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Annual house price growth in Scotland twice that of rest of UK
House prices remain resilient in Scotland despite property tax change and are up 10.3% year on year, twice the annual growth seen in England and Wales. The average house prices is now £180,892, according to the latest LSL house price index, but values fell by 2.1% in May which is regarded as being due to the introduction of the new Land and Buildings Transaction Tax (LBTT). Indeed the tax has also put a brake on sales which declined 10% month on month, and again this figure is affected by the LBTT as there was a rush of sales being completed before it was introduced in April. The tax had the most impact on the £1 million plus property sector with only one property in this price band sold in two months. Properties over £750,000 now pay 12% in tax. But generally the market is in good shape, according to the report. In Glasgow, for example, house prices finally surpassed 2007 levels, reaching a new record of £146,286 due to high demand. ‘Two months into Scotland’s new transaction tax regime, and the impact of the overhaul is still reverberating around the property market,’ said Christine Campbell, Your Move managing director in Scotland. She explained that the general election was a fresh source of uncertainty for those considering the best time to move home and it has been an up and down time for buyers and sellers and as a result it is harder to make out the underlying course of the market. ‘Yet the trends that can be gleaned are positive. Scottish house prices are up by more than 10% on an annual basis, and the sentiment from buyers in our branches is upbeat as the stability of the housing recovery shines though,’ said Campbell. ‘There is no denying that the recent tax turbulence has affected property prices in the shorter term, with the latest monthly dip testament to further shock waves of the LBTT, as the market continues to absorb the change. May’s monthly fall of 2.1%, equal to £4,000, is the largest backwards step we’ve experienced for nearly six years,’ she pointed out. However, she also pointed out that this must be considered in the context of following an exceptional leap in March, when prices soared a record breaking £16,000 as a result of frenetic movement at the top end of the housing market, with 84 properties worth £1 million or more changing hands before the stamp duty switchover. ‘But since the new regime was enforced, there’s been only one million pound home sold in Scotland in the past two months, which is reining back current measures of growth,’ she added. During May, it was the most expensive parts of Scotland that saw average property prices slip backwards, in absence of some higher value sales. For example, house prices in Edinburgh have dropped 5.7% since April, while East Lothian saw an 11.2% monthly drop in May. ‘But overall, the… Continue reading
Property equity release to older home owners in UK up 17%
Retired home owners in the UK cashed in more than £750 million of property wealth in the first six months of the year as the equity release market continued to expand, an new analysis shows. The average amount released nearly was almost £68,500, an increase of £3,500 on the same period last year, according to the half year equity release report from over 55s finance specialist Key Retirement. The total released £753 million, an increase of 17%. The firm said that the increase highlights pensioners’ confidence in using property wealth for retirement planning. A breakdown of the data shows there are, however, wide regional variances ranging from average releases in the North West of over £53,000 to over £142,000 in London. Across the country eight out of 12 regions saw growth in the value of property wealth released with the North East recording a 50% rise, the South East 35% and London a 30% increase. The value released dropped 13% in the North West. Eight out of 12 regions recorded rises in plan sales with three virtually unchanged. London saw a 28% rise and the North East a 31% increase The money is being used to boost standards of living in retirement with 58% of customers using some or all of their cash to improve their home or garden while 28% have used their property wealth to pay for holidays. Family and friends are also benefiting from retired homeowners’ property wealth with 25% of over 55s handing out cash to relatives, according to the report. However mortgage debt, including interest only loans, is emerging as a major issue with 23% of customers paying off home loans with some or all of the money, compared to 20% for the same period of 2014. Around 29% also used the cash to pay off credit cards or loans. The research also reveals that equity release customers are getting older. The average age rose to 71 in 2015, from 69 previously, but they are also wealthier thanks to house price rises with average property values rising 9% to £271,248 from £249,108. ‘Property wealth is making a massive contribution to retirement planning and the equity release market is growing rapidly in response with double digit growth. The average amounts released at £68,500 are more than 50% bigger than the average pension pot and are also tax-free highlighting the advantages of using property wealth in retirement,’ said Dean Mirfin, technical director at Key Retirement. ‘Cuts in pension allowances and contribution levels plus the review of pension tax treatment underlines that property investments are major assets which should be considered as part of anyone’s retirement planning,’ he added. Continue reading
Asking prices in England and Wales up 0.4% in last month
Residential property asking prices in England and Wales increased by 0.4% overall in the last month and by 5.7% compared with a year ago, the latest index data shows. Monthly asking price growth was led by the East of England, up 0.7% since June, according to the Asking Price Index from Home.co.uk The data also shows that property is selling faster. The average time on the market for England and Wales dropped to 177 days, the lowest figure since November 2008 and the South East remains the fastest regional market, with a typical time on market of 59 days. Overall the supply of property for sale remains low, down by 6% in June 2015 compared to June 2014. However there are signs of oversupply in the North East and as a result asking prices are down by 0.8% The index report says that a resurgence of buyer demand continues to drive prices higher, predominantly in London and the South of England, bolstering confidence amongst vendors. ‘The UK property market is in good shape overall. Property supply remains behind buyer demand in most regions as evidenced by falling time on market figures. In Greater London, where marketing times showed a worrying increase earlier in the year, a post-election buyer resurgence has taken up the slack. Only in the North East region, where the recovery is still in its infancy, do we see a significant rise in supply and this has served to make prices dip this month,’ said the firm’s director Doug Shephard. The index also suggests that the prime central London market is showing signs of renewed momentum. After a prolonged period in the doldrums, prices there have indicated a new upward trend since May and time on market figures are beginning to fall. Time on market data for the regions shows that the northern markets of Yorkshire and the North East are the most improved over the last 12 months, recording decreases in typical time on market of 9% and 6% respectively. However, they remain among the slowest markets when compared to the rest of the UK. It is only London and the southern regions that show marketing times indicating a similar vigour to the property market pre-crisis. ‘With the recent political uncertainty now consigned to history, UK property has a clear path forward. Consequently, buyers are back in force but hampered by a lack of supply in most regions. We expect only minor price rises towards the end of this year,’ explained Shephard. ‘Demand, on the other hand, looks set to remain high, with indications from the Bank of England that interest rates will stay at their record low until at least next year, perhaps later. Hence, we expect that further competition between aspirant homeowners and landlords will continue to drive prices higher in a growing number of areas, especially in the South,’ he pointed out. ‘Contrarily, despite clear improvements in marketing times, prices remain stagnant in the North of England… Continue reading
