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Average rental prices in London reach over £1,400 a month
Rental values in London have risen by 4.67% since June 2015, with the average rental price for a property in the capital standing at £1,467 compared to £1,402 in the summer, the latest figures show. Greenwich saw the largest increase taking the average rent to £1,397 per month, according to the Rentify Property Index. The firm said that this could be due to the time of year when students are starting back at university. Other areas that experienced considerable rental uplifts include Brent, with average rents in the North West London borough growing by £201 to almost £1,500 per month. Next was Newham with an increase of £197 taking the average rent to £1,378 per calendar month, then Lewisham with an increase of £194 taking the average rent to £1,305 and Lambeth with an increase of £182 to an average rent of £1,617. Areas that saw a fall in rent included Wandsworth where the average rent fell by £33, and Kingston-upon-Thames, with the average rent in the area falling by almost £90 to £1,237. Homes in the City of London have also experienced what the firm described as an unprecedented dip in price, with the average monthly rent dropping £185 to £2,149. Although this can’t be considered a long term decline, the figures do highlight seasonality in the market, according to the report, which adds that the dip in costs could be in part attributed to the school calendar, with families moving to ensure they secure the best postcode possible for their child’s education during the summer months. The data also showed how strong rental demand is across the capital. Bexley proved to be the most popular area for property hunters with an average of 10 people viewing each home in the borough each day, whilst other outer London boroughs such as Enfield and Haringey, both seeing an average of 9.6 viewers per day, also generating huge interest. ‘High cost of rent in central London is continuing to drive people away to outer boroughs in search of affordable housing. This however means that these so called cheaper locations are seeing a remarkable rise in rent due to their popularity. They are hot on the heels with central London due to strong demand,’ said Rentify chief executive officer George Spencer. ‘Furthermore, the recent buy to let tax hike introduced by the Chancellor will further constrain supply as less people invest in property to rent, making life increasingly hard for Londoners,’ he added. Continue reading
New planning reforms in UK welcomed, but lack of resources not addressed
The British Property Federation has welcomed the majority of the changes announced in the autumn financial statement by the UK Chancellor but expressed disappointment that there was no mention of a review of planning fees. ‘While there are some really sensible suggestions in today’s announcement, the planning system still has one big problem, the lack of resources in local authority planning departments,’ said Melanie Leech, chief executive of the BPF. ‘Both the private and public sector have identified this as one of the biggest obstacles for development, and with the private sector willing to discuss how it might be able to plug the funding gap, it is frustrating that Government has not engaged on this matter,’ she added. Included in the statement was amendments to planning policy to ensure the release of unused and previously undeveloped commercial, retail and industrial land for Starter Homes, and support for the regeneration of previously developed, brownfield sites in the greenbelt, by allowing them to be developed in the same way as brownfield sites elsewhere, providing it delivers Starter Homes. It will be subject to local consultation, such as through neighbourhood plans and Leech described it as a ‘very sensible step’ and one that will put a stop to endless battles in the planning regime as well as bringing forward the Government’s intended 200,000 Starter Homes. ‘The sites that will be eligible for this will not be lush green fields, but rather disused scrap yards and car parks which happen to sit within the Green Belt, and which are calling out to be more productively used,’ she pointed out. There will also be the establishment of a new delivery test on local authorities, to ensure delivery against the number of homes set out in Local Plans. The BPF believes that Local Plans are the key to sustainable development. Leech said it will ensure that local authorities really do concentrate on growth for their area and that their local plans are focused on delivery and the practicalities of housing the population. ‘The lack of resources afflicting local authority planning departments is an issue, and if authorities can keep their local plans kept short and sharp, they will help themselves,’ she added. The changes will also see the release of public sector land with capacity for 160,000 homes representing a more than 50% increase on the government’s record in the last parliament ‘The homes that are brought forward on these sites must be serviced with sufficient infrastructure and will ideally have homes for sale and for rent, to ensure that they contribute to mixed, vibrant communities,’ said Leech. The government will bring forward proposals for a more standardised approach to viability assessments, and extend the ability to appeal against unviable section 106 agreements to 2018. It is well known that a lot of disagreement between local authorities and developers arise due to viability assessments so the move towards a standardised viability model should go a long way to… Continue reading
Sau Paulo has the highest property taxes for real estate investors
As the rate of price growth slows in many global city markets, transaction costs and taxation are becoming increasingly important considerations for investors, a new analysis suggests. With slower price growth forecast in a number of prime city markets, investors are looking more closely at the cost side of the investment equation, according to the report from international real estate firm Knight Frank. While there may be a number of factors behind the choice of location, the research shows that the tax burden across the cities in this report varies considerably both in amount and extent. The tax costs range from as low as 3.5% or 3.6% of the property price in year five in Monaco and Dubai respectively, to over 30% in Sao Paulo. Despite encompassing a wide variety of cities and policies, a number of common themes and trends have arisen throughout the research. For example, in some cities, most notably in Geneva and in Mumbai, there are significant legal restrictions for non-residents who wish to purchase property so it is important to consider these before an investment decision is made. In some jurisdictions, the tax costs are represented primarily by acquisition taxes, notably in Monaco and Dubai, while in most other jurisdictions, tax costs usually comprise acquisition duties payable when purchasing the property; wealth or yearly taxes when holding the property; taxes on rental income, and taxes on disposal of the property, including tax on gains and/or duties at the point of the sale of the property. While in some countries the relative/percentage tax costs are almost equal for both US$1 million and US$10 million properties, in others the tax costs of holding the US$10 million property are almost double those for US$1 million property, the report points out. ‘Finally, it is important to note that some taxes, such as inheritance/gift taxes have not been taken into account in this analysis. Nor were home country taxes. Moreover, we have assumed that investors purchase in their personal name but that might not necessarily be the most efficient from a host or investment country’s tax perspective,’ the report says. However, overall property costs remain largely the same for both a $1 million and $10 million property in many cities such as Sao Paulo, Mumbai and Geneva whilst others see a significant reduction in percentage terms at the $10 million level such as New York and Paris. Reviewing the tax costs across the 15 main cities shows that taxation is highest in Sao Paulo, at both the US$1 million and US$10 million levels, where investors are taxed at 31.5% of the sale value at year five. Hong Kong and Sydney also rank highly. An investor purchasing a US$1 million property in Hong Kong is taxed 22.4%, whilst at the US$10 million level investors in Sydney are taxed 26.0%, in both cases as a percentage of year five price. Monaco offers non-resident investors the lowest rate of tax at 3.5% as a percentage of… Continue reading
