Tag Archives: europe
Renting a home in the US less affordable than ever, new research suggests
Renting a home in the United States is less affordable than ever before with tenants paying 30% more of their income on paying for their home compared with home owners at 15%, new research shows. Mortgages remain affordable by historical standards while rent is unaffordable in three quarters of housing markets, especially high demand locations in Miami, San Francisco and San Jose, according to the latest report from real estate firm Zillow. It also shows that rental affordability worsened year on year in 28 of the 35 largest metro areas covered by the Zillow index while Denver, Los Angeles, San Francisco, San Jose and San Diego are unaffordable for both renters and buyers. Overall in the second quarter of 2015 renters paid some 30.2% of their monthly income toward rent, the highest percentage ever. Before the real estate downturn tenants could expect to spend about 24.4% of their incomes on rent. In contrast, buyers pay 15.1% of their income towards mortgage payments, which is still less than what they spent historically. From 1985 through 2000, home owners spent about 21.3% of their monthly income on mortgage payments. In Denver and four California metros, both renters and buyers can expect to pay more of their income towards either rent or mortgage payments than in pre-bubble years. In San Jose, renters and buyers should each plan to put about 42% of their incomes towards housing. ‘Our research found that unaffordable rents are making it hard for people to save for a down payment and retirement, and that people whose rent is unaffordable are more likely to skip out on their own healthcare,’ said Zillow chief economist Svenja Gudell. ‘There are good reasons to rent temporarily, for example when moving to a new city, but from an affordability perspective, rents are crazy right now. If you can possibly come up with a down payment, then it's a good time to buy a home and start putting your money toward a mortgage,’ added Gudell. The Zillow report says that mortgage payments will continue to be affordable even if mortgage rates rise as expected. If rates reach 6% next year, home buyers can still expect to spend 30% or less of their income on mortgage payments in 265 out of 290 or 91.4% of the metros Zillow analysed, and mortgage payments will be considered more affordable than in pre-bubble years in 72.1% of metros. Rents, on the other hand, are already unaffordable compared to historic norms in 77% of metros, and with relatively stagnant wage growth, this likely won't improve as rents keep climbing. Continue reading
Half of UK landlords set to be affected by wear and tear tax change
Almost half of landlords in the UK will be affected by the removal of the annual wear and tear allowance announced recently in the summer Budget, research has found. According to new findings from the National Landlords Association (NLA) the change which is due to take effect in April 2016 will affect 47% of landlords. It says that 24% of landlords let their properties fully furnished, 22% are letting a mixture of furnished and unfurnished properties and 53% let their properties on an unfurnished basis. The annual wear and tear allowance is currently available for furnished properties and it will be replaced with a tax relief system that enables all landlords to deduct the costs they actually incur on replacing furnishings in the property. The new system, currently under consultation until the 09 October 2015, will apply from 06 April 2016 for Income Tax purposes and 01 April 2016 for Corporation Tax, and will cover the cost of replacement furniture, furnishings, appliances and kitchenware provided for tenants. This will include movable furniture and furnishings, televisions, fridges and freezers, carpets and flooring, curtains, linen, crockery and cutlery. ‘We fully understand the frustration of those landlords who let exclusively on a furnished basis as the removal of this allowance will very likely represent a reduction in the relief they can claim,’ said Chris Norris, NLA head of policy. ‘However, it will come as a welcome revision for those letting a mixed portfolio, unfurnished, or part furnished property as the replacement system will allow them to deduct legitimate revenue expenses in the future,’ he pointed out. ‘The NLA has broadly welcomed these proposals as it should lead to a fairer system for more landlords. However, as we transition from one system to another, we will push to make sure that any landlords who’ve made recent investments with the expectation of offsetting the cost over a number of years using the current allowance, will not be disadvantaged,’ he added. Continue reading
Land owners in Scotland urged to register voluntarily for new mapping process
Registers of Scotland (RoS) is to work with Scottish Land and Estates to make sure that landowners in Scotland are part of the process that will see all privately owned land registered and mapped by 2024. The Scottish Government has asked RoS to complete the country’s land register by 2024 for privately owned land and property and by 2019 for publicly owned titles. At the moment, around 58% of all Scottish properties are on the register and around 27% of Scotland's land mass. Almost all the remaining properties are held on the General Register of Sasines. Property currently transfers from the Sasine to the Land Register through change in ownership, or by the owner voluntarily applying for registration. However from April next year this register will close to standard securities, such as a remortgage, and any change to title will automatically come on to the land register. Landowners are being urged to register their land voluntarily with officials pointing out that benefits will include clarity of title on the map based system, which provides greater certainty and security about what is owned. A voluntary registration also includes a state backed warranty of the information contained in the title deed. The Keeper of the Registers of Scotland has a new lever known as Keeper Induced Registration (KIR) where she can register land and property with no involvement of the owner. The details of how this process will work have yet to be finalised and a public consultation will be held later this year. ‘Our commitment is to take reasonable steps to ensure that ownership of land is visible and to ensure that landowners or their named representatives are accessible and contactable,’ said David Johnstone, chairman of Scottish Land and Estates. ‘As owners and managers of land, members are concerned about the process and professional costs of voluntary or keeper induced registration of title and in particular the impact of any changes from a practical perspective. In general, we are concerned to ensure the integrity and accuracy of the land register for landowners across Scotland and will continue to work closely with Registers of Scotland as it progresses this work to achieve its target,’ he explained. Charles Keegan, head of Land Register Completion at Registers of Scotland, said that when titles are added to the map based public register, RoS will provide a title sheet that provides greater clarity on what is owned and should make any future transactions quicker and easier. ‘We look forward to continuing to work with Scottish Land and Estates members going forward on registering their titles and would encourage anyone with an interest in voluntary registration to get in touch with the team,’ he added. Continue reading
