Tag Archives: stumbleupon
Scottish property industry wants more details of extra second home tax
There are calls in Scotland for further details on the extra 3% stamp duty tax to be made public as the introduction of the additional rates on top of LBTT is creating confusion. Towards the end of last year Scottish Finance Minister John Swinney announced as part of the Scottish budget that second homes, including buy to let, would face an additional 3% levy on top of the Land and Buildings Transaction Tax from April 2016. However, despite the introduction of the new tax being just months away there remains much confusion amongst landlords as well as buyers and vendors generally. The intention of the levy is to charge a higher rate on each band of LBTT if at the end of the day of the transaction an individual owns two or more residential properties. However, the higher rate will not be charged if the purchaser is replacing their main residences. The Scottish Government are keen to ensure that there are sufficient affordable opportunities for first time buyers to enter the property market but the surcharge is a blow to landlords who have also recently suffered the loss of the buy to let tax relief. George Lorimer, partner at CKD Galbraith, believes that the new levy will undoubtedly lead to a rush of buy to let purchasers looking to beat the April deadline, then to an anticipated drop in sale prices post April with sellers likely to be the ones bearing the lion’s share of the additional costs of the levy. ‘However, given the complete lack of real detail currently available about the new tax, those who do rush to buy or sell property before April are doing so without knowing exactly what the new rules will be. There are many anomalies requiring clarity but the silence from the Scottish Government has been deafening and there is little time left to debate the details of the new tax,’ he said. ‘Specific questions need to be answered on issues such as property owned by married couples and civil partners, second homes outside of the UK and also the logistics of joint purchases, just to name a few. Whilst as a firm we are well placed to advise our clients and those thinking of selling or buying before April, more information is urgently required to allow for informed decisions,’ he explained. The surcharge is also expected to impact tenants as rents increases to cover costs or less well-off landlords decide to sell rental property. Bob Cherry, partner at CKD Galbraith, pointed out that the new levy will have implications for current landlords looking to sell as well as act as yet another deterrent to would be landlords thinking about the market as an investment opportunity. ‘This measure, like the LBTT rises introduced earlier this year, is also a wealth tax on owners as buyers of buy to lets will seek to pass on the extra purchase costs by reducing the price they are prepared to… Continue reading
Value of US housing stock in 2015 down from overall growth the previous year
The value of all homes nationwide in the United States grew $1.1 trillion in 2015 and is expected to end the year at $28.5 trillion total. However, the value of the entire housing stock grew 4.1% in 2015, slower than the 6% growth in 2014, according to the data from real estate firm Zillow. The total value of all homes has regained $5.3 trillion since hitting its lowest point during the housing bust in December 2011, but is still $782 billion below the bubble peak value of $29.2 trillion, reached in October 2006. The dollar amount itself underscores the significance of housing to the US economy. In the third quarter of 2015, the US gross domestic product was $18.1 trillion, $10 trillion less than the total value of the housing stock. ‘This reminds us of the large role housing plays in the overall economy. Total home value growth slowed this year, but there was still a significant increase in overall value, and many markets are more valuable than they've ever been,’ said Zillow chief economist Svenja Gudell. ‘At the same time, more renter households and rising rents combined to set new records in rental spending in 2015. Americans are spending a lot of money on housing, and that will make affordability an important issue next year,’ she added. The research data shows that housing value isn't distributed equally across the country. California is home to about 12% of the population but the state accounts for nearly a quarter of the country's total home value, driven by highly valued markets like Los Angeles and San Francisco. Zillow data also shows that Americans shelled out nearly $20 billion more in rent in 2015 than in 2014 as people around the country set up 1.8 million new renter households and median monthly rents rose at a record pace. In all, renters spent $535 billion on rent in 2015, nearly as much as the total budget of the Department of Defence ($575 billion), according to a new Zillow rentals analysis. In 2014, they spent $516 billion. Renters of single family homes and apartments spent about the same amount on rent this year, with apartment renters paying $239 billion and single family home renters paying $245 billion. Renters in the New York/Northern New Jersey metro area spent the most on rent in 2015 at about $56 billion. Los Angeles area renters spent nearly $35 billion, and San Francisco renters spent $17 billion. About two thirds of the total rent paid in 2015 was spent in the 50 largest metros. Home values rose 3.9% annually in November to a Zillow Home Value Index of $183,000, according to Zillow's November Real Estate Market Reports. Denver home values grew fastest for the tenth consecutive month at 15.5% annual appreciation. Miami joined Dallas, San Francisco, San Jose, and Portland as other metros seeing double digit growth. Rents also continued their steady climb, growing 3.8% annually to a Zillow Rent Index of $1,382. The pace of rental… Continue reading
A year of above average leasing predicted for central London office market
The central London office market is set to experience another year of above average leasing and investment activity in 2016, according to a new report. However, some 22 million square feet of space could be needed in the next five years, says the analysis from international real estate advisor Savills. Low vacancy rates will help prime rents to climb, although a lack of new buildings capable of demanding the highest rents is likely to lead to topmost rents stabilising over the course of the year, the report explains. Whilst the gap between average prime City and West End rents continues to widen at £74.15 per square feet and £106.98 per square feet respectively, elsewhere there has been a marked convergence of rents on average Grade A/B office accommodation across Central London. This is likely to mean less movement of occupiers from West to East London or from core to fringe locations. Longer term, Savills predicts that population and economic growth, combined with lease expiries and building obsolescence, could lead to 22 million square feet of additional space being required in London over the next five years. Part of this demand will be serviced by four consecutive years of above average levels of completions in both the City and West End markets, although 21% of space in the City has been pre-let, and 15% in the West End. In the investment market, non-domestic investors attracted by London office’s relative stability and strong comparative returns will continue to drive demand, with 2016 set to be above average in terms of investment volumes. Despite stock market volatility and concerns over a slowdown in the Chinese economy those international investors who have been canvassed continue to identity London as a core focus for their future direct investment activity, with Savills predicting further capital flows from the Middle East, China and North America. Notwithstanding the continued appetite from overseas, Savills expects the market to consolidate around an appetite for core plus and value-add opportunities and therefore a continued sharpening of prime yields, currently at 3% in the City and 4% in the West End, is unlikely to continue. Volumes may well fall as the market becomes more hesitant in the lead up to the outcome of a Brexit referendum. ‘We predict that the Central London office markets will see above average take-up, rental growth and investment volumes in 2016, but these increases will not be as notable as they have been in recent years,’ said Mat Oakley, head of commercial research at Savills. ‘We don’t foresee that an increase in the Bank of England’s base rate will have an impact on yields whilst rents continue to rise. As with the investment market, the leasing market may slow due to external factors such as further ripples from China’s slowdown and a drop in business confidence in anticipation of a Brexit referendum,’ he added. Continue reading
