Uk
Research reveals high number of sellers who end up paying inheritance tax
One in four properties sold in England and Wales in 2015 were above the inheritance tax limit and the number sold for more than £325,000 have doubled since 2009, new research shows. Proportions were even higher in some locations, for example, 94% of properties sold in East Central London were over the inheritance tax nil-rate band, says the research from Saga Investment Services. The research also found that just one in 10 individuals can correctly identify the IHT threshold for a single person, and a mere 4% for married couples and civil partners. Just 10% correctly said £325,000, some 21% thought it was higher and 19% said it was lower, while 50% didn’t know. The report points out that new ‘main residence’ allowance to be introduced in April 2017 will benefit home owners. Overall the number of properties sold at prices above the £325,000 starting point has doubled over the past six years from 13% of properties in 2009 to 24% in 2015, according to the study which analysed six years’ worth of property sales data published by the Land Registry. Despite the number of property sales in 2015 decreasing by 3.7% compared to 2014, sales exceeding £325,000 have soared by 11.4% over the same period. A breakdown of the figures show that after East Central London the next location with the highest number of property sales over the IHT threshold is West London with 90%, then South West London at 88%, the West End of London at 86% and North West London at 83%. But outside of central London, the proportion of properties sold above £325,000 has also been rising sharply. Some 28% of postcode areas have seen the number of property sales exceeding the IHT threshold double in the past six years, including Brighton, Bromley, Bristol, Cambridge, Colchester, Croydon, Durham, Northampton, Norwich, Portsmouth, Stevenage, Tweed, Uxbridge and Watford. For married couples and civil partners, any unused IHT allowance can be passed on to the surviving partner, meaning the total that can currently be handed over without a potential tax bill could be £650,000. Across England and Wales, the number of properties sold above this level has doubled since 2009, from 2.4% to 5.5%. There are 17 postcode areas in which one in every 10 properties sold in 2015 exceeded £650,000, compared to seven in 2009. In 2015 some 60% of all properties sold in the EC postcode area exceeded £650,000, up from 14% in 2009, while 56% of property sales in West End, 53% in West London and 44% of sales in South West London. The research also shows that just 4% of over 50s living in London correctly identified the IHT threshold for married couples and civil partners and 17% believed there was currently no maximum, while 20% thought the threshold was lower. On 06 April 2017 a new IHT allowance will be introduced for people passing on their main home to a direct descendant. This will rise each… Continue reading
Research reveals lack of formal tenancy agreements in UK for residential property
One in 10 private landlords in the UK has no formal tenancy agreement in place with their tenants, new research has found. And where contracts are in place, landlords may unwittingly be asking tenants to sign documents that are not legally compliant, according to the survey by landlord insurance provider Direct Line for Business. Of the landlords who don’t use a letting agent some 58% used adapted tenancy agreements from either old agent contracts or other landlords or an updated template they found online at 38% and 20% respectively. It appears landlords employ letting agents when they first rent out the property, then use the old contract template when agreeing a direct rental with new tenants or upon renewal with their existing tenants. The study suggests that a lack of professionally reviewed tenancy agreements may explain why 13% of landlords have experienced disputes specifically arising from tenants’ rental contracts in the last two years. Also concerning, it says, is that 9% of landlords have not informed their tenants that their deposit is held in a government backed tenancy deposit protection scheme (TDP). This is despite the fact it’s a legal requirement that landlords provide the name and contact details of the tenancy deposit protection scheme (TDP) and its dispute resolution service within 30 days of taking a deposit. The research also revealed that 4% of landlords have not taken any deposit from their tenants. ‘Tenants and landlords need a contract in place to protect both their interests. Contracts, deposits and deposit protection all help to make clear what is expected from each party when renting a property, and which can help minimise disputes where possible,’ said Nick Breton, head of Direct Line for Business. ‘If an old contract is adapted it may not comply with new legislation or be relevant for the current market. Given the volume of disputes arising from tenancy agreements it’s important to get the contract seen by a legal professional before it’s signed,’ he explained. ‘We understand that getting legal documents in place can be complicated which is why we’ve launched our new Legal Documents Service for landlords. Not only can this save landlords time and money, but creating the documents is both quick and easy, and most importantly, they can be reviewed by a Solicitors Regulation Authority (SRA) regulated law firm to ensure they are legally compliant. Based on our research of solicitor prices, it is estimated each landlord using the service would save over £250,’ he added. When it comes to rights and protection, 38% of landlords in England have never heard of the government’s How to rent: the checklist for renting in England, which explains the rights and responsibilities of landlords and tenants while less than a third of landlords have supplied or directed tenants to this guide. Direct Line for Business has launched a… Continue reading
Sales of property in prime central London record first rise of 2016
Transaction volumes in central London’s prime property market rose in March compared to last year, the first increase in 2016, new data shows. Sales were driven by buyers trying to beat the 3% stamp duty surcharge but year on year growth slowed to 0.8%, the lowest figure for more than six years, according to the latest report from real estate firm Knight Frank. The incentive to act before the April introduction of the new stamp duty rate on additional homes was one of the reasons Knight Frank sales volumes in March exceeded last year’s figure. This bucked the trend of the first quarter of 2016, where volumes were flat in January and marginally down in February. However, the other factor at play is a marked slowdown in the rate of annual growth over the last 18 months. ‘It is the result of a series of tax changes and a preceding period of exceptional growth, which is also a topic that is increasingly covered by the media. As a result, there is a growing recognition on the part of vendors that the prime central London property market is no longer on the upwards trajectory it was in the years following the financial crisis,’ said Tom Bill, head of London residential research. ‘As vendors become more attuned to current market conditions and adjust asking prices, the effect is to drive demand. Asking prices are typically declining by in excess of 10% to attract price sensitive buyers,’ he explained. Despite the bounce back Knight Frank forecasts a 2% decline in western markets but it predicts a 5% growth in markets east of Mayfair and south of the River Thames in 2016. But growth is increasingly polarised. In higher value western areas around Hyde Park, recent tax changes have had more of a dampening impact. Meanwhile, the opposite is true in traditionally lower value markets including Islington and the City and Fringe. A breakdown of the figures show that prices increased by 8.2% in Islington and by 8.1% in City and Fringe. Price also increased by 3% in Southbank, by 2.9% in Riverside, by 2.6% in Mayfair, by 1.8% in Kensington and by 1.2% in Marylebone. Prices were unchanged in St Johns Wood but fell by 6.8% in Knightsbridge, by 4.9% in South Kensington, by 3.5% in Hyde Park, by 2.5% in Chelsea, by 0.8% in Notting Hill and by 0.2% in Belgravia. Continue reading
