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Pension changes could boost buy to let in UK
Pension regulation changes in the UK could boost the buy to let market as so called silver landlords decide to invest in the sector, it is claimed. Some 32% of people aged 45 to 64 with a pension would consider using some or all of their pension pot to fund a buy to let property as an alternative to a more traditional pension fund, according to research by Direct Line for Business (DL4B). It highlights that the number of 'silver landlords' could increase significantly given the changes in pension regulation which mean that from April 2015, people approaching retirement and pensioners will be able to access as much or as little as they want from their pension pots. Buy to let is becoming an attractive option for people, especially while property and rents rise, according to property lettings expert, Kate Faulkner, as it can deliver some great returns over 15 to 20 years. ‘Given the recent pension liberation announcement, for some it could be good to diversify their investments when approaching retirement, but landlords need to seek financial/expert advice and ensure they understand the returns that property can deliver and especially the tax implications,’ she said. As property and rental prices continue to rise, buy to let can provide a regular income flow while also offering the opportunity for capital appreciation. The research shows that 43% of potential 'silver landlords' would consider it on the basis that it produces regular income. Some 23% are attracted by the perceived security of the investment, 17% by the expected capital appreciation and 9% of potential buy to let investors favour the investment because they would like to invest in something that will allow them to leave an inheritance to their children. The research highlighted the perceived high returns available for landlords as those approaching retirement anticipate an average (median) yield of between 10% and 14% on their investment. ‘Buy to let can be a flexible investment, providing an immediate source of income as well as being a long term asset. As such, it is understandable that people approaching retirement age are considering investing their pension pots in property,’ said Jazz Gakhal, head of Direct Line for Business. ‘However, prospective landlords should understand that buy to let does not come without financial risk. Legal expenses for repossessions and potential damage to property are but just a few of the costs that can take significant chunks out of landlords' annual yield,’ he pointed out. ‘Taking the necessary precautions such as carrying out full reference checks on prospective tenants, inspecting your rental property regularly, and taking out landlord insurance can help to minimise some of the risks faced by landlords,’ he added. Continue reading
Special development corporation set up for strategic west London site
Plans for a major development in West London with up to 24,000 new homes have moved another step closer with the creation of a development corporation at a time when the city needs new housing. The Mayor of London has written to the Secretary of State for Communities and Local Government Eric Pickles confirming his plans to establish the Old Oak and Park Royal Development Corporation (OPDC). The Secretary of State will now lay an order before Parliament in early 2015 to create the OPDC. It is expected that the new body will come into existence with full planning powers over the entire site on 01 April 2015. A vast High Speed 2 (HS2) and Crossrail Station is due to be constructed at Old Oak Common by 2026. The new station will be the size of Waterloo, handling 250,000 passengers a day and acting as a super hub between London and the rest of the UK, Europe and the world. This represents an opportunity to bring unprecedented regeneration to the area and the Mayor believes that the OPDC is the best way to unlock the enormous potential of the site and deliver a £15 billion boost to London's economy over 30 years. The Corporation will act as a single, transparent and robust body to spearhead the regeneration of the 950 hectare site that straddles the boroughs of Hammersmith and Fulham, Brent and Ealing. ‘By 2030 the sprawling industrial land at Old Oak Common could be a thriving new district teeming with tens of thousands of new homes and jobs and a rail station the size of Waterloo. This is a once in a lifetime opportunity to transform this site and there is no doubt that a Mayoral Development Corporation is the best way to unlock its enormous potential,’ said Mayor Boris Johnson. The OPDC will look to emulate the success of the London Legacy Development Corporation that continues to lead the post-Olympic regeneration of Stratford and East London. The Mayor's Office believes that the regeneration opportunity could provide almost 14 per cent of Greater London's employment needs up to 2031. Five of the nation's airports will be linked to the high speed rail network for the first time through the Old Oak Common Station. Central London and Heathrow will be just 10 minutes away, Birmingham will be 40 minutes direct from Old Oak Common and Luton, Gatwick and City Airport will all be within 45 minutes. As well as promoting and delivering physical, social, economic and environmental regeneration, the Corporation will also safeguard and develop Park Royal as a strategic industrial location and attract long term investment to the area, including from overseas. Once established, the proposed OPDC would take on various statutory powers relating to infrastructure, regeneration, land acquisitions and financial assistance. It would also take on planning powers across the Old Oak and Park Royal area, including determination of planning applications. The Corporation will also be able to set a Community… Continue reading
Home sales fall in Miami after two months of significant growth
After two months of significant growth, home sales in Miami fell by 9.2% in November but prices are still rising, but at a slower pace than before. Miami has been one area in the United States that has been leading the real estate recovery but some properties are now seeing demand fall, according to data from the Miami Association of Realtors. While sales of single family homes decreased a negligible 1% compared to a year ago, condo sales were down 15.5% while combined sales were down 9.2%. ‘We are experiencing more moderate growth, which reflects a healthier market and more balance between buyers and sellers, in Miami sales remain strong compared to the record sales activity of the previous three years,’ said Liza Mendez, chairman of the board of the Miami Association of Realtors. Single family home prices, which again increased in November year on year, remain at affordable 2004 levels despite three years of consistent year on year increases. Condo prices also increased in November, marking 41 months of growth in the last 42 months. The median sale price for single family homes increased 5.4% to $245,000 from $232,000 in November 2013. The average sale price for single family homes increased 8% from $366,309 in November 2013 to $395,786 last month. Compared to November 2013, the median sale price for condominiums also increased 5.4% to $189,777 from $180,000 a year prior. The average sale price for condominiums increased 11.9% to $311,323 from $348,290 in November 2013. The data also shows that Miami properties continue to sell rapidly and at nearly asking price, reflecting strong demand. The median number of days on the market for single family homes sold in November was just 47 days, an increase of 20.5% from November 2013. The average percent of original list price received was 93.9%, down a negligible 2.3% from a year earlier. The median number of days on the market for condominiums sold in November was 57 days, an increase of 29.5% compared to the same period in 2013. The average sales price was 93.9% of the asking price, a decrease of 2.6%. Cash sales in Miami continue to decline and the association said this is because more financing becomes available. Still, access to mortgage loans for condominium buyers remains limited, impeding further market strengthening. In Miami-Dade County, 53.3% of total closed sales in November were all cash transactions, compared to 61.7% in November 2013. Cash sales in Miami are still double the national figure of 25%. All cash sales accounted for 41.7% of single family home and 63.8% of condominium closings, compared to a year earlier when cash sales were 46.7% of single family home sales and 73.2% of condominium sales. Since nearly 90% of foreign buyers in Florida purchase properties all cash, this continues to reflect the much stronger presence of international buyers in the Miami real estate market. While traditional sales continue to increase, distressed property transactions in November again declined in Miami-Dade due to fewer short… Continue reading
