TSI
Most accountants in UK think stamp duty property tax is still unfair
The majority of accountants in the UK still believe that the stamp duty regime on residential properties is unfair, despite the reforms announced by the Chancellor last year. The new system introduced in December overhauled how HMRC calculated stamp duty with the tax now only applying to the amount of the purchase price which fell within that particular duty band. This prevented purchasers of property valued slightly above a particular threshold being hit with a sudden increase leading it to be criticised as an anomalous ‘slab tax’. However, some 55% of accountants still believe the system is unfair, according to research from Bloomsbury Professional, a leading tax and accounting information group. Of these, the largest proportion, 22% argued that stamp duty ought to be set more locally, to reflect regional conditions and enable it to be used, for example, as a measure to either boost or control local property markets. A further 20% of accountants felt that stamp duty remains too high overall whilst 13% felt that the tax is too high for more expensive properties. ‘It is significant that the greater proportion of accountants still feel that the stamp duty system is in need of an overhaul. The recent Summer Budget did not address the imbalances that many accountants feel is impacting the residential property market,’ said Martin Casimir, managing director of Bloomsbury Professional. ‘The calls for stamp duty to be set locally are intriguing. The impact of such a change and how it could best be implemented is up for debate but it certainly shows that the devolution debate is becoming part of business’ mainstream thinking,’ he added. When the new stamp duty rates were announced the government stated that 98% of home owners would pay less after the charges and only those buying properties worth more that £937,000 would pay more. HMRC collected £10.7 billion in Stamp Duty tax in 2014/2015, a 36% increase over three years from £6.9 billion in 2012/2013. Continue reading
Housing demand in UK reaches 11 year high
H ousing demand in the UK has reached an 11 year high with the number of housing hunters registering with estate agents reaching almost 430 per branch at a time when fewer homes go on sale. The number of house hunters registered per branch of members of the National Association of Estate Agents reached 439 in June, the highest since August 2004, and sales to first time buyers fell. This is 15% more than in May when 383 house hunters were registered per branch and it comes at a time when supply of housing stock fell from 46 in May to just 44 houses available per branch, widening the growing gap between supply and demand. ‘What we’re seeing is a market that lulled over the general election period, coming back to life in full force,’ said Mark Hayward, managing director of the NAEA. ‘Buyers are feeling more confident and those who put their plans on hold over the election and political aftermath have kicked off their hunt, causing this massive jump in demand. There’s also an impetus to buy right now in light of the impending interest rate rise as buyers fight to buy and fix mortgage rates. But the fact that demand is at an eleven year high without the housing stock to fuel it, is bad news for the market,’ he added. The monthly NAEA report also shows that as the gap between supply and demand widened in May, activity remained consistent, with nine sales made on average per branch for the second month running. However, the number of sales made to first time buyers declined in June, with the group accounting for just 24% of sales, compared to 29% in May. ‘Although activity is still slow, it’s very promising to see that the surge in demand and dip in supply hasn’t caused activity to halt, and houses are still being sold. However, the growing gap between supply and demand is worrying and clearly demonstrates that more needs to be done to plug this. The election was full of promises to build more houses, but now those promises need to be put into bricks and mortar to respond to demand,’ Hayward explained. Continue reading
Average price of an affordable house in UK is almost £190,000
The average price paid for properties by buyers using the affordable housing schemes in the UK has reached almost £190,000, new research shows. The overall average price of £189,786 is just 4% or £7,750 lower than the £197,535 average for house purchases as a whole, the research from the Halifax shows. Regionally, the highest average price paid by buyers using affordable housing schemes is in London at £323,148 while the lowest is in the North of England at £147,437. Nevertheless, the average value of a London property sold in a scheme is 33% lower than the average London price of £482,579. The research also shows that first time buyers remain the biggest beneficiaries of Help to Buy housing schemes accounting for 80% of purchases over the last year compared with 46% of all mortgage financed home purchases made by first time buyers over the same period. In the last year, improving economic conditions and government schemes such as Help to Buy saw the highest number of first time buyers purchase their first home for seven years. The latest official figures reveal that Help to Buy equity loans and mortgage guarantee schemes and NewBuy have helped 99,601 buyers acquire a home since the introduction of Help to Buy in the 2013 Budget. Four out five or 79,680 of these purchases were completed by first time buyers. The average price paid by first time buyers using the schemes is now £150,361, some 10% or £16,732 lower than the average price paid by first time buyers for all housing which is £167,093. First time buyers in London see the largest benefits from buying through affordable housing schemes, with an average price that is 36% lower than the average price paid by first time buyers in the capital generally at £236,733 compared to £367,961. ‘Many of the affordable home ownership schemes available have been designed specifically to help first time buyers get on the ladder and support construction of new build homes and the latest official figures show this has been successful,’ said Craig McKinlay, mortgages director at the Halifax. ‘As the economy continues to recover and mortgage interest rates remain at very low levels. We expect to see continued growth in first time buyers during the second half of the year,’ he added. The research also looked at the profiles of borrowers buying a home under affordable housing schemes to find what typical scheme users are like. It found that 17% of affordable housing transactions in the 12 months to May 2015 were in Scotland followed by the South East at 15% and the North West at 10%. By comparison, some 20% of all housing transactions were concentrated in the South East, and 12 % were in Scotland and 10% were in London. The average gross annual income of a home buyer purchasing through an affordable housing scheme is £31,886, which is 5% lower than the average earnings for all those in full time employment at £33,475. Regionally,… Continue reading
