Tag Archives: real estate
Buy to let investors put off by UK government tax changes
Around one in four of people in the UK who were considering investing in a buy to let property have been put off by the Government’s plan to introduce a 3% additional stamp duty and cut tax relief on their finance costs, according to new research. Overall some 9% have given up on aspirations to own a buy to let property and 14% of existing landlords say they will sell one or more of the properties in their current portfolio because of the changes. The research by online investment platform rplan also found that 30% say they are planning to invest their buy to let deposit in an ISA instead. Under the changes, the stamp duty on buying a £250,000 buy to let property will rise from £2,500 to £10,000 from April, while that for a £400,000 property will more than double from £10,000 to £22,000. Also, from 2017, the tax relief currently allowed on finance costs such as interest payments on mortgages and loans to buy furnishings will be gradually reduced over four years. Those planning to invest in buy to let were going to use savings and investments worth an average of £43,592 to buy a property. Instead, 39% of these adults will use the money to save in a cash account, 30% will invest in an ISA, 20% will put it into their pension and 13% will put it in other stock market investments. Latest figures in the Bank of England’s Credit Conditions Survey have revealed a rush for buy to let properties before the new tax is introduced. Lenders reported that demand for secured lending for house purchase increased slightly in the fourth quarter of 2015 and is expected to increase in the first quarter of 2016. But within this, demand for buy to let lending increased significantly in the last three months of 2015. ‘The British have strong faith in property as an investment and many see it as a means of providing a pension income. But the government clearly has a policy to dis-incentivise BTL and the sharp increase in landlord mortgages revealed by the Bank of England credit survey will probably be a last rush before the gate slams shut,’ said Stuart Dyer. ‘Having a buy to let property can also mean an over exposure to one asset class for many investors, who should strongly consider the alternative of investing in a diversified portfolio for the long term, especially if this can be achieved through a tax free ISA wrapper,’ he added. Continue reading
Christchurch housing market well on way to recovery following earthquakes five years ago
Five years after earthquakes devastate the New Zealand city of Christchurch it has been announced that housing is now on track for a full recovery. Housing has been one of the most complex and challenging problems in the aftermath of the disasters that struck in 2010, according to housing officials and ministers but they added that the Government’s wide ranging support as ensured the city’s housing market is nearing recovery five years. ‘The Government has taken a step by step approach and officials project that by June 2017, the Christchurch housing market will be fully recovered with supply and demand back in balance,’ said Building and Housing Minister Nick Smith. The Government’s housing initiatives in Christchurch since the earthquakes include the Establishment of the Canterbury Earthquake Temporary Accommodation Service (CETAS), which has helped nearly 6500 households find temporary accommodation. Temporary accommodation financial assistance of over $55 million was provided to over 3,200 households and the Residential Advisory Service has helped over 3,288 residential property owners progress their repair, rebuild, and resettlement process. Over 1,000 were put in temporary accommodation, some 27,000 emergency repairs carried out on Housing New Zealand homes, and some $31 million in grants provided for social and affordable housing in Canterbury. ‘As some of the most vulnerable residents, social housing tenants were particularly hard hit by the earthquakes. Housing New Zealand’s effort fixing its houses was staggering, spending $350 million repairing over 5,100 properties,’ said Social Housing Minister Paula Bennett. Smith said that the strongest evidence of the successful recovery of Christchurch’s housing market is the latest data on rents and house prices. House prices rose by up to 13% per year following the earthquakes but grew last year by 2.7% and are now back below the national average. Rents were growing at up to 16% per year following the earthquakes but have been declining since October 2014 and in the past year, have dropped by 6%. ‘Housing was one of the biggest post-quake challenges facing Christchurch, but a concerted effort by the community, building sector, council and Government has enabled us to recover as quickly as practically possible,’ he explained. ‘With the completion of projects in the pipeline, Christchurch will have, by 2017, the safest and warmest stock of private, state and community housing in the country,’ he added. Continue reading
House purchase lending fell in London in 2015, latest CML data shows
London is often regarded as the powerhouse of the UK property market but new data shows that house purchase lending in the city fell in 2015 in comparison with the previous year. But remortgaging increased, according to the latest data from the Council of Mortgage Lenders covering the fourth quarter of 2015. There were 21,800 home owner house purchase loans, down 4% on the third quarter but up 5% compared to the fourth quarter 2014. These loans were worth £6.7 billion, down 7% quarter on quarter but up 16% year on year. First time buyers took out 12,000 loans in London, down 2% on the previous quarter but up 1% on the fourth quarter in 2014. These loans totalled £3.2 billion, down 4% on the third quarter but up 11% on the fourth quarter of 2014. Home movers in London took out 9,800 loans worth £3.6 billion, down 7% by volume and 9% by value on the previous quarter. Compared to the fourth quarter 2014, this was up 11% by volume and 22% by value. Remortgage lending increased 5% by volume and 8% by value compared to quarter three totalling £3.8 billion with 13,100 loans, up 34% in number of loans and 53% in amount borrowed for remortgage compared to the fourth quarter of 2014. The number of loans for home owner house purchase in London decreased year on year to 81,600 loans at £24.5 billion, down 5% by volume but up 1% by value on 2014. First time buyers took out 45,600, worth £11.6 billion, down 6% by number of loans and 1% by amount borrowed compared to 2014. Home movers took out 35,900 loans worth £12.9 billion, down 3% by volume but up 4% by value year on year. Remortgage lending totalled 48,600 loans worth £13.7 billion, up 14% by volume and 25% by value on 2014. ‘House purchase lending in London fell in 2015 due mainly to a slow start. Later months of the year saw activity pick up again. Persisting supply and affordability issues, alongside the introduction of the Help to Buy London scheme, means there will be some uncertainty around how the market will perform going into 2016,’ said Paul Smee, director general of the CML. ‘By contrast, remortgage activity, which has been consistently flat for the past few years, appears to be on an upward trend. Competitive mortgage rates appear to have sparked this activity and we have not seen quarterly volumes at this level since 2009,’ he added. Continue reading
