Tag Archives: housing
New research shows huge fall in home ownership in England, not just London
Home ownership in England has fallen to a 30 year low with cities in the north of the country worst hit by lower number of people owning their own home, according to new research. Greater Manchester, South and West Yorkshire and the West Midlands Metropolitan area have seen double digit falls in home ownership since their early 2000s peak, the analysis report from think tank the Resolution Foundation. The analysis shows that having peaked at 71% in 2003, the proportion of people owning their own home across England has fallen steadily over the last decade by 8% and suggests that the widely reported increase in home ownership in 2014 was likely a blip to correct a sharp fall the year before, rather than a welcome reversal of a long standing trend. The Foundation says that while much of the discussion around the struggle to buy a home has centred on London, Greater Manchester has actually recorded the sharpest fall in home ownership of any major city area in the last decade or so. In 2003 some 72% of households living in Greater Manchester were owners, slightly above the average across England as a whole. However, home ownership has since plummeted by 14%, almost twice as fast as it has in England and a whole, and by last year just 58% of households living in Manchester owned their own home. The Foundation notes that people living in Greater Manchester are no more likely to own a home than people living in Outer London, and that home ownership rates have fallen below all other big northern city areas apart from Tyne and Wear. It says falling deposit affordability has played a major role in this trend. The Foundation warns however that plummeting home ownership isn’t confined to Greater Manchester. It notes that Outer London, South and West Yorkshire, and the West Midlands Metropolitan Area have also experienced double digit falls in home ownership since the early 2000s. This fall in home ownership has corresponded with a near doubling in the proportion of private renters across England, up from 11% in 2003 to 19% in 2015. The proportion of households renting privately in Greater Manchester has more than trebled over that period, from 6% to 20%, while Outer London and West Yorkshire have also reported double digit growth. The Foundation says that the shift from home ownership to private renting, which is taking place throughout England, particularly among young people, is concerning for a number of reasons. It notes that households in the private rented sector spend a far higher share of their income on housing than those who own with a mortgage, 30% compared to 23%, helping to explain the fact that the share of income that households spend on housing across the UK has increased by around a quarter since 2003 and by around a third in the North West. Renters are also more likely to face the greater insecurity associated with short term contracts,… Continue reading
Lack of funding affecting barn conversion rates in UK
The British love affair with barn conversions seems to have come to an end with new figures showing that the number of agricultural to residential property conversions has fallen. For decades the conversion of agricultural buildings including barns and stables into homes has been popular but now new research shows that in England the number has dropped by 24% over the last year. It suggests that developers are suffering from a lack of funding for such projects so people who want this kind of property are left to funding it themselves. This is despite a there being a considerable appetite amongst farmers concerned about European Union subsidies after the recent Brexit vote to target alternative ways to diversify income, says peer to per property funding platform Saving Stream which carried out the research. The firm believes that agricultural to residential property conversions could still make significant financial sense for farmers and it also makes sense in terms of improving the current lack of housing supply in the UK, especially in rural areas. Saving Stream adds that banks are continuing to de-risk their balance sheets as much as possible, driven by the capital holding requirements placed on them by regulators in the wake of the credit crunch and that private investors are stepping in to help finance these projects as they are attracted to the competitive annual returns of 12% on offer for secured loans at a maximum loan to value ratio of 70%. ‘Converting agricultural buildings such as barns are one of the most effective ways of combating the UK’s chronic rural housing shortage and in the uncertain post-Brexit climate, UK farmers are looking to ramp up activity in this area,’ said Liam Brooke, co-founder of Saving Stream. ‘It is important that access to funding is improved, developers are keen to take-up the large number of opportunities available to them but time and time again a lack of funding is holding them back,’ he added. Saving Stream explains that recent research shows that outstanding lending by UK banks to property developers plunged from £32.5 billion in April 2014 to £14.9 billion in April 2016, a fall of 54%. ‘There are housing shortages across the UK, in both urban and rural areas, and with increasing numbers of possible developments available, this is a perfect opportunity to reduce the housing gap,’ Brooke pointed out. ‘Private investors are helping bridge the funding gap that the UK’s property market has suffered from but there are still plenty of projects struggling to secure the finance needed to get off the ground. There is an eagerness from all sides to increase the number of conversions to help meet demand, however, the biggest issue remains access to funding,’ he added. Continue reading
Foreign owners of property in Australia face new 10% selling tax
New laws introduced at the beginning of July mean that foreign owners of property in Australia worth £2 million or more face paying an extra 10% in tax. Sellers must have proof that they are Australian citizens to avoid the tax which has been introduced in a bid to deter wealthy forging buyers from pushing up property prices. The change came at a time when prices in Australian state capitals were soaring and much of this was blamed on so called wealthy investors, especially from China. The Real Estate Institute of Australia (REIA) supports the legislation, but is concerned that there has not been enough publicity and stressed the importance of real estate and legal professionals understanding their obligations under the new laws. ‘Essentially this is the Goods and Services Tax (GST) process coming into effect in the housing market, which is long overdue in Australia,’ said REIA president Neville Sanders. ‘Failure to get a clearance certificate stating their Australian residency will mean vendors fall under the same conditions as foreign investors and will be required to pay this immediate 10% tax,’ he explained. ‘ ‘It is of the utmost importance that legal professionals ensure the timely receipt of clearance certificates for their clients, to ensure settlements proceed without delay,’ he added. According to Peter Malone, chief executive of GlobalX Legal Solutions, it means that legal professionals are required to ensure their clients are taking the right steps in the selling or buying of property. ‘These changes will affect the growing number of high value homes of Australian buyers and sellers, so it is imperative legal professionals and conveyancers are prepared,’ he added. The new legislation is expected to generate $330 million in revenue over the next four years, with a $770 million compliance cost over the next decade and has been introduced to deter wealthy investors pushing up property prices and making them less affordable for Australians. Maloney said while the imposed tax on foreign investors would help boost the Australian economy and recoup investor funds sent offshore, it was crucial for legal and conveyancing professionals to understand the intricacies of the changes. ‘The onus of proof will now fall on Australian vendors to prove their residency status to exempt them from the new 10% non-final withholding tax but, provided property lawyers and conveyancers are prepared to ensure the necessary documents are readied in advance, this shouldn’t be a timely and complicated process or cause unnecessary delays in the settlement process,’ he explained. ‘We are currently offering our clients a range of informational webinars and sessions to equip them with the knowledge and technical understanding of these changes to ensure the buying and selling process remains a seamless and smooth process for their clients,’ he added. Continue reading
