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More British buyers in top end of UK country house market
British buyers are active again in the top end of the UK’s country house market, making up two thirds of buyers in the five million pounds plus sector since the start of the year. This compares to less than half of this market in the same timescale last year, according to research by leading international real estate firm Knight Frank. The figures show that British buyers have become a more regular feature in the super prime country house market this year, accounting for 71% of all sales since the start of 2014. In 2013 they accounted for just 46% of the market. The improving UK economy and growing confidence in the property market outside of London over the course of the year have contributed to the rise in British buyers at this level of the market, according to Rupert Sweeting, head of Knight Frank Country. ‘The increase in mergers and acquisitions and the stock market has also encouraged UK national buyers to buy having been waiting in the wings for a while. Some company owners now feel they can invest their dividends in a home rather than keep them in reserve for their business,’ he said. ‘However, they have often had to outbid international buyers who whilst wanting to move to the UK for education, political and work reasons have found their currency a little weaker against the pound,’ he pointed out. Since the market low in 2009, super prime country homes have risen in value by around 12%, in prime central London price growth over the same period has been in excess of 70% making the country seem good value in comparison. The firm is starting to see an increase in the number of London buyers active at the top end of the country market, with some London dwellers choosing to take advantage of record prices in the Capital and spend their budgets on large country properties. As well as rising demand from domestic buyers, demand from Asia has increased. Chinese buyers have accounted for 6% of the market since the start of 2014, up from 0% last year and 2% in 2012. While economic conditions in the UK are favourable, the political backdrop has become more unpredictable, the firm also pointed out. Taxation, for example, is likely to become more of an issue in the run-up to the general election and could have a direct impact on the demand for luxury property and on price performance. Continue reading
A mansion tax in the UK would mostly affect owners in London and South East
The announcement by the UK’s Shadow Chancellor that the Labour Party will impose a mansion tax on homes over £2 million will put a heavy burden on home owners in London and the South East. Ed Balls has announced that if Labour wins the general election next year the tax will be introduced and the revenue used to increase spending on services such as the NHS. ‘We will do it in a fair, sensible and proportionate way, raising the limit each year in line with average rises in house prices,’ he said. He claimed it was not right that a ‘billionaire overseas buyer of a £140 million penthouse in Westminster will pay just £26 a week in property tax’. Labour would not say how much the mansion tax would raise but the Liberal Democrats who have also raised the idea of a mansion tax calculated it raise £1.7 billion a year, but Labour’s higher bands for homes worth tens of millions could raise more. But with property prices having shot up in the past decade, families who moved into relatively affordable homes could suddenly face huge tax bills because their home has increased in value even if their income has not. Indeed, according to figures from the Halifax House Price Index, a property in Greater London bought for £500,000 in 1994, would now be worth £2,056,381 and according to the Centre for Policy Studies think tank, almost one third of properties worth more than £2 million have been owned by the same people for more than a decade, and around a sixth for more than 20 years. Almost 96% of the mansion tax burden would absorbed by London and the South East with more than 108,000 households nationwide affected by the proposed tax, according to leading property website Zoopla. After conducting analysis of all properties in the UK currently valued at more than £2 million, Zoopla found that in excess of 108,000 households would be liable for the annual levy, at an average of £15,000 each. Properties in London and the South East would account for the vast majority, 95.9%, of the additional £1.63 billion cost with the rest of the country contributing just 4.1%, or £66 million, of the total contribution. ‘The introduction of a mansion tax would disproportionately penalise home owners in London and the South East who are already responsible for the vast majority of property tax take in the UK,’ said Lawrence Hall of Zoopla. ‘With more than 100,000 homes to be affected by this new levy, it is somewhat misleading to call it a mansion tax when many three bed family homes in London and the South East would find themselves caught by it,’ he added. A mansion tax would distort the realities of who own homes in the £2 million plus bracket, according to Nick Leeming, chairman of national estate agents Jackson-Stops & Staff. ‘This will affect people all over the country, not just in… Continue reading
Asking price growth in UK slowing, latest index shows
UK asking prices increased by 0.2% in August, the eighth month in a row that they have moved upwards, the latest index shows. But asking price growth is slowing, especially in London and overall the average annual appreciation fell 0.3% to 9%, according to the data from Home.co.uk. But these headline figures mask some variation. London asking prices dipped under the weight of increased supply, ending a 20 month rally and average prices were unchanged in Scotland and the North West. Prices rose in all other English regions and Wales. Even within London there is considerable variation and overall the supply of property in the city is up 33% compared with August last year. Stratford tops the London property hotspot league, table with home prices leaping 45% over the last 12 months. Overall, the UK property market is cooling. The average asking price for a UK home has risen only 0.2% over the last month and 0.8% over the last three months. Correspondingly, London prices slipped 0.1% over the last month, yet have risen 9.8% over the last six months. The firm says that tightening mortgage credit in the wake of mortgage regulation, coupled with increased supply, has served to quench further growth in London home prices for the time being. ‘Home price inflation still persists outside of London but at an attenuated pace. Moreover, the surge in supply that has halted London price rises has not yet spread to adjacent regions,’ said Doug Shephard, director of Home.co.uk. The Asking Price Index also shows that certain regional property markets continue to be strong performers. East Anglia, the East Midlands, the South East and South West all show six month price rises of over 4%. Others, however, are showing much weaker price growth. Home prices in the North East are still falling behind inflation, rising only 1.2% over the last six months and by only 0.6% over the last year. Shephard also pointed out that across the UK, supply remains historically tight, showing a rise of only 3% on the already record low levels observed 12 months ago. Supply of properties entering the market fell the most in East Anglia, down 6% over the last 12 months. ‘Looking back further to 2007, we can see that it is actually the Greater London market that has contracted the most, by 65% over the last seven years, despite a recent surge in property entering the market,’ he explained. Of the regions, the East Anglia and South East property markets have contracted the most, down 63% and 62% respectively. Overall, the mainland UK property marketplace offers 55% less choice to buyers today than it did in 2007. Marketing times are beginning to rise across all regions and London, as is seasonally expected. However, further analysis across the regions reveals real improvement in every region compared to this month last year, although the relative pace of the regions remains highly diverse. Continue reading
