Tag Archives: europe
UK launches first register in the world for foreign property owners
Foreign companies already owning or buying property in the UK will have to reveal who the real owner is under new transparency rules being introduced by the government. The details will have to be disclosed in a public register, the first of its kind anywhere in the world, as part of Prime Minister David Cameron’s plan to clamp down on foreign money being ‘hidden’ in the UK. It means that for the first time, foreign companies that already hold or want to buy property in the UK will be forced to reveal the details of who really owns them and no longer be able to hide behind a company vehicle. It will include companies who already own property in the UK, not just those wishing to buy. Foreign companies own around 100,000 properties in England and Wales and over 44,000 of these are in London. ‘The new register for foreign companies will mean corrupt individuals and countries will no longer be able to move, launder and hide illicit funds through London’s property market, and will not benefit from our public funds,’ said Cameron. He added that he would like to reverse the burden of proof so that someone suspected of using stolen money to buy property can be forced to prove they accumulated their wealth legitimately or they would face having the property taken away from them by a court. France, the Netherlands, Nigeria and Afghanistan are set to follow the UK’s lead and commit introduce public registers of true company ownership, while Australia, New Zealand, Jordan, Indonesia, Ireland and Georgia have agreed to take the initial steps towards making similar arrangements. The UK’s public register will be launched next month. However, details of how the measure will be implemented or whether there would be penalties for non-compliance have not yet been published. Transparency International, the global group that fights against corruption in all walks of life, said the register was a bold step towards making it much harder for corrupt individuals to hide their money in UK real estate. ‘We strongly welcome the UK initiative to require full transparency of the companies who currently own or will purchase property in the UK, helping to close the door to corrupt cash,’ said Jose Ugaz, chair of Transparency International. ‘We welcome the fact that other countries also intend to shore up their own property markets so they don’t open the door to corrupt cash from overseas,’ Ugaz added. According to international real estate firm Knight Frank less than 2% of residential property in London is owned by offshore companies. The firm’s head of London research, Tom Bill, believes that the move means that offshore trusts and companies will reassess their property holdings following the announcement of the ownership register, and some may decide to sell. ‘However, there is unlikely to be a wave of properties coming to the market. Offshore structures typically own other assets beyond property and evaluating how to manage a portfolio will… Continue reading
Asking prices continue to rise across the UK, latest index shows
Asking prices in all parts of the UK increased in May with England and Wales seeing an increase of 0.8% and Scotland up 0.7%, according to the latest index to be published. Year on year prices in England and Wales have now increased by 7.5% and in Scotland by 5.8%, the figures from Home.co.uk show. This takes the average asking price in England and Wales to £296,480 and in Scotland to £177,121 and with buyer activity increasing the firm’s index report suggests that prices will continue rising. Asking prices are still rising strongly in Greater London, up 9.6% year on year and 0.5% month on month to an average of £552,878 while the East of England region is also robust with an annual rise of 12.8% and a monthly rise of 2% to £330,990. The South East has seen asking prices rise by 9.5% year on year and 0.7% month on month to £392,712. Elsewhere in the country growth is more modest with Wales seeing annual growth of 1.9% and monthly growth of 0.8%, taking the average asking price to £185,527. The index report also shows that the supply of property for sale is beginning to increase, up 4% year on year overall but up 22% in Greater London and the typical time on the market is up two days to 78 days over the last month across England and Wales, some nine days less than in May 2015. It suggests that the anticipated slowdown following the extra stamp duty charge for buy to let property and additional homes is already fading away. ‘Buyer activity is up and prices continue to rise across the country. Overall, the property market is in better shape than last year,’ said Doug Shephard, director at Home.co.uk. He explained that significant improvements in marketing times in the North suggest that these formerly stagnant regions are experiencing and uplift in demand. ‘Supply in the North East, North West and Yorkshire remains subdued and we expect prices to rise steadily over the summer months,’ he said. ‘Indeed, the total stock of property for sale remains historically very low despite an uptick in supply in London. Scarcity remains the key price driver. The acute supply shortage in the East of England is driving prices up and this region is now outpacing London and the South East in terms of home appreciation. We anticipate that prices will soon reach their affordability limits, as happened in London, and price rises will be more subdued next year,’ Shephard pointed out. He also explained that market activity in London is slower now than back in 2014 when fierce competition for limited supply was driving up prices at an unsustainable pace. ‘However, the market still has significant momentum and sufficient demand remains to elicit more modest price rises. A notable increase in supply is currently providing more choice for buyers and is attenuating price rises,’ said Shephard. He also pointed out that the underlying fundamentals of cheap borrowing… Continue reading
Mortgage advisors report short term uncertainty over growth of buy to let in UK
Buy to let volumes in the UK increased in the first quarter of 2016 but uncertainty remains over the long term, according to the latest financial advisor confidence tracking report. The increase in the volume of buy to let business being written by mortgage advisers was modest in the first three months of the year and financial advisors have concerns about the longer term prospects for the market. Those surveyed for the Paragon Mortgages report said that 24% of their business in the first quarter 2016 consisted of buy- to let, up from 23% in the previous quarter. Volumes of first time and next time buyers also increased. Reflecting these increases, remortgages declined from 35% of intermediary business in the previous quarter, to 32% currently. The report suggests that recent government policy has affected confidence in future business, however, with 13% of respondents expecting all types of mortgage business to decrease over the coming quarter, while 53% expect business to remain stable and 34% expect an increase. On buy to let, opinion is evenly divided with 49% of intermediaries expecting demand for buy to let products to increase or stay the same, as compared to 50% who expect a decline in demand with 1% unsure. Despite this uncertainty the number of intermediaries stating that landlords will ‘keep current properties but not buy any more’ as a result of changes to income tax relief, has nearly halved from 32% in the fourth quarter of 2015 to 18% currently, indicating that purchase intentions may be returning to the buy to let market. Likewise 23% of intermediaries stated that changes to tax relief would make ‘no difference’ to landlord plans, up from 19% in the previous quarter. Remortgages continue to constitute the largest proportion of buy to let business in the first quarter of 2016, accounting for 38% of business, up from 36%. Nevertheless, some 32% of new buy to let finance was secured for portfolio expansion. ‘Our latest report reveals that advisers are circumspect about future volumes of buy to let business as a result of recent policy developments. Over the short term around half of intermediaries expect to see a decline in buy to let business,’ said John Heron, director of mortgages at Paragon. ‘That said, on the question of what impact income tax changes will have over the longer term, sentiment appears to have improved materially over the last quarter with a sharp reduction in the proportion of landlords that are expected to sell property,’ he pointed out. ‘Increased volumes of remortgaging in the buy to let market shows that there is healthy competition with landlords shopping around for a better deal. Whether the market remains as competitive once all the fiscal and regulatory changes are implemented remains to be seen,’ he added. Meanwhile, new figures released today by the Finance and Leasing Association (FLA) show that the number of second charge mortgage repossessions in the first quarter of 2016 was down 52.8%… Continue reading
