Tag Archives: real estate
Most accountants in UK think stamp duty property tax is still unfair
The majority of accountants in the UK still believe that the stamp duty regime on residential properties is unfair, despite the reforms announced by the Chancellor last year. The new system introduced in December overhauled how HMRC calculated stamp duty with the tax now only applying to the amount of the purchase price which fell within that particular duty band. This prevented purchasers of property valued slightly above a particular threshold being hit with a sudden increase leading it to be criticised as an anomalous ‘slab tax’. However, some 55% of accountants still believe the system is unfair, according to research from Bloomsbury Professional, a leading tax and accounting information group. Of these, the largest proportion, 22% argued that stamp duty ought to be set more locally, to reflect regional conditions and enable it to be used, for example, as a measure to either boost or control local property markets. A further 20% of accountants felt that stamp duty remains too high overall whilst 13% felt that the tax is too high for more expensive properties. ‘It is significant that the greater proportion of accountants still feel that the stamp duty system is in need of an overhaul. The recent Summer Budget did not address the imbalances that many accountants feel is impacting the residential property market,’ said Martin Casimir, managing director of Bloomsbury Professional. ‘The calls for stamp duty to be set locally are intriguing. The impact of such a change and how it could best be implemented is up for debate but it certainly shows that the devolution debate is becoming part of business’ mainstream thinking,’ he added. When the new stamp duty rates were announced the government stated that 98% of home owners would pay less after the charges and only those buying properties worth more that £937,000 would pay more. HMRC collected £10.7 billion in Stamp Duty tax in 2014/2015, a 36% increase over three years from £6.9 billion in 2012/2013. Continue reading
Average price of an affordable house in UK is almost £190,000
The average price paid for properties by buyers using the affordable housing schemes in the UK has reached almost £190,000, new research shows. The overall average price of £189,786 is just 4% or £7,750 lower than the £197,535 average for house purchases as a whole, the research from the Halifax shows. Regionally, the highest average price paid by buyers using affordable housing schemes is in London at £323,148 while the lowest is in the North of England at £147,437. Nevertheless, the average value of a London property sold in a scheme is 33% lower than the average London price of £482,579. The research also shows that first time buyers remain the biggest beneficiaries of Help to Buy housing schemes accounting for 80% of purchases over the last year compared with 46% of all mortgage financed home purchases made by first time buyers over the same period. In the last year, improving economic conditions and government schemes such as Help to Buy saw the highest number of first time buyers purchase their first home for seven years. The latest official figures reveal that Help to Buy equity loans and mortgage guarantee schemes and NewBuy have helped 99,601 buyers acquire a home since the introduction of Help to Buy in the 2013 Budget. Four out five or 79,680 of these purchases were completed by first time buyers. The average price paid by first time buyers using the schemes is now £150,361, some 10% or £16,732 lower than the average price paid by first time buyers for all housing which is £167,093. First time buyers in London see the largest benefits from buying through affordable housing schemes, with an average price that is 36% lower than the average price paid by first time buyers in the capital generally at £236,733 compared to £367,961. ‘Many of the affordable home ownership schemes available have been designed specifically to help first time buyers get on the ladder and support construction of new build homes and the latest official figures show this has been successful,’ said Craig McKinlay, mortgages director at the Halifax. ‘As the economy continues to recover and mortgage interest rates remain at very low levels. We expect to see continued growth in first time buyers during the second half of the year,’ he added. The research also looked at the profiles of borrowers buying a home under affordable housing schemes to find what typical scheme users are like. It found that 17% of affordable housing transactions in the 12 months to May 2015 were in Scotland followed by the South East at 15% and the North West at 10%. By comparison, some 20% of all housing transactions were concentrated in the South East, and 12 % were in Scotland and 10% were in London. The average gross annual income of a home buyer purchasing through an affordable housing scheme is £31,886, which is 5% lower than the average earnings for all those in full time employment at £33,475. Regionally,… Continue reading
UK house price sentiment dips slightly
The UK’s residential property market is likely to see continued house price momentum in the second half of 2015 but sentiment is down from last year’s highs, the latest index shows. Households still believe the value of their homes is rising and the July House Price Sentiment Index from Knight Frank and Markit Economics has now been in positive territory for 28 months in a row. However, July’s reading of 58.6 was a slight decrease on the 59.5 recorded in June, but it was still the second highest reading so far this year, an indication that households across the UK are still confidence that house prices are rising. Tim Moore, senior economist at Markit Economics, pointed out that UK house price sentiment in July was comfortably above the year and a half lows seen during February. ‘A gradual rebound in households’ property value perceptions has been underpinned by strong demand conditions so far this summer, alongside an underlying lack of supply and the continued low mortgage rate environment,’ he explained. He believes that these factors are likely to support house price momentum through the second half of 2015, but added that tighter mortgage lending rules and stretched affordability have brought down UK households’ expectations of future house price growth from last year’s record highs. Indeed, the future HPSI, which measures what households think will happen to the value of their property over the next year, fell marginally in July to 70.2, from 70.5 in June. On a rolling three monthly basis to July the future HPSI is 70.2, the same as the previous three months, an indication that expectations for future house price growth have flat lined. ‘Overall expectations for future house price growth remain firm, underpinned by a strengthening labour market, improving economy and ultra-low mortgage rates,’ said Grainne Gilmore, head of UK residential research at Knight Frank. ‘There is now more discussion about possible interest rate rises, but this, as well as the property tax announcements in the Summer Budget, has had little impact on average expectations for the direction of travel for house prices,’ she explained. ‘However, there are regional differences in the data, with the widest spread between the future HPSI reading in the North East and London than at any time since March last year, reflecting the differing dynamics of housing markets across the country, with local economic factors leading to a disparity in the levels of house price growth,’ she added. Continue reading
