Tag Archives: london
US property sales set to grow at a more moderate pace in 2016
Following the housing market’s best year in nearly a decade, existing home sales in the United States are forecasted to expand in 2016 at a more moderate pace. Pent-up buyer demand is expected to combat affordability pressures and meagre economic growth, according to the latest monthly report from the National Association of Realtors. Indeed, Lawrence Yun, NAR chief economist believes that demand, sustained job growth and improving inventory conditions are the main reasons for an expected gain from 2015 in new and existing home sales. Despite his forecasted increase in sales, Yun cites rising mortgage rates, home prices still outpacing wages and shaky global economic conditions as headwinds that will likely hold back a stronger pace of sales. ‘This year the housing market may only squeak out 1% to 3% growth in sales because of slower economic expansion and rising mortgage rates. The continued rise in home prices will occur due to the fact that we will again encounter housing shortages in many markets because of the cumulative effect of homebuilders under producing for multiple years. Once the spring buying season begins, we'll begin to feel that again,’ Yun explained. With one month of data remaining for 2015, Yun expects total existing homes sales to finish the year up 6.55 from 2014 at a pace of around 5.26 million, the highest since 2006, but roughly 25% below the prior peak set in 2005 of 7.08 million. The national median existing home price for all of 2015 will be close to $221,200, up around 6% from 2014. In 2016, existing sales are expected to grow between 1% and 2%, 5.3 to 5.4 million and prices between 5% and 6%. Continue reading
New report challenges development in London to consider regeneration
London needs to build some 50,000 new homes a year over the next 20 years and some of this requirement can be accommodated by increasing the density of existing places, including local authority housing estates, it is suggested. Many such estates require updating and this can be done in a way that creates many more homes, a significantly improved living environment for existing and future residents, and better value for local authorities, according to a new report. This would be achieved by rebuilding estates in a street based pattern, fully integrated into the urban network of neighbouring streets, says the analysis by real estate adviser Savills which highlights the potential to deliver more housing by increasing density in well-connected areas as well as the benefits of building sustainable urbanism. The report estimates that at least 54,000 and up to 360,000 additional homes could be accommodated within existing local authority housing estates through a new approach to estate regeneration. It assumes that every existing resident would be re-housed under the same terms on the new streets. The report proposes a new ‘complete streets’ model, based on a permeable and well-connected streetscape, which Savills says would improve density and achieve a better outcome for all existing and future residents and greater value for local authority stakeholders. Many of London’s local authority housing estates were built at a time when London was depopulating, so were not built at optimum density. The report estimates that, had they been built in the 1960s and 1970s to the same density as complete streets, they would have housed a further 480,000 households. But, the report argues, low density has not equated to a higher quality of place in the majority of cases. Many of the capital’s estates were constructed in a manner that means they are cut off and poorly integrated with the rest of London and neighbouring local communities. The conventional approach to estate renewal, often controversial at a local level, is based on replacing the existing site with new high-mass blocks and towers in a similar layout but at higher density, which does little to improve the neighbourhood or create new place value. Savills has modelled this ‘contemporary regeneration’ approach against a ‘complete streets’ alternative, based on a detailed study of six estates across London. The alternative, ‘complete streets’ model proposes rebuilding estates in a street-based pattern, fully integrated into neighbouring streets and community. The analysis estimates that approximately 1,750 hectares of London’s estimated 8,500 hectares of local authority housing estates might be capable of regeneration using this approach. This could private somewhere between 190,000 to 500,000 homes, representing an increase over the number of existing homes of between 54,000 and 360,000. And because this approach creates opportunities for mixed use development and is fully integrated into the broader city, it also creates greater life chances and employment… Continue reading
Details of extra tax on UK buy to let and second homes unlikely before mid-March
The final details of how the extra stamp duty on buy to let and second home purchases will work will not be known until a couple of weeks before the new tax rate comes into effect in April this year. The government’s consultation period on the proposal for a 3% tax on these kind of property transactions runs until 01 February and officials will then consider the responses and are expected to confirm the final details on the annual Budget announcement on 16 March. The proposal is that the extra rate will apply to most purchases of additional residential properties where, at the end of the day of the sale, individual buyers own two or more residential properties and are not replacing their main residence. The higher rates will also generally apply to purchases of residential property by companies. It would seem that the 3% rate will not apply if at the end of the day of the sale an individual owns only one residential property, irrespective of the intended use of that property. However if following the transaction the individual owns two or more residential properties, the applicability of the additional rate will depend on whether the purchaser is replacing their main residence. Liam Bailey, global head of residential research at real estate firm Knight Frank, has pointed out that while the consultation assumes that most people will buy a new main residence on the same day as they sell their previous one, there will be an allowance for purchasers to have up to 18 months to replace a main residence following an earlier sale. Also where an individual sells their previous main residence after purchasing a new main residence, a refund of the higher rate could be claimed with the window for this refund limited to 18 months after the purchase of the new residence, he explained. He also said that it would appear that the location of additional properties will be global, so the ownership of a property in France for example, will be relevant. Also, the new rate will apply if the purchase is completed on or after 01 April 2016. However, if contracts were exchanged on or before 25 November 2015 but not completed until on or after 1 April 2016, the higher rate will not apply. The details will be important as there are a number of scenarios that could play out, for example parents buying a property for their children, joint purchases between friends and partnerships. Stephen Barratt, private client tax director at accountants and business advisers James Cowper Kreston, believes that the proposed legislation will create uncertainty, introduce many anomalies and take a long time to fully bed down. 'The fact that the new rules are intended to apply to completions on or after 01 April 2016 will mean that many purchasers will be exchanging contracts now without knowing what the final rules will be. This will create uncertainty,' he warned. 'The additional 3% rate is intended… Continue reading
