Uk
First time buyers numbers remained up in 2015, new data shows
The number of first time buyers in the UK remained buoyant in 2015 at just over 300,000 for a second year in a row, according to new data. First time buyers accounted for almost half of all house purchases made with a mortgage in 2015 and more than a quarter are now opting for a 35 year mortgage, according to the annual first time buyer review report from the Halifax. Overall it show that number reached 310,000 and the lender says that although this represents a marginal decline of 0.5% from 311,700 in 2014, the number has grown by 60% since 2011, from 193,700 to 310,000. T It also says that the marginal decline in first time buyers is in line with general residential house purchases, and is partly due to lack of supply. The data also shows that the average price paid by first time buyers increased by 10% in 2015 from £172,563 to £190,180, taking the price above the previous peak in 2007 of £174,994 for the first time. The average deposit paid by a first time buyer at £32,927 was 13% higher than a year ago and 88% higher than the average deposit in 2007 which was £17,499. The report says that is was the higher house prices paid by first time buyers during the year has resulted in an increase in the average deposit paid. In the South East the average deposit paid rose by 24% in the past year, from £35,582 to £44,024 while the highest is in Greater London at £91,409, some five and a half times more than the lowest which was £16,578 in Northern Ireland. Whilst a mortgage term of 25 years has been the norm for some time, many first time buyers are increasingly taking out mortgages where payments are spread over a longer period. In 2007 the proportion of first time buyers taking up a 35 year mortgage was 16% bit in 2015 that grew to 26%. Over the same period, the share of mortgages with a 20 to 25 year term dropped from 48% to 30%. ‘For the second year in succession, the number of buyers getting on the first rung of the housing ladder has reached 310,000. Although the average price of the typical first time buyer home has grown by 10% in the past year, the number of buyers taking that first step onto the housing ladder has been supported by favourable economic conditions; namely, record low mortgage rates, rising employment and real pay growth,’ said Craig McKinlay, mortgages director at the Halifax. The research suggests that first time buyers are an increasingly important part of the housing market and accounted for 46% of all house purchases made with a mortgage in 2015, the same as in 2014. However, this share has grown from 36% at the start of the housing downturn in 2007. Based on the average price paid by first time buyers, most regions have benefited from the Stamp Duty… Continue reading
Details of extra tax on UK buy to let and second homes unlikely before mid-March
The final details of how the extra stamp duty on buy to let and second home purchases will work will not be known until a couple of weeks before the new tax rate comes into effect in April this year. The government’s consultation period on the proposal for a 3% tax on these kind of property transactions runs until 01 February and officials will then consider the responses and are expected to confirm the final details on the annual Budget announcement on 16 March. The proposal is that the extra rate will apply to most purchases of additional residential properties where, at the end of the day of the sale, individual buyers own two or more residential properties and are not replacing their main residence. The higher rates will also generally apply to purchases of residential property by companies. It would seem that the 3% rate will not apply if at the end of the day of the sale an individual owns only one residential property, irrespective of the intended use of that property. However if following the transaction the individual owns two or more residential properties, the applicability of the additional rate will depend on whether the purchaser is replacing their main residence. Liam Bailey, global head of residential research at real estate firm Knight Frank, has pointed out that while the consultation assumes that most people will buy a new main residence on the same day as they sell their previous one, there will be an allowance for purchasers to have up to 18 months to replace a main residence following an earlier sale. Also where an individual sells their previous main residence after purchasing a new main residence, a refund of the higher rate could be claimed with the window for this refund limited to 18 months after the purchase of the new residence, he explained. He also said that it would appear that the location of additional properties will be global, so the ownership of a property in France for example, will be relevant. Also, the new rate will apply if the purchase is completed on or after 01 April 2016. However, if contracts were exchanged on or before 25 November 2015 but not completed until on or after 1 April 2016, the higher rate will not apply. The details will be important as there are a number of scenarios that could play out, for example parents buying a property for their children, joint purchases between friends and partnerships. Stephen Barratt, private client tax director at accountants and business advisers James Cowper Kreston, believes that the proposed legislation will create uncertainty, introduce many anomalies and take a long time to fully bed down. 'The fact that the new rules are intended to apply to completions on or after 01 April 2016 will mean that many purchasers will be exchanging contracts now without knowing what the final rules will be. This will create uncertainty,' he warned. 'The additional 3% rate is intended… Continue reading
Dubai to get more affordable homes
Dubai is usually associated with luxury property that fits with the glitz associated with the celebrities and wealthy property owners in the emirate but several new announcements now suggest otherwise. One developer is to build a series of affordable homes in Dubai while over 200 dilapidated villas that were lying empty are to be demolished. The moves show a different side to the emirate’s real estate market and is a reminder that not all properties are luxury apartments for the well off. Danube Properties has unveiled an affordable housing project that will allow home owners to turn one room into two. The Ritz Project at Al Furjan includes 452 fully furnished apartments, comprising of studios, and one a d two bedroom units. The rooms features a bed which can be tucked into the wall during the day, thus creating a larger living room space. At night it can be lowered to transform the accommodation into a bedroom. The Ritz also includes retail space and a gym, together with an outdoor running track and swimming pool, tennis and badminton courts and a basketball area. ‘We are bringing the latest home technology to our customers at a time when consumers are looking for more with less,’ said Rizwan Sajan, founder and chairman of Danube Group, who added that the homes are aimed at new couples and small families. The launch comes at a time when the luxury part of the property market is experiencing a softening, but Sajan pointed out that some 18,000 new homes are needed in the emirate over the next five years. ‘Real estate is a long term business and I am a firm believer in the long term sustainability of Dubai’s economy, which is very resilient. The current supply of 12,000 to 13,000 homes per annum falls well below the anticipated demand. Besides more than 80% of Dubai’s population live in rented homes,’ he explained. ‘With property prices coming down to a more realistic level we see the possibility of a large scale migration to home ownership from rental homes,’ Sajan added. Meanwhile, around 250 dilapidated villas across Dubai which are regarded as posing a public health risk are to be demolished. According to Dubai Municipality many of the properties are caught up in inheritance disputes between family members and the rightful owner has neglected them, making them a threat to security and public health. ‘There is a possibility that these houses are used as a den for crimes and as a hiding place for illegals and fugitives,’ said Khaled Mohammed Saleh, head of the buildings department at Dubai Municipality. It is estimated that there are 713 abandoned houses across Dubai of which 303 have already been demolished and a further 154 have been renovated by their owners. The Municipality will now issue orders to the owners for the houses to be demolished and if they fail to comply the properties will be taken down and the owners charged. Continue reading
