Uk
Scottish govt announces extra tax on second homes, following rest of UK
Private rented sector landlords in Scotland and second home owners face an extra 3% stamp duty tax from next year which will bring them into line with changes in England and Wales. It was only a matter of time before the change came about after the UK Chancellor George Osborne announced the additional tax for England and Wales in his recent Autumn Statement. Scottish Finance Minister John Swinney said that he would bring forward legislation on the new second home charge soon so that it could be in force by April 2016. ‘I am conscious of the issue of second homes. We need to ensure that the opportunities for first time buyers to enter the market in Scotland are as strong as they possibly can be and we need to make certain that tax changes elsewhere in the UK do not make it harder for people to get on the property ladder,’ he explained. It means that an extra 3% rate will apply to the purchase of additional properties, such as buy to let and second homes from 01 April 2016 and be levied on the total price of the property for all sales above £40,000 on top of the current LBTT rates. The Scottish Government has forecast that it will raise overall LBTT receipts in 2016/2017 by between £17 million and £29 million, rising to a possible £66 million by 2020/2021. Overall the Government expects LBTT will raise £295 million in 2016/2017. John Blackwood, chief executive of the Scottish Association of Landlords, said that landlords will be disappointed and frustrated by the decision which will effectively ‘punish’ those who choose to invest in the private rented sector (PRS) Scotland. ‘The supplementary tax on the purchase of second homes will have a huge impact on the buy to let market and exacerbate an already serious shortage of properties in many areas. We firmly believe that the biggest losers from today's statement will be tenants who will now find it even harder to get the accommodation they want at a price they can afford,’ he added. Oliver Knight, a senior analyst in Knight Frank’s residential research department, said that sales will be brought forward as landlords and others seek to minimise their property tax burden. He added that buy to let property investors will also be able to continue offsetting all stamp duty against capital gains tax when they sell their property. Bob Cherry, partner at property consultants CKD Galbraith, also believes that there will be a flurry of activity before the end of March 2016. ‘This new levy will have implications for current landlords looking to sell as well as act as yet another deterrent to would be landlords thinking about the market as an investment opportunity,’ he said. ‘This measure, like the LBTT rises introduced earlier this year, is also a wealth tax on owners as buyers of buy to lets will seek to pass on the extra purchase costs by reducing… Continue reading
Auckland sees residential construction work double in four years
The value of construction in most regions in New Zealand increased in the third quarter of 2015 with Auckland seeing a new high of $943 million worth of residential work, up $107 million from a year ago. Overall building work worth $4.2 billion was put in place in the September 2015 quarter, up 4% on the September 2014 quarter, according to official figures from Statistics New Zealand. ‘The value of building work increased in most regions. Similar to last quarter, residential work grew most in Auckland, while non-residential work grew most in Canterbury,’ said Statistics New Zealand business indicators manager Neil Kelly. In Auckland, a new series high of $943 million worth of residential building work was recorded in the September 2015 quarter, up $107 million from a year ago. The current quarter's value is double what it was four years ago in the September 2011 quarter. After removing price changes and seasonal variations, the national volume of all building activity increased 0.5%, following a 1.6% increase in the June 2015 quarter. Within this, the volume of residential work increased 2.9% while non-residential work fell 2.6%. The volume trend for non-residential building activity grew 0.4% in the September 2015 quarter, a similar level as the previous series high in the March 2006 quarter. Meanwhile, the residential building activity volume trend grew 1.4% in the latest quarter, but the level was still 6.3% lower than the June 2004 quarter peak. The overall building activity volume trend grew to a level last seen 10 years ago in the June 2005 quarter, the previous series peak. Meanwhile, official data also shows that all 16 regions of New Zealand are projected to have more households in 2038 than in 2013 and most territory authority areas (TAs) will also have more households. The Auckland region is projected to account for about half of the national growth in the number of households between 2013 and 2038, increasing from 500,000 to 750,000. Over the same period, the region is projected to account for roughly 60% of New Zealand's population growth. By 2038, some 35% of all households in New Zealand will be in the Auckland region, up from 30% in 2013. Continue reading
UK house prices set to keep rising in 2016 due to shortage of supply
House prices in the UK are set to continue rising during 2016 due to a lack of available housing stock in the property market, according to the latest index report. There are 47% fewer properties currently for sale than in December 2007 and 16.1% fewer than in December 2014, the data from Home.co.uk’s asking price index shows. The firm says that this is creating ‘a vicious circle’ of price hikes that are set to continue throughout 2016, and follows a rise of 8% in England and Wales' property prices in 2015. Already, regions with the biggest shortages of available housing for sale are experiencing the quickest price rises, with the East of England in particular set for continued rapid price hikes next year. Overall the firm is predicting price growth of 9% in England and Wales with the highest of 13% in the East of England, followed by 12% in the South East, 9% in Greater London and 7% in both Scotland and the West Midlands. The rest of the country is likely to see more moderate growth with just 1% in the North East, 2% in Wales, the North West and Yorkshire and Humber and 6% in the East Midlands and the South West. A breakdown of the data shows that between November 2010 and November 2015, the supply of property in the East slumped by 27%, while prices in the region increased by 10.6% over 2015. Scotland's housing supply fell by 13% between November 2010 and November 2015. Other areas where the supply of properties for sale dried up over the same period include the East Midlands, which saw a fall of 12%, and the West Midlands, where supply dropped by 11%. The South East is another region to experience a drought in the volume of property for sale, with supply falling 10% over the same period while only two areas saw an increase in housing stock for sale between November 2010 and November 2015 with a rise of supply of 10% in Yorkshire and the Humber and 2% in Wales. For 2016, Home.co.uk is predicting a similar range of regional price rises as seen in 2015. However, due to further contractions in supply, the East of England and the South East are expected to outperform Greater London over the next 12 months. Buyers in Scotland, the West and East Midlands and the South West are advised to brace themselves for a year of rapid price growth as the supply crisis ripples out to these regions. Meanwhile, typical time on the market has also fallen due to this imbalance between high demand and low supply. In England and Wales, the typical time on the market in December this year is 104 days, compared to 110 days a year ago. ‘Next year is set to see the vicious circle of spiralling prices and falling supply deepen even further as buyers take advantage of cheap credit to chase ever fewer properties,’ said the firm’s… Continue reading
