Tag Archives: housing
Buy-To-Let Boom Set for Long Stay, Reports Leading Property Firm Knight Knox International
With average house prices breaking the £200,000 barrier, the buy-to-let boom is set to continue as first-time-buyers are ruled out of the market and forced to continue to rent, particularly in cities such as Liverpool and Manchester, where home-building remains low. buy-to-let mortgage lenders offer a much more free-handed approach, with £16.4 billion being lent to savvy investors, who saw the financial rewards and longevity of the market, in 2012. This has not slowed down in the second quarter of 2013, with 40,000 mortgages worth £5.1 billion, being given to buy-to-let investors, according to data published by the CML; determining that both the number of buy-to-let loans, and the value of lending, were at their highest level since the third quarter of 2008. Although rewards are strong for landlords investing in the buy-to-let market across the country, LSL confirmed in their buy-to-let index for April 2013 that rewards were in fact the strongest in the North West, where yields were highest. The index documents that the North West produced yields of 7.2%, topping London’s 5.0%, and an average rent of £568, outshining the average rents of near counterparts Yorkshire and the North-East. Two cities which contributed largely to the North West’s table-topping performance, in terms of buy-to-let, were Manchester and Liverpool. Case Study: Manchester Voted by Britons as the Nation’s second city in a survey by the Trinity Mirror Data Unit, Manchester is a city bursting with renters, some who live there to avoid commuting to work, some who are studying at University and some, who well, just enjoy the experience of living in a place awash with culture and entertainment. Investors can purchase units at a relatively cheap price in Manchester, when compared to other cities, yet still claim average gross rental yields of 7.6%, with renters willing to pay high prices to reside in this cultural hub. HSBC also named Manchester as a top four UK buy-to-let-hotspot in a study carried out this April, confirming the high-performing rents that landlords can retain when investing in Manchester. Investors can also expect to receive these high-performing rates over a long period of time, with the National Housing Federation predicting that rental rates will grow in the city by 36% by 2018. Case Study: Liverpool Liverpool is an area which is failing to supply the increasing amount of private renters, who desire to live in this thriving city. Although rental stock in Liverpool has grown by 79% between 2001 and 2011, this is proving inadequate in housing the city’s growing population, which has mushroomed by 5.5% over the last decade to reach 466,400. In a bid to counter this surging demand from private tenants, the Mayor of Liverpool has pledged to deliver 5,000 new homes in the city and, with statistics from Shelter revealing that the average single person in the city needs nine years to save the deposit for a house, while the average couple need four years, this influx of properties is sure to be needed for rental stock. The Solution? More purpose-built student accommodation has been heralded as the answer to an increasing demand for rental stock. Real-estate adviser Savils Plc argued in a report that the ever-increasing amount of HMOs (Houses in Multiple Occupation) are inflicting a damaging restriction on the housing supply, making the call for more purpose-built student accommodation as a solution to free-up social housing and rental stock, one of critical importance. Knight Knox International are in agreement with this rallying call, having sold properties in areas such as Manchester and Liverpool where student demand and housing shortages are concentrated. In reaction to this increasingly urgent shortage, Knight Knox International has put themselves at the forefront of construction, building purpose-built student accommodation, such as X1 Chapel Street in Manchester, to free up HMOs. The property firm has also added more residential stock through refurbishments and construction, avoiding using rental stock already on the market, which would be detrimental to local markets considering the demand for more local housing. In Manchester, the property investment company have recently launched residential stock at X1 Town Hall , which is already 75% sold out within only a month of launch, highlighting that investors see Manchester as an area ripe for investment and Merebank Court in Liverpool, which is already over 60% sold out,again, highlighting the demand for good quality rental stock in Liverpool. To enquire about residential and student accommodation properties in Manchester and Liverpool please contact Knight Knox International’s buy-to-let experts on +44 (0)161 772 1370. Continue reading
France To Cut Minimum Property Holding For Capital Gains Relief
