Tag Archives: london
UK stamp duty changes set to boost house building
A leading UK builder has announced that the recent reforms to the Stamp Duty property tax has given it the confidence to bring forward the next phase of a major development. While the stamp duty reform has been widely hailed as a boost for first time buyers trying to get on the housing market the announcement from Crest Nicholson shows it is also going to boost house building. The house builder said it will bring forward the next phase of development at Centenary Quay in Southampton and build 280 new homes, some 128 of them in the next year. New analysis by the company revealed that the reforms will save buyers in Southampton over £1,660 per transaction and increase demand for new homes. In addition, since 2013 some 44% of sales at Centenary Quay were made through the government’s Help to Buy scheme and a further 101 apartments were sold for Build to Rent. Chancellor of the Exchequer George Osborne, who announced the stamp duty changes in his autumn statement earlier this month, described it as great news. ‘Not only are Crest Nicholson building more homes quicker but buyers will also see real cash saving when they purchase a house,’ he explained. ‘Stamp duty was one of the worst designed taxes and acted as a real brake on aspiration for those who wanted to get on or move up the housing ladder. As part of our long term economic plan we have made the system fairer so people only pay tax on the part of the property that falls within each band. The average property will pay £4,500 less stamp duty, with 98% of people who buy a home benefiting from the reform,’ he added. Debbie Aplin, managing director of Crest Nicholson Regeneration, said the reforms will undoubtedly boost activity in the housing market, re-stimulating building rates and enable the firm to drive the rate of sales back to pre-recessionary levels. ‘Last year alone we were able to facilitate 571 new home purchases through government backed incentive schemes such as Help to Buy, and now with the addition of stamp duty reform we remain committed to our target of building in excess of 3,000 new homes in the UK in 2015,’ she pointed out. ‘This will in turn support further job creation and have a positive overall impact on the entire economy. Most importantly though, the impact of changes to stamp duty will remove a lot of uncertainty for consumers over the coming months, helping to solve the affordability challenge so many purchasers are facing,’ she explained. ‘This is particularly true for first time buyers struggling to get on the housing ladder. A massive 72% of our purchasers benefiting from Help to Buy were first time buyers, and we hope to see a similar impact from stamp duty reforms,’ she added. The Home Builders Federation has campaigned for the abolition of the stamp duty slab system that caused distortions in the market, penalised buyers… Continue reading
House lending in UK expected to grow in 2015 and 2016, but more slowly
The Council of Mortgage Lenders (CML) has issues a confident outlook report for 2105 and says it expects mortgage lending to grow in the next two years but more slowly than this year. Gross and net lending of £240 billion and £38 billion respectively in 2016 would nevertheless represent the strongest performances since 2008 and it adds that a gentle upward trajectory for the mortgage market going forwards should calm macro-prudential concerns. ‘The proportion of cash financed transactions has shown signs of stabilising in 2014, and may decline gently as mortgage availability continues to improve. Prospects for economic growth, job creation and a pick-up in earnings are relatively positive, and these factors, along with the easing in interest rate expectations over recent months, should underpin housing market sentiment,’ the report explains. It also welcomes the form of stamp duty announced by the Chancellor George Osborne in his autumn statement and said that this will also benefit lending activity in the short term. However, it also points out that housing market activity has nudged lower since the summer but this is consistent with the long standing view that affordability considerations would limit the scope for transactions to return to longer-run norms. ‘We expect the pace of house purchase in 2015 and 2016 to be a little below this year’s level,’ it adds. When it comes to buy to let, the CML says lending in this sector should continue to make some headway, although this may be limited by uncertainties about the appetite to regulate it or the activities of landlords more generally. Some further improvement in mortgage arrears and possessions is possible in 2015, before a relatively modest reversal as interest rates increase gently through the second half of our forecasting period. Ales could fall. ‘Reflecting the uncertainties about wider economic developments and housing activity beyond the next few months, we think that transactions will ease back modestly in 2015 and thereafter broadly settle,’ the forecast points out. It also points out that cash based transactions have grown in importance to account for more than a third of market sales, with the reduced availability of mortgage credit following the credit crunch. The cash proportion of sales peaked at nearly 36% in 2013 and in 2014 as mortgage credit availability has improved, mortgage financed transactions have grown at more or less the same pace as cash transactions, and so the latter’s proportion has remained fairly steady. ‘Looking ahead, we anticipate that cash transactions will progressively edge back down nearer to a third of sales, and so to a limited degree allow for a softer decrease in the volume of mortgage financed sales than for the overall market,’ the report adds. With typical loan size echoing some further modest increases in house prices, the CML expects the value of lending for regulated house purchase to move a little higher to about £120 billion in 2015 compared with £115 billion in 2014. ‘We have pencilled… Continue reading
Prime property buyers in London down by 30%, new data suggests
London’s residential prime property market is seeing fewer buyers than a year ago and stock levels are up by 60%, according to new data. The December market barometer from Douglas & Gordon shows that buyers are down by 30% but prices are holding up with values down only 15% year on year. The firm says that this is an indication that the appetite to move amongst prospective vendors is still there but there is clear evidence to suggest that political uncertainty ahead of next May’s general election is playing on buyers’ minds. It also says that vendors are waiting until after the election to put their house on the market in the hope of greater stability and records a resurgence of gazundering for the first time since 2009. ‘Significantly, the fall through rate is down, so buyers are showing tenacity in securing their property. It’s unlikely to become a common trend however, as most sellers are happy to wait for the return of market stability post-election, although the broadly beneficial Stamp Duty reforms could signal a return of confidence even earlier, said George Franks, sales director. ‘In this new paradigm, when the world economy wobbles, London smiles and, given international deflationary pressures and interest rates remaining low long term, we anticipate next year as being very good for both the prime and emerging prime markets,’ he added. The lettings market is proving to be the polar opposite of sales with applicants up 33% and stock down 30%, indicating that 2015 will sustain the recovery of rental values that has been so eroded in recent years. An uncertain sales market has helped to bolster activity with 26% fewer tenancies ending compared to this time last year, signalling that tenant are staying put, according to lettings director Virginia Skilbeck. She pointed out that at the beginning of December the first phase of the ‘right to rent’ scheme came into force in the West Midlands, whereby landlords will face fines of up to £3,000 if they fail to check on the immigration status of their new tenants. The Home Office says it expects to continue with the phased introduction of the scheme across the UK next year, but she does not expect a decision on whether it will be extended throughout Britain until after the general election in May. ‘Seasonally, the beginning of January is a very busy time in the lettings calendar and with some of our offices having half as many properties available to let compared to this time last year, combined with a surge of applicants registering in the New Year, we can expect to see increased competition for fewer available properties,’ she said. Continue reading
