Uk
Residential rental market in Australia weakest since 1996
Rental growth rates in Australia continue to show their weakest performance since 1996 with a rise of just 0.3% in capital cities in February and no change year on year. The latest CoreLogic RP Data Rent Review report suggests that over the coming months rental rates could begin to fall on an annual basis due to additional new rental supply entering the market. A breakdown of the figures show that rental rates have increased over the year in Sydney by 1.5%, in Melbourne by 2.2%, in Canberra by 1.6% and were unchanged in Hobart. Rents fell 07% in Brisbane, by 0.4% in Adelaide, by 8.4% in Perth and by 13.3% in Darwin. This takes the current weekly rental rates to £488 for houses and $467 for apartments, the data also shows. Overall rental rates have been sitting at around $485 per week for the past year. In the last year rental rates had increased by 1.7% highlighting that the slowdown in rental conditions has been quite sharp over the year and Brisbane, Adelaide, Perth and Darwin are currently experiencing some of their largest annual falls on record. Indeed, all capital cities are experiencing annual rental changes which are well below their decade average levels. ‘With construction activity set to peak over the next 24 months, and with many new properties still to settle, there is a real possibility that rental rates will fall over the coming months,’ said research analyst Cameron Kusher. ‘Based on our expectations, landlords have little scope to lift rental rates while for renters, it potentially means more surety in securing accommodation and the potential to upgrade into a higher level of accommodation for a similar cost,’ he explained. ‘The cause of this current slowdown in rental growth is falling wages, excess rental supply in certain areas and lower rates of population growth and population mobility impacting on demand for rental accommodation,’ he added. Continue reading
Second cross rail link for London will have huge impact on housing
A new north-south cross London railway set to link Broxbourne and Wimbledon will provide a huge boost to certain residential neighbourhoods and the creation of 200,000 new homes. The announcement in the UK Budget that Crossrail 2 will go ahead will boost prices and demand in key suburbs such as Wimbledon, Clapham and Tooting but also in key commuter town such as Cambridge, Basingstoke, Woking and Guildford as travelling times into central London will be reduced. It is excellent news according to Robin Paterson, chairman of UK Sotheby’s International Realty. ‘We will see pockets of accelerated growth emerge, much like we have seen around Crossrail stations such as Ealing and Slough. The new route will provide a huge boost to neighbourhoods such as Clapham and Tooting in the south, cutting journey times to The City of London in half and I would expect a future jump in prices to reflect this,’ he said. Crossrail 2 can help deliver 200,000 homes by acting as a catalyst for development and regeneration, but only if communities accept higher densities, according to real estate firm Savills. ‘Intensifying land use might not be an issue in post-industrial areas that are being regenerated but could face local opposition in semi-rural locations adjacent to the Green Belt. Savills research shows there is tremendous potential to increase density in London. We calculate that theoretically there is the potential to deliver 1.46 million new homes in London by building at higher densities. Furthermore, our analysis highlights that the greatest opportunities are in the outer boroughs,’ said Susan Emmett, Savills residential research director. ‘The big question will be whether the affected communities are ready to embrace this brave new world. They must be reassured that delivering higher densities does not require turning Shepperton into Singapore. Done well, higher density can bring benefits by enabling better shops and services that support vibrant communities,’ she explained. ‘A design led approach where the focus is on creating attractive places along traditional street patterns must surely be the way to go. We would need to change planning policy and attitudes to density to fulfil this target. Design led approach is therefore crucial,’ she added. Steve Sanham, development director at HUB, pointed out that Crossrail 1 has demonstrated that major infrastructure projects can have a serious regenerative effect and unlock new opportunities for housing by boosting connectivity within cities. ‘Investment into key infrastructure like Crossrail 2 is infinitely more useful in helping to deliver real affordability into the market than many of the short term housing initiatives we have seen recently,’ he said. ‘Starter Homes will only help a lucky few, and these discounts don’t solve the structural issues that make it difficult for first time buyers to get on the ladder. Opening up new areas of London as viable locations for housing will increase choice for Londoners looking for sensibly priced homes,’ he added.4 ‘A threshold on how many homes the stamp duty surcharge applies to is also… Continue reading
No good news for buy to let landlords in UK Budget
There was little good news for residential landlords in the UK’s Budget announcement with the Chancellor of the Exchequer adding to their woes by excluding them from a tax giveaway. Just weeks before landlords in the growing buy to let sector face an extra 3% stamp duty charge under a change to tax on additional homes, George Osborne announced they will be excluded from Capital Gains Tax change. ‘Buy to let investors could be forgiven for being completely paranoid. On this evidence, the Chancellor really has got it in for them and has excluded buy to letters from a huge CGT giveaway,’ said Jamie Morrison, private clients partner at the chartered accountants HW Fisher & Company. ‘With more incentives to help savers and first time buyers get on the property ladder, buy to let owners have once again been cast in the role of fall guy,’ he added. David Cox, managing director of the Association of Residential Letting Agents (ARLA), pointed out that this is now the third Budget which directly attacks landlords. ‘The sector has been punitively taxed, with stamp duty on buy to let properties, mortgage interest relief and now capital gains tax changes. It’s an outright assault on the sector,’ he said. ‘Every other sector has been offered a tax break yet there is nothing here to help the private rented sector, including landlords and most importantly tenants, who will see rent costs rise to subsidise the taxes that landlords pay on property. The government talks about wanting to help the younger generation get onto the property ladder, but with the changes announced today the supply of available property is bound to decrease, and as a result rents will rise,’ he explained. ‘In November, when Osborne announced an increase in stamp duty tax on buy to let properties, we described this as a catastrophic move. The news that larger investors will also have to pay the tax is even worse. Professional landlords, those who typically own more than 15 properties, play a vital role in providing rental stock to the market, and providing the army of renters we have in this country with housing,’ Cox added. ‘Our members forecast that the supply of buy to let properties will dwindle when the new tax comes in to effect, and this news means that supply will fall even faster and harder. We’re already in a position where demand out-strips supply and as supply falls, rent costs rise, meaning the goal of home ownership falls even further out of reach for most of the country’s renters,’ he concluded. Richard Lambert, chief executive officer of the National landlords Association (NLA), said it is clear that the Chancellor does not regard ordinary people putting their own money into providing homes as worthwhile. ‘The steady upward ratchet of taxation on landlords over the past year shows that George Osborne is determined to bear down on the private rented sector, but he still depends on… Continue reading
