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New five year forecast predicts 30% rise in average house prices in England and Wales
Average house prices in England and Wales are set to increase by 30% in the next five years, with the national forecast reinforcing the north/south divide, new research suggests. While prices in London are set to rise by almost 33%, the real beneficiary of the recent London boom will be the South East, forecast to increase by 37% by 2019, says the latest report from Rightmove. The North West will be the slowest riser but will still go up by 24%, adds the new forecast comes from a collaboration between the property website Rightmove and economic forecaster Oxford Economics. It is described as the most comprehensive house price forecast of its kind ever created, based on property and economic data rather than opinion and short term market factors. It takes into account both asking and sold prices, surveyor valuations and analytics from the Oxford Economics’ Global, Industry and Regional forecasting models. The majority of fastest performing areas are all within easy commuting distance of London and include towns such as Southampton which is forecast to see price increases of 43%, Luton at 41% and Brighton also at 41%. The analysis also says that the Home Counties and outer boroughs are set to benefit from the ripple effect of a year of strongly rising prices in London, alongside the brighter economic picture. Prices in the capital itself are forecast to rise at a slower rate than the South East and East Anglia with prime central London having a period of much slower growth after the frenetic increases of 2014. West London is predicted to be caught in the prime London slowdown with a modest rise of 14%, bringing its potential for future growth in line with the slower northern cities of Carlisle with growth of 17% and Manchester with a price growth forecast of 19%. The forecast compares and contrasts the fortunes of neighbouring areas, and takes into account the effect of strong house price growth in one location spilling over into adjoining areas. Economic factors that are more significant in some markets than others are also considered, for example the exchange rate has a big effect on house prices in prime central London, but is of rather less direct importance in the wider suburban markets of the South East and further afield, where employment and population growth are key. ‘Alongside the publication of the Rightmove monthly House Price Index which is based on new seller asking prices, we have unique access to other sources of property data from surveyors and property transaction prices at a very local level. This has enabled us to work with Oxford Economics to create a unique forecast that can be used as a guide by a number of businesses,’ said Miles Shipside, Rightmove director and housing market analyst. ‘Understanding the path of future house price growth is a key element of UK economic strategy and decision making, and our data driven forecasts contain insight not previously available from other commentators or the Government’s own… Continue reading
New research reveals what new home owners spend their money on
Over two thirds of first time buyers and home movers are spending up to £2,500 on their first project in their new home, according to new research. Overall 71% are paying out. Some 33% do so on new paintwork or wallpaper, 15% on carpets, 6% on kitchen renovations5% on a new central heating system and 5% on new fitted windows, the survey from TSB shows. Half of those surveyed, 49%, considered it essential for this first project to be carried out in their new home while 27% also felt that it would make the house feel more homely in the short term. When moving into a new home 37% stated that they would prioritise any changes to the lounge first, followed by 18% doing work on a bedroom, 16% on the kitchen and then 8% on the toilet or bathroom. When it comes to what they spend some 19% bought white goods and the same percentage bought carpets. Some 14% opted for window coverings and 11% a new sofa. New carpets are particularly popular amongst the older generation with 27% of those aged 55 and over doing so, compared with 10% of 18 to 24 year olds. The younger group prefer to spend their money on white goods. Ian Ramsden, director of TSB Mortgages Director, said the lender is focused on supporting customers with the costs associated with buying a home and is helping with a significant cost, such as Council Tax for the first year. ‘It means our customers have the opportunity to spend the money that they have saved on other aspects of home ownership, such as redecoration and furnishings. We know people often have to undertake significant projects in their new home,’ he explained. TSB has recently launched a new campaign to encourage people to ‘Borrow Well’ helping them to borrow money in a way that makes the best financial sense for them. This means that all TSB customers receive the right information so that they can make informed decisions. TSB also offers assistance for people whose mortgage application has been rejected, helping them understand the reasons behind the decline and assisting them wherever possible. Continue reading
New property tax rates for Scotland announced
A new Land and Buildings Transaction Tax (LBTT) is set to replace Stamp Duty (SDLT) for Scottish residential and non-residential property sales in April of next year. LBTT, which received Royal Assent in the summer of 2013, is part of the Scottish Government’s devolved tax raising powers and was not dependent on the outcome of the referendum and applies to Scotland only. The rates announced by the Cabinet Secretary for Finance, John Swinney, mean that many home owners at the lower end of the property market in Scotland will be better off when the progressive tax replaces the much criticised Stamp Duty which is a slab tax. In a move designed to help first time buyers, the threshold for LBTT is set at £135,000, up from the stamp duty threshold of £125,000. A marginal tax of 2% would apply to the proportion of a transaction between £135,000 and £250,000, while a 10% rate will apply to those between £250,000 and £1 million. There will be a new 12% tax on properties costing more than £1 million. ‘As a result of the rates I have announced today, nobody will pay tax on the first £135,000 of their house purchase. Some 5,000 more transactions will be taken out of tax, supporting first-time buyers and those buying properties in the affordable market,’ said Swinney. But others will pay more. According to Savills Research, buyers in Edinburgh, where an average family house costs around £363,000, will be paying £13,600 in tax under the new system, which is 25% more than they would have paid in Stamp Duty. Buyers of properties of £450,000, will now pay 65% more at £22,300. Taking all properties into consideration across Scotland from above £125,000, the new LBTT payments on residential property transactions will be on average 56% more than the existing stamp duty. ‘We welcome a progressive new system and the fact that the majority of home owners will be better off. When compared with other parts of the UK house prices in Scotland remain comparatively low. However for some sections of the market the new rates are not good news, and it comes at a time when the Prime Scottish market is only just beginning to recover,’ said Savills head of residential in Scotland Andrew Perratt. ‘Young families who need to live in the prime hubs of Edinburgh, Aberdeenshire and Glasgow’s west end, where average house prices are considerably higher, the proposed increases are so punitive they may discourage many buyers from moving. In view of this, we anticipate increased market activity between now and the spring, whereby buyers are likely to make quick and committed decisions before the new tax comes into force in April,’ he explained. ‘With the referendum now behind us, the Scottish market has been poised for a healthy recovery. However this relies on activity at both ends of the market, not just from first time buyers, and the new tax will… Continue reading
