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House prices rise in Scotland as market shakes off effect of new property tax
House prices in Scotland increased by 1.1% in August, only the second month of growth since the new Land and Building Transaction Tax was introduced in April. It takes the average house price to £167,426, back above December 2014 levels and the annual rate of growth was also 1.1%, the data from the Your Move index shows. When it comes to transactions it was the strongest August for sales in eight years with activity up 7.5% on an annual basis and Scotland saw faster annual sales growth over the summer than anywhere else in the UK. The data also shows that it is semidetached homes that are driving price rises and sales growth followed by a 4% increase in flat purchases compared to a year earlier. In contrast, sales of more expensive detached properties are down 4% year on year. Christine Campbell, Your Move managing director in Scotland, said that the market is starting to shake off the side effects of April’s LBTT after the tax change caused a three month decline in house prices between April and June. ‘LBTT has slowed high value property sales considerably. The number of million pound property sales has fallen to an average of four per month over the last five months, down from 12 in 2014. But it’s not just at the very extremes that this has had a dampening effect and the brakes have been applied to all sales above £254,000,’ she explained. ‘As a result of the tougher top end tax rates, the most expensive parts of the country have recorded price falls year on year, and this is starting to close the price gap between Scotland’s preeminent cities,’ she added. The index also shows that on an annual basis, house prices in Glasgow have increased by 6.5% to reach £141,871, compared to a 3.4% decrease of property values in Edinburgh since last year. ‘As the area with the highest house price across Scotland, Edinburgh’s price fall encapsulates the current trend of declining house prices in high value areas qualifying for higher rates of transaction tax,’ said Campbell. But the middle and the lower tiers of the market have been boosted by the LBTT which has stimulated demand at the bottom and middle rungs of the property ladder. ‘Overall, the activity emanating from the bottom of the property market means that from June to August 2015, Scotland has experienced the strongest year on year increase in property sales of any other part of Britain, with sales climbing 6%,’ said Campbell, adding that sales volumes were down by 2% across England and Wales and seven regions saw sales fall over the same period. Continue reading
Home lending in UK fell in August but experts say it is a normal seasonal trend
Lending to first time buyers, home movers, home owner remortgage and buy to let borrowers in the UK in August but levels are still higher than a year ago, the latest data from the Council of Mortgage Lenders shows. Bob Pannell, CML chief economist said that this is a normal seasonal trend, with August typically less strong for mortgage completions and the underlying picture is of improvement in lending levels on a year by year basis. ‘Seasonal factors pushed all categories of lending lower in August compared to July. However, the mortgage market continues to see year on year growth, and we expect this to continue over the coming months,’ he added. A breakdown of the figures shows that lending fell by volume and by value for the first time since April this year. However, this was the third consecutive month that lending for house purchase increased year on year by volume and by value. Pannell pointed out that it was the highest house purchase lending activity level for the month of August since August 2007. However, volume levels this month were still only 60% of what they were in August 2007. Overall in August, home owner loans for house purchase accounted for 57% of gross lending, the same as in July, while remortgage activity accounted for 21% compared to 24% in July. Home owner loans as a share of gross lending have increased since the New Year while remortgage activity has edged down. Buy to let lending as a proportion of total gross lending remained at 17%, a consistent level since the beginning of the year, but up from 13% in the same period last year. First time buyers accounted for 44% of total house purchase lending volumes, a much higher proportion than pre-crisis levels of 30% of the number of loans for house purchase and it was the highest monthly first time buyer lending level by volume and by value in the month of August since 2007, but the number of loans was only 78% of the August 2007 levels. The proportion of first time buyer gross household monthly income in August to service capital and interest payments stayed the same month on month at 18.5%, but remained considerably lower than 19.7% in August last year, and much lower than the most recent high of 24.8% in December 2007. This was the highest home mover lending level by volume and by value in the month of August since 2007, although this month's volume levels are still only 51% of the volume levels in August 2007. Home movers spent 18.1% of their monthly gross household income to pay capital and interest repayments, up slightly on last month but down on the same period last year. Like first time buyers, this is still much lower than the most recent peak of 23.8% in December 2007. Remortgage activity dropped month on month in August 17% by volume and 18% by… Continue reading
Swimming pool is top extra for prime properties, research suggests
People buying prime property in the UK want top notch sport and home leisure facilities with a swimming pool the most popular of such facilities, new research shows. Overall some 17% of high end estate agents have seen an increase in demand for swimming pools that can add up to 15% to a property’s sale price, according to the study from Direct Line’s Select Premier Insurance. In joint second place is tennis courts and home gyms with 9% of agents reporting demand for these kind of facilities, followed by 8% for a home spa, 6% for land, 5% for a home cinema, 4% for stables, and 3% for a luxury kitchen, a wine cellar and secure parking facilities. But the down side to a swimming pool is that potential buyers either love them or hate them and the upkeep and cost of maintenance can put them off even although they add 15% to the potential sale price. Designer kitchens can also add up to 15% to the purchase price, while dedicated home gyms and games rooms can add around 5% to the value of a home, the research also shows. However, some 17% of those surveyed said these sporting and home leisure facilities do not add value to a home, but they do increase its saleability, or attractiveness to potential buyers. Land was reported as a key selling point by estate agents, who stated customers would often prefer to have the space to build their own chosen facilities. The view from a property can have huge implications for the sale price, with one estate agent estimating when combined with a good location and road reputation, a beautiful view could double the value of a property. According to Nick Brabham, head of Select Premier Insurance, more home owners now want to embrace their favourite pastimes in the comfort of their own properties, including golf greens, squash courts and fully equipped gyms. ‘However, these high end facilities can be costly to install and maintain, so property owners should ensure they have sufficient cover in their home insurance policies to protect the items they value most,’ he said. Continue reading