22 August 2013 The French government is to increase capital gains tax relief on investment properties and second homes, shortening the exemption minimum holding period to 22 years from 30. Along with a temporary 25% cut in capital gains tax over the next year, the move is intended to increase the supply of available housing. Gains on investment properties and second homes are subject to a 19% tax rate, with an additional tax of 2%-6% on gains of more than €50,000. From September taxable gains will be reduced by 6% a year after five years of ownership and by 4% in the 22nd year, leading to total exemption after 22 years compared with 30 years previously. However, gains will still be subject to social charges of 15.5% for 30 years. The base for these charges will be discounted by 1.65% a year between six and 21 years of ownership, 1.60% in the 22nd year and 9% a year thereafter. The base for both capital gains tax and social charges will also both be reduced by an exceptional 25% relief between September 2013 and August 2014. The reform is intended to “make the property market more fluid, support activity in the housing renovation sector and lead to a decline in prices that will help first-time buyers and tenants”, the Budget Ministry said. The 25% additional relief is designed to lead to a positive “supply shock” in the short term and ensure that the longer-term reform gets off to a solid start. The previous centre-right government reduced capital gains tax relief on the sale of second homes and rental properties, increasing the period of ownership needed for full exemption from the tax from 15 to 30 years, but this led to a drying up of sales. The new reform will be the third overhaul of the regime since 2004, whereas property investors need more stability in taxation, because of the long-term nature of their investments, said Victor Pagès, founder of My US Investment. Meanwhile, for undeveloped land the government is planning to abolish capital gains tax reliefs for longer periods of ownership, to encourage the sale of vacant land for housebuilding. The moves will be included in the 2014 budget. pie Continue reading
European Residential Property Investment Attracts Global Rich
25 August 2013, 07:16 PM Greek, Nigerian and French buyers are joining wealthy Chinese, Russian and Middle Easterners targeting European residential property, in particular new luxury developments in central London. In southern Europe meanwhile, the offer of residency permits is attracting new capital, particularly from Asia, to support suffering housing markets and economies. Foreign investors have snapped up 65-70% of new homes in prime London locations over the last two years, according to property consultancy Chesterton Humberts. That appetite, primarily from China, Russia and Mid East – drawn by the capital’s shopping and rich lifestyle – has helped push new-build home prices up by 56.3% since the start of 2009. The buyers are however increasingly targeting the homes for investment, and are now being joined by buyers from Greece, Nigeria and France looking to protect their wealth from taxes and political uncertainty in their home countries. International buyers spent £2.2bn on new luxury London residential last year, a figure that Samuel Warren, Chesterton Humberts’ head of international residential developments, expects will be exceeded this year. Large new projects, such as the redevelopment of Battersea power station, are helping drive the market. “With demand for prime new build properties set to remain robust and new supply struggling to keep up, we expect investment volumes will be higher this year than last. The relative weakness of sterling means that many overseas buyers can achieve discounts on purchase price whilst acquiring an asset that will almost certainly appreciate considerably .. and which they will have little difficulty in selling.” However, political opposition to London ‘buy-to-leave’ properties is growing, amid fears that workers on lower wages will be pushed out of central districts, and local economies will suffer. Barbara Grahame, Labour’s planning spokesperson for Westminster borough council, said parts of Westminster are turning in to a ghost town. “More ‘buy-to-leave’ luxury apartments are being built and sold as investments for overseas buyers who rarely live there, sucking the life out the West End and contributing nothing to the local community or local economy.” Around Europe, the focus on London as a safe haven comes as some troubled nations ease residency requirements to attract wealthy foreigners to buy property and re-stimulate their housing markets and economies. Spain changed legislation in July to grant residency visas to non-EU nationals spending more than €500,000 on property, a move that grants them free access across the European Union. It follows Portugal, which has also set the same threshold, and Greece and Cyprus at a minimum €250,000 and €300,000 respectively. International investment in Spanish property grew to almost €5.5bn in 2012, according to the Bank of Spain, driven by buyers from Scandinavia and Russia. The change in legislation is expected to drive more interest from Asia and push investment levels past 2012. But some commentators offer stark predictions for the country’s housing market. Angel Serrano, the head of Madrid-based property consultancy Aguirre Newman, said recently residential property prices need to fall by another 20%-25% for housing to become affordable for Spanish workers. pie Continue reading
