Tag Archives: real estate
UK commercial property sales reach highest level since the economic downturn
The number of UK commercial property transactions has reached its highest level since the credit crunch, with 115,400 sales in the last year, a 6% jump, according to the latest figures to be made available. Data from HMRC shows that the number of transactions is up 24% from a low of 92,900 in 2008/2009, but still significantly below 2007/2008 when there were 139,000 sales. An analysis of the figures by commercial law firm EMW, suggests that England is dominating the country’s market. There were 97,500 commercial property transactions in England last year, accounting for 85% of the UK total, this figure is also the highest since 2007/2008 when there were 115,700, 83% of the UK total. The report explains that the relatively high yields on property when compared to other investments, continues to attract both UK and, increasingly, overseas investors. ‘Commercial property assets are proving increasingly attractive to investors looking for higher yields in an environment with record low interest rates and this is driving activity towards pre-credit crunch levels,’ said Nick Marshall, principal at EMW. ‘There has also been a surge of interest from overseas investors, with the UK offering investor friendly lease terms. The relative shortage of vacant prime office space in central London is also making the market more attractive to investors,’ he explained. ‘Bank lending has also picked up which has led to more activity in the market and lenders are now happier to fund purchases at higher loan to value ratios. Without higher LTVs, many property investors were finding it hard to get the economics of their investments to work,’ he added. Meanwhile, according to the latest Commercial Market in Minutes report from Savills, downward pressure on prime yields is set to resume across six sectors of the market while income and rental growth will begin to drive the total return. Savills expects downward movements in prime yields to return across M25 offices, provincial offices, high street retail, shopping centres, industrial distribution and industrial multi-let, largely driven by a lack of new stock coming to the market. Also, West End and City office prime yields are at an all-time low at 3% and 4.25% respectively, compared to 3.25% and 4.25% in May of last year. However, unlike the early phase of the UK’s economic recovery which saw investors rely on an uptick in capital value to produce total returns, Savills says the market will have to focus more on income return and rental growth. The firm suggests this shift is a clear indicator that the market has moved on as the rate of capital value growth begins to slow from its peak of 12.95% in October 2014 compared to a current level of 11.04% for the year to the end of May 2015. ‘Rental growth is no longer just a London story and while office and retail in the Capital remain at the top, an outward ripple of recovery suggests strong… Continue reading
Property tax rules changing in New Zealand
A new Bill to strengthen the property tax rules for buyers and sellers in New Zealand is being introduced which will help the taxman enforce the rules around real estate. The Taxation (Land Information and Offshore Persons Information) Bill contains proposed amendments to the Land Transfer Act and the Tax Administration Act. Buyers and sellers of property will be required to provide their IRD numbers at the time of property transfer. Those who are tax residents in another country will also have to provide their Tax Identification Number from their home jurisdiction. However, there will be an exemption for New Zealand residents’ main home. And to ensure our anti-money laundering rules apply, there will be a requirement for overseas people to have a New Zealand bank account to get a New Zealand IRD number. This will also apply to New Zealanders who have been out of the country for three or more years. ‘These measures provide extra information which will help Inland Revenue detect people seeking to avoid their tax obligations. When people try to get out of paying tax, it’s unfair to all those people who do pay,’ said Revenue Minister Todd McClay. According to Land Information Minister Louise Upston the proposals will see Land Information New Zealand and Inland Revenue collaborating to ensure fairer taxation of people buying and selling residential property for profit. The bill is expected to be reported back to the Parliament House in time to be passed in late September and it will take effect from 01 October 2015. McClay intends to release a public consultation document later this month seeking views on the introduction of a ‘bright line’ test which would make gains from the sale of certain residential properties sold within two years of purchase taxable. ‘Under this test an exemption will apply when the property is the seller’s main home, is inherited from a deceased estate or is transferred as part of a relationship property settlement,’ he explained. ‘Most people in New Zealand do the right thing and pay their tax. Inland Revenue will help you get it right, but for those who try to avoid paying, we’re making it harder to get away with it,’ he added. Continue reading
Average house prices static in England and Wales
Average house prices in England and Wales remained static in May but were 4.6% higher than a year ago, according to the latest Land Registry figures. This takes the average property value to £179,696, just under what it was at the peak of the housing market in November 2007. The data also shows that London and the South East experienced the greatest increase in their average property value over the last 12 months, both with a rise of 9.1% while the East and North East experienced the greatest monthly rise at 1.6%. Wales saw the only annual price fall with a decrease of 0.6% and also saw the largest monthly price decrease with a fall of 1.7%. The number of completed house sales in England and Wales decreased by 12% to 59,311 compared with 67,321 in March 2014. The number of properties sold in England and Wales for over £1 million decreased by 6% to 842 from 893 a year earlier. Peter Rollings, chief executive officer of Marsh & Parsons, said that while the monthly house price change was static, it is positive that annual improvements across the UK means prices are almost back to the November 2007 peak. ‘The post-election feel good factor will soon serve up higher prices or transaction levels, and the market is set for future growth given the improved buyer confidence and increased supply of properties we’ve seen throughout June. High end buyers continue to court prestigious London properties and, as a result, prices will continue to rise sustainably in central areas,’ he pointed out. According to John Goodall, chief executive of lender Landbay, it is good news that repossessions are retreating, household earnings are gathering pace, house price growth is positive yet sustainable and behind the scenes, mortgage lending is responding to all these factors with a growing sense of confidence. 'To keep this progress rolling, confidence must be backed by caution. Mortgage underwriting matters in the good times as much as the bad and risks need to be properly controlled. Strong fundamentals combined with high quality underwriting will bring new investment into the mortgage market from traditional sources of funding to retail investment through new peer to peer models,' he said. 'With time, a steady expansion of mortgage lending will be good for everyone. Rather than an unsustainable charge, the supply of new homes will feed on this solidity of demand from first time buyers and landlords. In short, there are no easy answers but the tide is turning for the better,' he added. However, Steve Bolton, chairman of Platinum Property Partners (PPP), said there should be concern that prices for many people are racing ahead of wages for most people. ‘This has stretched affordability, pushing a home purchase further out of reach for many,’ he added. He pointed out that the rental sector is likely to come under increased pressure as growing numbers of people look to it for longer term solutions… Continue reading
