Tag Archives: real estate
Majority of UK home movers have benefited from Stamp Duty change
Home buyers spent an estimated £7.7 billion on Stamp Duty in England and Wales in the year to March 2015, new data shows, with the average home owner spending nearly £10,000. Home owners in London who bought for the first time in 1999 will now, on average, have spent over £38,000 in Stamp Duty over their lifetime and the typical Stamp Duty bill for a third stepper has fallen by £2,500 or 26% over the past year due to December’s reform of the tax. The research from Lloyds Bank shows that overall revenue raised increased by an estimated £1.5 billion, comfortably exceeding the £6.2 billion in the year to March 2008 at the peak of the last housing boom. In contrast, in the 12 months to March 1999, less than £1 billion was raised. A higher number of residential property transactions and increased prices are estimated to have led to a significant rise in Stamp Duty and the research also found that home owners stay in their homes for just under eight years on average, and take three steps up the ladder in their lifetime. The proportion of first time buyers paying Stamp Duty has more than doubled over the past 16 years from 32% in 1999 to 66% in 2015. In London and the South East over nine in 10 first time buyers now face paying Stamp Duty on their purchase. The proportion of home movers paying Stamp Duty has risen from 68% in 1999 to 85% in 2015. In the southern regions of England more than nine out of 10 home movers now pay Stamp Duty on their purchase. The highest overall Stamp Duty costs are faced by buyers in London and the South East. In London home buyers pay four times as much as the average for England and Wales at £38,600 while in the South East the lifetime cost is £22,800. The lowest lifetime Stamp Duty costs are in Wales which, at an average of £3,800, are less than 40% of the England and Wales average. Home owners in the North and East Midlands both at £4,000 and Yorkshire and the Humber at £4,500 face the next lowest Stamp Duty charges. Based on regional average house prices for typical first time buyer homes in 1999, Stamp Duty was only a factor for those first time in London and the South East. By the time these people were ready to move on to their next home (in 2007), the average Stamp Duty for their new property had risen to £2,283. In May 2015, those buyers moving on to their ‘final’ home faced an average Stamp Duty bill of £7,400, some £2,500 or 26% lower than in May 2014. The decline in Stamp Duty is due to the reforms that were implemented last December. Under the new progressive structure of Stamp Duty no tax is paid on any of the value of a property below the… Continue reading
Average prices in England and Wales up 0.4% in May to new high
Average house prices in England and Wales increased by 0.4% in May to reach a new high of £277,178, the fourth price record set this year, the latest index data shows. However monthly property price growth is still only a third what it was a year ago, according to the LSL house price index. Year on year price were up 4.5% and excluding London the annual growth was 4.4% as London was knocked into fourth place with price rises accelerating in North of England. Only a few months ago price rises in London were skewing the annual figure, but not anymore. Indeed, the data shows that home values in Kensington and Chelsea are now 16% below their peak in the autumn 2014. The LSL index data also shows that home sales were down 14% year on year in May as a lack of supply suppresses housing market activity. Adrian Gill, director of Reeds Rains and Your Move estate agents, pointed out that the 0.4% boost in compares to 1.2% at the same point 12 months ago, but he believes that the recovery is still underway. He also pointed out that there are now only four regions across the country where house prices are still dallying below 2007/2008 benchmarks and it is those areas which have most catching up to do and where price increases have typically been smaller, where growth is now accelerating. For instance, while average property values in the North are still 4% lower than during the pre-crisis years, this region has experienced the fastest increase in the rate of annual growth recently, up from 2.3% in March to 3.6% in April. Price rises in the North West, South West, and East Midlands are also on the up, at the same time that growth in London is waning. ‘This has knocked the capital back into fourth position in the rankings of regional house price growth over the past 12 with the annual rise in London estimated to now be less than 12% of what it was in of July last year and 2.4% in May 2015, down from 20.7% in the summer of 2014,’ explained Gill. He also explained that on a monthly basis, London house prices have dropped for the third successive month since the start of the year. It is the higher priced boroughs which have seen the biggest price falls, and Gill said this is a side effect of costlier stamp duty on top-end properties. For example, home values in Kensington and Chelsea, the most expensive London borough, have dropped 6% in the past year, and are now 16% below their peak in September 2014. This falloff at the top tiers of the market has cooled activity levels too. Home sales in London have dropped 16% year on year in the three months to April 2015, the most significant drop-off of all regions. Continue reading
UK’s regional office investment market strengthening
The UK’s regional office investment market experienced a slow start at the beginning of the year but investor appetite strengthened, according to the latest analysis of this market. Indeed, turnover in the investment market reached £1.48 billion in the first quarter of 2015, s almost double the turnover during the same period last year, and 5% higher than the previous quarter and the highest single quarter since the end of 2006. The regional office market report from Knight Frank also shows that Birmingham and Manchester proved to be the most popular destination for investors in the first quarter of 2015 with two major transactions of £131 million and £92 million. The report points out that given the substantial weight of money targeting regional offices, and following further yield compression both Birmingham and Manchester now command a premium over the UK’s other core markets, at 5%. These cities are closely followed by Bristol and Leeds, at 5.25%. At the other end of the spectrum prime office yields in Sheffield moved up 50 bps to 6.75% in the first quarter. This gives a 175 bps spread of prime yields, which is the largest seen in over 10 years since the fourth quarter of 2003. However the report also points out that prime headline rents remain under upward pressure. Two markets saw headline rents increase during the first quarter, with Birmingham rising to £30.50 per square foot and Leeds to £26 per square foot. The firm anticipates further rises in office rents during the remainder of the year and given current named requirements of 4.58 million square feet, which is the highest in five years, it expects to see higher levels of occupational demand in the second quarter back above the five year average. ‘We could potentially be heading towards a perfect storm of improving occupational markets and sustained capital markets, which hopefully will trigger new developments .With the growth of PRS also, this will be provide a major boost to regeneration schemes,’ said Stephen Hodgson, head of regional offices, Knight Frank. Continue reading
