Tag Archives: london
New tax burden for UK homes owned by company or partnership
New tax rules which come into force next month in the UK could leave some home owners with a bill of £7,000 if their property is partly or wholly owned by a company or partnership. The 2014 budget reduced the threshold for dwellings that fall within the Annual Tax for Enveloped Buildings (ATED), what used to be called the Annual Residential Property Tax, from £2 million to £1 million. The threshold will come down again in 2016 to £500,000 bringing thousands more properties throughout the UK into the tax bracket and forcing owners to submit an ATED return. Sue Crossley, from The Country House Company in Hampshire, which handles the sale and letting of high quality rural properties throughout the south, said many owners were unaware of the new tax burden. ‘This is going to be a shock for a lot of people. This change was tucked away in the small print of the 2014 budget but now it is actually coming true for a lot of people,’ she explained. Most residential properties are owned directly by individuals, but in some cases they may be owned by a company or a partnership with a corporate member. Then the dwelling is said to be ‘enveloped’ because the ownership sits within a corporate wrapper or envelope. Crossley pointed out that there are reliefs that could reduce the tax completely but they can only be claimed when a tax return is completed and sent in. There are also exemptions for charitable companies using the dwelling for charitable purposes. The returns are due by 01 October 2015 and payment by 31 October 2015. From April 2016, properties valued at greater than £500,000 but not more than £1 million will have an annual charge of £3,500. ‘Many people living in properties worth £1m who run businesses and use their property as an investment vehicle will find they have an extra bill to pay this year. That will have a direct impact on a significant number of people this year but many thousands more people will be affected next year when the threshold comes down again to £500,000. There are millions of people living in houses worth more than that,’ said Crossley. ‘I can see why the government has made this change. They have seen people in business use their property as a shield from some of their tax burden and the Exchequer has been looking for a way to claw some of this back. But the bill will still come as a shock to many who may not have been expecting it or may not have budgeted for it,’ she added. Continue reading
Extent of UK mortgage market change shown in annual stats
Home lending fell to £51.3 billion in the final three months of 2014, a drop of 8.1% compared with the previous quarter but was just 0.2% lower than the same quarter in 2013, new data shows. The figures from the Bank of England also shows that new commitments also decreased, from £53.6 billion in the third quarter of 2014 to £46.3 billion in the fourth quarter, a decrease of 8% compared with the final quarter of 2013. The proportion of gross advances at fixed rates decreased for the first time in nine quarters falling to 82.2% in the fourth quarter from 82.6% in the previous quarter. The quarter three out turn was highest since the figures began at the beginning of 2007. The value of residential loans advanced to first time buyers decreased over the quarter to £11.2 billion from £12.1 billion in the previous quarter and the third quarter out turn was the highest since the third quarter of 2007. Buy to let (BTL) lending increased from £6.6 billion in the fourth quarter of 2013 to £7.6 billion in the fourth quarter of 2014 and the proportion of gross advances at an LTV over 90% decreased by 0.5% over the quarter to 3.8% in the fourth quarter of 2014. The figures show overall that the lending landscape has been extensively reshaped over the past year, according to Adrian Gill, director of Your Move and Reeds Rains estate agents. ‘Fresh regulations and affordability checks have cultivated a much healthier mortgage market. Mortgage approvals may take longer to come to fruition, but buyers are benefiting from a more thorough and considered borrowing process,’ he explained. He believes that in the longer term, providing customers with the most suitable mortgage product for their needs is of paramount importance at a time when front-end demand is beginning to blossom in 2015, as consumer confidence grows. ‘Slashed stamp duty fees and more gradual house price growth are bringing homeownership closer within reach of aspiring buyers, while at the same time rock bottom inflation and competitive mortgage deals are giving borrowers a boost,’ he pointed out. ‘Buyers are finding brilliant deals on homes, and this front-end sales activity will soon trickle down to completions, feeding the property recovery,’ he added. Continue reading
Positive outlook for sales and lettings markets in south and east London
The sales and lettings market in the South East of London are set to be buoyant in the coming months due to high demand, according to a new analysis report. There has been a notable migration of buyers from parts of North and West London setting up home in the Royal Borough of Greenwich thanks to it being comparably good value for money, according to the report from JLL. The associate director at the firm’s Blackheath office, Graham Lawes, said that this, coupled with high local demand, is fuelling the prices and momentum is set to continue throughout the year. ‘For City workers, the accessibility to Canary Wharf is a huge attraction. Young professionals and high earners are drawn to the area thanks to the addition of new boutiques, high end restaurants and bars opening in the historical borough. Families are also attracted to the Royal Borough thanks to its excellent local schools with impressive Ofsted reports,’ he explained. He pointed out that it is widely regarded that parts of the South East of London will see prices rise beyond the national average and that there is a huge disparity from one side of London to the other. The imminent arrival of Crossrail will add to this. ‘Blackheath and Greenwich will continue to attract interest but I anticipate Lewisham (SE13) Charlton (SE7), Woolwich (SE18), Plumstead (SE18), and Abbey Wood (SE2) to see the largest growth percentages over the next year as properties there are excellent value,’ added Lawes. The area’s rental market has also been strong, according to Charlotte Russell, assistant lettings manager of JLL’s Greenwich office. ‘This year, the rental market in Greenwich and Blackheath has been particularly strong for one and two bedroom properties. These properties have achieved up to 18% increases in rents year on year in some areas, largely due to relocation for employment into Canary Wharf and the City,’ she said. ‘Such relocations have positively impacted the rental market, particularly now that Greenwich is offering riverside developments to match Canary Wharf, and this has increased both the popularity of the area and spectrum of tenants. Additionally, we are seeing more people staying in their properties longer term with minimal void periods between tenancies,’ she explained. Looking ahead to spring, the firm anticipates that the rental market will remain buoyant, particularly going in to the warmer months, when tenants prefer to move with riverside living likely to remain popular with potential tenants. ‘We hope that new developments such as Platinum Riverside, Greenland Place, Peninsula Tower, and the ever growing Royal Arsenal Riverside in Woolwich, will keep the market in good supply as the demand increases,’ added Russell. In the City and East London property sales market there is likely to be a focus on what happens with Canary Wharf with the estate being sold to a Qatari led bid and planning passed to develop Wood Wharf. But in the… Continue reading
