said McKinlay. Half think mortgage interest rates will be higher in 12… Continue reading
