Tag Archives: real-estate
Prime central London rental values flat for second month in a row
Rental values in prime central London were flat for the second consecutive month in December as a seasonal year end slowdown and the impact of global economic uncertainty dampened demand. Though monthly growth slowed to zero by the end of the year, the annual increase in rental values was 3.3%, which was the highest rate in three years, the rental index from Knight Frank shows. It points out that annual growth has been climbing steadily since July as the UK economy improved and some buyers switched to the rental market while political uncertainty surrounds the outcome of the general election in May and the prospect of further property taxes remains. ‘However, while the UK’s economic indicators have improved, caution surrounded the world economy in the last quarter of the year, including falling oil prices and the economic outlook in China and the euro zone,’ said Tom Bill, head of London residential research at Knight Frank. ‘The result is that companies or individuals are more likely to postpone decision making while they wait for clarity,’ he added. The report points out that other factors affecting the market include the falling price of oil, events in Syria and Hong Kong, the Ebola outbreak and concerns the Federal Reserve in the United States was going to raise interest rates sooner than expected. ‘Despite this uncertain global economic and political backdrop, prime central London residential property remained a sound investment in 2014,’ said Bill. ‘Total returns, which include rental income and capital value growth, outperformed a series of other asset classes in the year to November, proving its resilience as an investment. For example, while commodity prices have fallen markedly, partly due to concerns over the Chinese economy, demand among Chinese tenants and buyers for prime central London property has increased, buoyed by its safe haven appeal,’ he explained. ‘This is underlined by the fact the number of Chinese tenants increased by almost fourfold in 2014 compared to 2013,’ he added. Continue reading
UK house prices up 10% in year to November 2014, ONS data shows
UK house prices increased by 10% in the year to November 2014, down from 10.4% in the previous month, the latest data from the Office of National Statistics shows. House price annual inflation was 10.4% in England, 3.1% in Wales, 4.4% in Scotland and 11.7% in Northern Ireland, the data also shows. Overall house prices continue to increase strongly across the majority of the UK, with prices in London again showing the highest growth. Indeed, house price increases in England were driven by an annual increase in London of 15.3% and to a lesser extent increases in the East at 11.9% and the South East at 10.8%. Excluding London and the South East, UK house prices increased by 7.1% in the 12 months to November 2014. On a seasonally adjusted basis, average house prices increased by 0.2% between October and November 2014. The index also reveals that in November 2014, prices paid by first time buyers were 11% higher on average than in November 2013. For owner occupiers (existing owners), prices increased by 9.5% for the same period. Peter Rollings, chief executive officer of Marsh & Parsons, said that with property price growth slowing it mustnot be forgotten that the market has seen a double-digit rise in home values over the past 12 months and this an impressive leap. 'After the exertions of the summer months, this is simply a period of natural re-calibration, restoring a more sustainable pace of price inflation. Growth is still ticking along in the right direction, with a steadier 0.2% climb in the month to November,' he explained. 'The first half of the year is typically the most energetic for the property market, and we’re already seeing reinvigorated demand in the new year, as more people turn their sights to getting their foot on the property ladder or moving home. Conditions are ripe for buying, with a rise in supply of property for sale, a relaxation in bank lending criteria and historically low mortgage rates ensuring less fraught competition for homes,' he added. Graham Davidson, managing director of Sequre Property Investment, said he was not surprised by the slowing rate of house prices over the course of November. ‘Whilst seasonality can account for some of this slight decline in growth, it was likely that prices in many places in the UK would have to start to slacken at some point. London and the South East in particular were bound to experience a slump, as the rate of increase simply could not continue,’ he pointed out. ‘As we are now less than six months away from a general election, there is some economic and political uncertainty within the UK which, coupled with the introduction of Capital Gains Tax for overseas buyers, may be putting off purchases by non-UK buyers and this in turn could have helped cool price rises,’ he explained. ‘The prospect of the Bank of England’s new powers announced in October to restrict… Continue reading
UK politians favour council tax change rather than new mansion tax
The majority of MPs in the UK believe additional higher rate council tax bands would be a better way to reform annual property taxes on high value homes than introducing a mansion tax. A survey found 69% back the council tax change while 75% agree with the need for a revaluation of council tax in general. The poll commissioned by the British Property Federation (BPF) also looked specifically at what Labour MPs think as it is the Labour Party that wants to introduce a mansion tax if it comes to power at the general election in May. It found that 39% of Labour Party’s MPs favour additional higher rate council tax bands over a mansion tax, despite the party championing the tax as one of its flagship policies ahead of the election. Just over half, 56%, thought a mansion tax would be preferable. The majority of the Liberal Democrat MPs surveyed, 89%, also prefer additional council tax bands to a mansion tax, as do 92% Conservative MPs. The Liberal Democrats first mooted the idea of a mansion tax in 2012. Asked separately whether they would support a revaluation of all homes to update council tax, 75% of MPs agreed. Support is strongest amongst Labour MPs at 87%, compared to 64% of Conservative MPs. It seems that this is a priority issue for MPs, with the majority, 53%, of those who would like to see reform preferring revaluation during the next parliament. The BPF has long made the case for council tax reform, pointing out that the 24 year old tax is still calculated on house prices in 1991. Since then, house price inflation has varied significantly, ranging from 160% to over 400% across England’s regions. It has urged policymakers to consider council tax revaluation and the addition of more council tax bands as a fairer and more efficient alternative to the mansion tax, which would be unfairly concentrated in London and could act as a deterrent to investment in the UK’s built environment. The BPF says that a council tax revaluation would be very easy to implement in the next Parliament because there is already legislative provision for it in the Local Government Act 2003. It would also accord with the advice of the Lyons Inquiry to Labour in 2007, which amongst its recommendations, suggested that a future government should revalue council tax and add new council tax bands, in order to update the tax base and improve fairness for taxpayers. ‘This poll shows that a full council tax revaluation rightly commands widespread political support, particularly across the Labour party, and that the majority of MPs recognise that basing council tax on 1991 house prices is simply unsustainable,’ said Ian Fletcher, director of policy at the British Property Federation. ‘The mansion tax is a political gimmick that is more about the narrative of rich vs the rest than anything else. Reforming council tax through a revaluation and raising revenue… Continue reading
