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Big rise in new rental properties advertised in run up to additional homes tax hike
The rush to beat the April additional homes stamp duty deadline in the UK saw a big rise in new rental properties being listed in the week of the tax hike, research has found. Some 20.6% more properties were being advertised compared to the previous week in more than 90 towns and cities across the country, according to a study from property crowdfunding platform Property Partner. The research looked at the number of new rental properties being advertised between 28 March and 03 April and compared it to the period of 21 March to 27 March. In 85% of the locations there was an increase in the number of new rental listings over the past week compared to the previous week and in many areas, there was a significant increase in new rental properties advertised. Telford in the West Midlands, for example, saw rental listings up almost 160% in the week of the stamp duty deadline, compared to the previous week, and in Stevenage new adverts almost doubled. While five out of the top 10 areas in terms of a rise in rental properties being advertised, were in the North of England. Of the major cities, London saw new rental property listings up 19.4% between 28 March and 03 April, compared to the previous week. While, in Manchester and Birmingham, new rental ads were up 28.7% and 49.9% respectively The following table shows the UK towns and cities that saw the biggest increase in new rental property listings between 28th March and 3rd April, compared to the previous week, 21st March to 27th March. ‘Inevitably there was a final rush by investors to complete on property purchases ahead of the 01 April stamp duty surcharge deadline. More rental properties on the market is good news for tenants, but sadly this looks like a temporary blip,’ said Dan Gandesha, the firm’s chief executive officer. ‘The savings landlords have made may turn into losses further down the line. Future cuts to mortgage interest tax relief and likely interest rate rises, could wipe out profits and force many landlords to sell up,’ he explained. He believes that in the longer term it is likely that the supply of rented properties will fall and rents increase and the most important issue is to build more homes for tenants as well as buyers. ‘The Government has changed the whole structure of the UK buy to let market and made it less attractive and viable for amateur landlords. Once the dust has settled on the stamp duty hike, anyone looking to invest in residential property would be wise to consider alternatives to traditional buy to let, which do away with the hassle, expense and tax implications,’ added Gandesha. Continue reading
New home approvals recover in Australia after slow start to the year
New home approvals in Australia recovered in February after a decline in the first month of 2016, according to the latest data to be released. Home building approvals increased by 3.1% during February after beginning the year on a much slower note, says the new report from the Housing Industry Association (HIA). But there was a 1% fall in detached house approvals while the more volatile multi-unit segment achieved growth of 7.7% and over the year to February, new dwelling approvals totalled 232,194. According to HIA senior economist Shane Garrett the flow of data over recent months indicates that approvals may have hit their high point in the year to October 2015, with a record 239,250 approvals registered over that 12 month period. ‘The monthly lift in approvals activity during February is welcome but it seems increasingly likely that approvals peaked late last year and that the volume of new home building activity is set to ease as 2016 progresses,’ he said. ‘Our latest forecasts indicate that the about 200,000 new dwelling starts will take place during 2016, a reduction of 9.2%from last year. This would still represent a very high level of output by historic standards,’ he explained. ‘However, the risk remains that new home building output will fall below the levels required to meet long term demand. The onus remains on policy makers to tackle this problem, and confront issues like planning delays, land supply shortfalls and heavily inefficient taxes like conveyance stamp duty,’ he added. A breakdown of the figures shows that total seasonally adjusted new home building approvals saw the largest increase in Tasmania with growth of 24.5%, up 14.3% in New South Wales and up 9.5% in Queensland. Approvals declined in Victoria by 12.8%, in South Australia by 10.9% and in Western Australia by 7.6%. In trend terms, approvals saw a 9.2% fall in the Northern Territory but rose by 5% in the Australian Capital Territory. Continue reading
Research reveals how much home prices change in London commuter areas
Home owners who work in London can save £3,000 on a property for every minute of commuting outside of the UK’s capital city. New research from real estate firm Savills that looked at 100,000 house sales recorded around 314 stations on the outskirts of the capital found how prices rise as addresses edge closer to the city. It found that for each minute less spent on the train into central London, buyers should expect to pay a further £3,048 to secure the property. The average house price in inner London is £606,000, but by comparison, commuter locations within half an hour’s train ride from London have an average property price of £458,000. Further out the average price is just £337,000 for those with a journey time between 60 and 69 minutes. The most expensive place to buy at the furthest reasonable distance from the city, said to be 60 to 69 minutes commute, was close to Shelford station in Cambridge where the average house price is £622,451. In contrast, homes near Southend Central in Essex which is also just over an hour from London tended to sell for around £188,000, suggesting buyers pay not just for journey time but location too. Moving just 10 minutes closer to London results in a huge difference in price. In Sunningdale in Berkshire, for example, where the train takes 50 to 59 minutes, the average family home costs £930,000. Cutting another 10 minutes off the commute to work brings in Shiplake station in Oxfordshire where houses last year changed hands for around £1 million. The research report points out that house prices in London are currently 2.3 times the UK average, the largest differential since records began in 1973, according to data from the Nationwide. This has led many households currently living in the capital to face a choice of accepting a twice daily train journey, commuting costs and hassle in return for more affordable house prices and lifestyle benefits. Of course, any house price savings must be set against the cost of commuting. An annual rail and underground season ticket now costs from £2,400 to nearly £10,000, depending on length of journey and rail provider. Despite this, savings on house prices will more often than not outweigh the travel costs. An analysis of Savills buyers in the London commuter belt shows 30% of sales over the first quarter of 2016 were to those relocating from London compared to just 23% during the same period in 2015. The firm expects this trend to continue as the ripple effect continues to take hold. Continue reading
