Tag Archives: finance
UK house prices up over 10% year on year, latest index shows
Annual house price growth in the UK had edged above 10% in March with the market also seeing price growth on a monthly and quarterly basis, the latest index shows. Property prices increased 10.1% year on year, taking the average price of a home to £214,811, the data from the Halifax index shows. It also records month on month growth of 2.6% compared with February and quarterly growth of 2.9% in the first three months of 2016. But the quarterly rate of change was just below the 3% recorded in February. The annual rate of growth was higher than the 9.7% rise recorded in both January and February and has been within the 8% to 10% range for nearly the whole period since the start of 2015. The monthly increase in March more than offset February’s 1.5% fall but the index report points out that the quarter on quarter change is a more reliable indicator of the underlying trend as monthly house price changes can be volatile. Flat prices have risen more sharply than prices for other property types since 2008, according to recent separate Halifax research. The 57% increase in the average price of a flat is significantly higher than the 37% rise for all residential properties over the period. Detached homes recorded the smallest rise at 20%. Terraced and semi-detached houses saw price rises of 38% and 34% respectively. A considerable proportion of the national rise in flat values has been due to the rapid increase in flat prices in London with growth of 62%. However, flats represent a much higher share of the property market here than elsewhere. Half of sales in London are flats compared with the UK average of 17%. Worsening sentiment regarding the prospects for the UK economy and uncertainty ahead of the European referendum in June could result in some softening in the housing market over the next couple of months, according to Martin Ellis, Halifax housing economist. ‘Current market conditions, however, remain very tight with an acute supply/demand imbalance continuing despite an improvement in the number of properties coming on to the market for sale in recent months. This, together with continuing low interest rates and a healthy labour market, indicate that house price growth is set to remain robust,’ he said. Russell Quirk, chief executive of eMoov, pointed out that much of the increase in March could be due to buy to let landlords rushing to beat the introduction of an extra stamp duty tax on additional homes at the beginning of April. ‘Although it looks like good news for UK homeowners on the surface, this increase could be artificially inflated due to the stamp duty changes. When coupled with the fact that interest rates are still at a rock bottom and keeping the market buoyant, it’s hard to tell exactly how the market will go,’ he said. ‘It will be interesting to see what happens next month once the stamp duty dust has settled and… Continue reading
New report highlights lasting changes in UK home ownership
The recent economic downturn has had a lasting effect on the pattern of home ownership in the UK with more people now renting a home, new research shows. According to data in the latest economic review report from the Office of National Statistics the proportion of households who rent their home from a private landlord increased slowly from 6% to 11% in the 20 years between 1988 and 2008, before rising to 16% in 2014. By contrast, the proportion of households who own their own home increased gradually from 56% to 71% between 1981 and 2008, but fell back to 67% in 2014. This fall in home ownership, and the marked increase in private renting, have reversed a three decade long trend towards increased home ownership, and partly reflects constrained mortgage lending and the relative performance of house prices and household incomes during the recovery, the report says. It also points out that this combination of effects has also helped to reduce the fraction of households which own their own home with a mortgage which has fallen from a peak of 43% in 1991 to just 31% in 2014. While trends in aggregate home ownership have started to reverse in recent years, the impact on sub-groups of the population has been considerably larger. Not only has the number of people choosing to live at home with their parents increased markedly, but patterns of tenure among independent householders have also changed. The number of young people living in privately rented accommodation has risen markedly, both since the economic downturn and over the past four decades. In 1987, just 9% of those aged 26 to 30 were private renters but rising to 19%, 30% and 39% in 1997, 2007 and 2014 respectively. Almost one third of those aged 31 to 35 were private renters in 2014, and one in five of those aged 37 to 41 were renters, markedly higher than in 2007. Much of the recent rise in the incidence of private rentals is reflected in the sharp fall in home ownership and in particular in the lower fraction of mortgagors. The proportion of individuals of all ages living in mortgagor households increased between 1977 and 1987. Over the following two decades, the proportion of young people in mortgagor households fell, while the mortgagor proportion among those aged between 45 and retirement increased, likely reflecting the maturation of many of the younger householders who were part of the initial wave of house purchases. The difference between 2007 and 2014 is striking, the report says, pointing out that the prevalence of mortgagors is lower than in 2007 among every age group below 55, and the prevalence of mortgaged home ownership among age groups under 40 is lower than in 1977, before the Right to Buy was introduced. It indicates that the rise in the incidence of private rentals has been particularly marked among 21 to 25 year olds, increasing from less than 20%… Continue reading
Research reveals high number of sellers who end up paying inheritance tax
One in four properties sold in England and Wales in 2015 were above the inheritance tax limit and the number sold for more than £325,000 have doubled since 2009, new research shows. Proportions were even higher in some locations, for example, 94% of properties sold in East Central London were over the inheritance tax nil-rate band, says the research from Saga Investment Services. The research also found that just one in 10 individuals can correctly identify the IHT threshold for a single person, and a mere 4% for married couples and civil partners. Just 10% correctly said £325,000, some 21% thought it was higher and 19% said it was lower, while 50% didn’t know. The report points out that new ‘main residence’ allowance to be introduced in April 2017 will benefit home owners. Overall the number of properties sold at prices above the £325,000 starting point has doubled over the past six years from 13% of properties in 2009 to 24% in 2015, according to the study which analysed six years’ worth of property sales data published by the Land Registry. Despite the number of property sales in 2015 decreasing by 3.7% compared to 2014, sales exceeding £325,000 have soared by 11.4% over the same period. A breakdown of the figures show that after East Central London the next location with the highest number of property sales over the IHT threshold is West London with 90%, then South West London at 88%, the West End of London at 86% and North West London at 83%. But outside of central London, the proportion of properties sold above £325,000 has also been rising sharply. Some 28% of postcode areas have seen the number of property sales exceeding the IHT threshold double in the past six years, including Brighton, Bromley, Bristol, Cambridge, Colchester, Croydon, Durham, Northampton, Norwich, Portsmouth, Stevenage, Tweed, Uxbridge and Watford. For married couples and civil partners, any unused IHT allowance can be passed on to the surviving partner, meaning the total that can currently be handed over without a potential tax bill could be £650,000. Across England and Wales, the number of properties sold above this level has doubled since 2009, from 2.4% to 5.5%. There are 17 postcode areas in which one in every 10 properties sold in 2015 exceeded £650,000, compared to seven in 2009. In 2015 some 60% of all properties sold in the EC postcode area exceeded £650,000, up from 14% in 2009, while 56% of property sales in West End, 53% in West London and 44% of sales in South West London. The research also shows that just 4% of over 50s living in London correctly identified the IHT threshold for married couples and civil partners and 17% believed there was currently no maximum, while 20% thought the threshold was lower. On 06 April 2017 a new IHT allowance will be introduced for people passing on their main home to a direct descendant. This will rise each… Continue reading
