TSI
Miliband only UK political leader who would pay under mansion tax
With the general election campaign now underway in the UK research has found that Labour leader Ed Miliband lives in the most expensive house of all the main political party leaders. Labour want to introduce a new mansion tax if it wins the election in May and it has defined a mansion as being a property worth over £2 million. Yet it is only Miliband who lives in such a home. According to research by property website Zoopla, Miliband’s North London home is now worth £2.73 million, more than three times the average in the area. Conservative leader David Cameron’s West London home and Liberal Democrat Nick Clegg’s South London homes fall just short of the threshold applicable to the new proposed tax. Cameron’s home in West London is valued at £1.97 million while Clegg’s family home in South West London is valued at £1.89 million. UKIP chief Nigel Farage’s Kent home is currently valued at a more modest £550,000. However, each leader has seen the value of their home grow substantially since the last election, like most home owners across the country. Miliband has seen the value of his home increase by £1 million since the Conservative/Lib Dem coalition came to power, despite his apparent distaste for their economic policies. Cameron’s home has risen by £671,000 in value and Clegg’s by £573,000 during the same period. As things currently stand, Miliband would be the only current party leader required to pay the annual Mansion Tax mooted by the Labour party on properties worth in excess of £2 million, although house price rises could also soon nudge Cameron and Clegg into this territory. ‘Miliband’s home is in a desirable part of London and is now worth a lot more than he paid for it before the last election. If Labour comes to power as his property tax bill is likely to rise by at least £3,000 per year,’ said Lawrence Hall of Zoopla. Continue reading
UK property sales could get boost from April pension changes
UK pension changes could trigger a significant increase in residential property transactions but for most households, this is unlikely to involve the acquisition of an investment property. But the increase in sales is more likely to come from continued trend of pensioners selling larger properties and properties in prime areas and purchasing smaller properties and properties in cheaper areas in order to release additional equity to help fund their retirement years, according to real estate firm Chestertons. In a new report it says that there are a number of reasons that property is likely to prove a popular investment choice for those who decide to take control of their pension pots and invest in something other than an annuity. These include the fact that residential property is generally seen as a less volatile and relatively safe long term investment, when compared to other assets such as equities and can provide a regular rental income. Also, a strong capital appreciation over the medium to long term is anticipated and property is a tangible asset that people generally feel more comfortable with and understand better than other more complicated investment vehicles. If estimates of demand turn out to be accurate then there is likely to be a near doubling in the number of pensioners buying at least one investment property and that would push house prices up. ‘If the properties purchased were then held as rental investments, this would help alleviate the current shortage of rented accommodation, which is especially prevalent in London, thereby stabilising the rental market somewhat,’ said Nick Barnes. However, he believes that financing a property investment is likely to prove difficult for many 55 plus year olds as lenders have been toughening their stance on borrowers who cannot repay their mortgage before retirement. ‘Buying properties with cash is of course an option, but with the average pension pot in the UK standing at just £25,000, the number of people with enough contributions to cover the cash purchase of a property will be very small, especially in London where prices are much higher,’ he explained. ‘The more likely scenario is that those looking to invest in property would need to supplement their pension pots by selling their existing property and either downsizing or moving to a cheaper area. This said, many pensioners have already taken these options and dipped into their pensions to help their children and grandchildren onto the property ladder so a significant uplift in activity is unlikely,’ he added. For those that can afford to buy an investment property, identifying the right property to ensure a longer term income stream and capital growth will be the challenge. Location and rentability are key issues and a realistic assessment of operating costs and voids will need to be made, the report points out. Barnes also said that tax liability is a further important consideration and owners will need to be aware that their rental income when added to their pension or… Continue reading
UK annual house price growth falls again
Annual house price growth in the UK slowed to 5.1% in March from 5.7% in February and prices were up just 0.1% month on month, according to the latest index figures. It means that annual house price growth has now slowed for seven months in a row, taking the average price of a property to £189,454, the data from the Nationwide Building Society shows. UK house prices are currently around 2% above their pre-crisis levels. However, the pace of housing market activity has remained subdued, with the number of mortgages approved for house purchase in January around 20% below the level prevailing a year ago. ‘Economic conditions have remained supportive, with labour market conditions continuing to improve and mortgage interest rates close to all-time lows,’ said Robert Gardner, Nationwide's chief economist. While house price growth has moderated across the UK, there is still significant regional variation. Prices in London and the South of England continued to see the strongest rates of annual growth, though there was a noticeable softening this quarter, particularly in London Price growth also continued to cool in the North West of England, Scotland and Wales, even though prices in these regions remain some way below their 2007 peak. Indeed, in annual terms, prices in Wales declined by 0.5% in the first quarter of 2015. A breakdown of the figures show that all regions except the North of England saw a further slowing in annual price growth in the first three months of 2015. Across the UK as a whole, prices rose by 0.6% over the quarter, after allowing for seasonal effects. Prices were up 5.9% compared with the first quarter of 2014. London remained the strongest performing region, with average prices up 12.7% year on year, although annual house price growth has slowed noticeably compared with recent quarters, with growth down from 17.8% in the fourth quarter of 2014. Amongst the other English regions, the Outer Metropolitan area continued to outperform, with annual price growth not far behind London at 12%. Yorkshire and Humberside was the weakest performing English region, with prices up 1.3% over the last 12 months. Northern Ireland saw a slowing in annual price growth to 5.7%, while annual price growth in Scotland moderated to 1.3%. Wales remained the weakest performing region and was also the only region to see a fall in average prices, which were down 0.5% compared with the first quarter of 2014. There was a further slowing in annual house price growth in Scotland, from 4.2% last quarter to 1.3% this quarter. Edinburgh was the best performing area, with prices up 11% on the previous year. The Highlands and Islands saw the weakest growth, with prices up 2%. The Land and Buildings Transaction Tax (LBTT) is set to be introduced in Scotland on 01 April. Under LBTT, those purchasing properties above £333,000 will pay more tax compared with marginal stamp duty land tax (SDLT) system now in use in the rest of the… Continue reading
