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Home sellers likely to benefit from new UK property tax rules as well as buyers
House sellers in the UK could be set to save £213 million a year to the tune of almost £7,500 each, according to research by property website Zoopla. The reform of the stamp duty property tax which took effect today will remove ‘dead zones’ that existed before each previous Stamp Duty band and see a more progressive approach adopted where buyers will only liable to the portion of the property’s value above each new level. In an analysis of property sales in the 12 months to May 2014, the firm reckons that 28,635 properties have been under priced in order to make them more appealing to buyers by avoiding steep jumps in stamp duty. Zoopla found that the number of property sales in the price bands immediately before an existing stamp duty threshold is significantly higher than expected, while the number of sales in the price band immediately after a threshold, the stamp duty dead zone, is considerably lower. ‘The new, graduated Stamp Duty system is a long overdue overhaul to what the Chancellor admitted was a poorly designed tax and represents a fairer system for the vast majority of home buyers,’ said Lawrence Hall of Zoopla. ‘It also means that those selling their home at certain levels are more likely to achieve the real value of their homes and won’t be forced to discount their properties to sneak under certain bands,’ he explained. ‘Unfortunately those buying property worth more than £937,000 may feel unduly penalised by the new reforms, but the new structure represents a more balanced system overall and a welcome alternative to the mansion tax plans that had been proposed,’ he added. As an example, a house purchased at £300,000 would have resulted in a £9,000 stamp duty bill. With the new system, a buyer will save £4,000 calculated as follows: 0% tax up to £125,000, 2% tax on £125,000 to £250,000 which is £2,500, 5% tax on the remaining £50,000, which is £2,500, leading to a total stamp duty bill of £5,000. Kevin Hollinrake, managing director of Hunters estate agents with 125 branches nationwide, said the firm has already had deals secured as a result of this change. ‘In our opinion, this is great news. For too long, stamp duty has distorted the market deterring sellers from marketing their homes and buyers from buying them in the dead zones above the key thresholds such as £250,000 and £500,000. This should mean more property coming onto the market, and therefore, more sales which is good for the housing market and the economy as a whole,’ he explained. There will be substantial savings for around three quarters of a million home buyers across England and Wales according to research from Savills as all buyers up to £937,000 will benefit. By contrast, around 17,000 transactions above a value of £937,000 will bear an increased stamp duty tax burden, undermining the case for any further taxation of high value property. ‘The change is likely to make the… Continue reading
Real estate market in Turkey expected to be healthy in 2015
Rising foreign demand, record levels of tourism and healthy economic conditions throughout 2014 mean Turkey should expect further growth in its real estate market in 2015, it is claimed. House sales to foreigners in the first 10 months of 2014 increased 66% year on year to reach 15,417, according to the Turkish Statistical Agency (TurkStat). The province with the most foreign buyers between January and October was Antalya, home to the city of Antalya, as well as the resorts of Kalkan, Belek, Side and Alanya. Istanbul had the second highest number of non-Turkish buyers. ‘This rise in foreign interest is especially noteworthy as overall sales in Turkey, including those to Turks, fell slightly for the period compared to 2013,’ said Julian Walker, director at Spot Blue International Property. ‘By the end of September this year though, the number of foreign purchases in Turkey had already exceeded the total for the whole of 2013. This shows how important the foreign market is becoming to Turkey and will continue to be in 2015,’ he explained. Property prices have shown steady increases during 2014, with Turkey recording the highest house price growth of all G20 member countries between the second quarter of 2013 and the second quarter of 2014, up by 14%, according to an index by international property consultants Knight Frank. Meanwhile, Turkey's Reidin-GYODER New House Price index recorded a month on month rise of 1.33% in October and 7.3% rise compared with the same month last year. Revenue generated by tourism in Turkey hit a new record for the January to September period this year, generating $26.6 billion, according to TurkStat. The country welcomed more than 30 million visitors during this period, a 6.1% increase over the same period last year. These figures would suggest the country is on course to receiving 43 million tourists for the whole of 2014, hitting its revenue target of $36 billion, according to a forecast made by the Association of Turkish Travel Agencies. Turkey is now the sixth most popular holiday destination in the world, according to 2013 data from the United Nations World Tourism Organization (UNWTO). As well as attracting high numbers of foreign property sales, Antalya is also Turkey's most visited destination. ‘This year has seen ongoing improvement in air access to Turkey, which attracts more tourists as well as gives confidence to investors and the international business community. Significantly, new routes launched recently include to the Americas and Asia, with increased frequency to the Middle East,’ Walker said. He also pointed out that under pinning Turkey's bullish tourism and real estate markets in 2015 will be the country's economy. The IMF predicts GDP growth of 3% for 2014 after analysis done in September, while the European Economic Forecast published in November forecasts growth of 3.3% in 2015 and 3.7% by 2016. Continue reading
A new garden city forms part of major new housing plan from UK govt
Thousands of new homes are to be provided as part of a new range of UK government measures that include the creation of a new garden city. Communities Secretary Eric Pickles said these new measures would support locally led efforts to build on the momentum gathered since 2010 which has seen house building levels rise to a seven year high. The initiatives include a locally led garden town at Bicester, backed by the council and local MP, which will provide up to 13,000 new homes and the provision of 10,000 new homes on surplus public sector land at Northstowe in Cambridgeshire. Also announced is a new target to release enough formerly used surplus public sector land for 150,000 new homes between 2015 and 2020 and government support to provide 11,000 new homes at Barking Riverside in East London, and 7,500 new homes as part of the redevelopment of Brent Cross. The government also announced measures that will provide 275,000 new homes between 2015 and 2020, the fastest rate of affordable house building in two decades and the first four housing estates to be shortlisted for a share of £150 million to kick start their radical regeneration. Pickles said the programme would mean the creation of over 200,000 new homes across the country and added that the government is also committed to expanding existing towns. Mark Hayward, managing director of the National Association of Estate Agents, generally welcomed the announcements. ‘In one respect, the announcement of the 13,000 new homes to be built in Bicester may be seen as a good thing for the area and housing market there. Bicester is already a town which we have seen undergoing development in the last few years, and so new housing in the area will help to support its growth,’ he said. ‘ However, while this is a small and welcome step in the right direction in terms of housing supply, there is still much more needed across the country to meet the demand for housing both now and in the years to come. This need is reflected in the most recent announcement today of further significant building programmes,’ he explained. ‘It would seem that former public sector land now laying idle will form part of a significant plan to improve the number of available homes in the next five years. In addition, it would appear that support to provide new homes at Barking Riverside and Brent Cross is yet another step towards achieving the number of new builds so needed in those areas,’ he added. But he pointed out that whilst infrastructure investment has been mentioned, the lack of capacity, in terms of skills and labour, is currently insufficient to meet the targets announced. ‘In terms of the affordable new homes programme announced, this is extremely good news, however this must be coupled with the availability and achievable accessibility to mortgage funds for first time buyers to enable them to benefit from the initiative,’ he added. Continue reading
