Investment
Official figures show fewer residential properties are lying empty in the UK
The number of empty homes in the UK is now at its lowest level since records began with a drop of over a third from 318,642 in 2004 to 203,596 in 2015. Figures also show an increase in the number of owner occupied homes in the past year, after seven years of decline, starting in 2007. The downward trend in ownership is continuing to level out after a fall from a peak of 69.5% in 2002 to 62.5% in 2015 and 62.8% in 2014. Data from the government also shows that the number of new homes up by a quarter in the last year alone, the highest annual percentage increase in net additional homes for 28 years. ‘We are turning around the housing market and making sure the best use is made of all housing including empty homes. We are very clear that a house should be a home which is why we have taken action to stop homes being bought up and left as an empty investment,’ said Housing and Planning Minister Brandon Lewis. ‘And we’ve taking forward the boldest ambition for housing in a generation, doubling the budget so we can help a million more people into home ownership, while delivering a bigger, and better private rental sector,’ he added. He pointed out that the government has introduced a number of measures to get homes back into use that have stood empty for years including rewarding councils for bringing empty homes back in to use through the New Homes Bonus and since April 2011, councils have been allocated over £4.846 billion for providing new homes. Other measures are providing over 704,000 additional homes, bringing over 106,000 empty homes will be back into use and providing 271,000 affordable homes and giving councils the power to increase Council Tax on empty properties. Alongside this charges have been introduce on certain ownership to prevent residential property being held through companies left empty and move to ensure that Capital Gains Tax is due on gains made by foreign owners who sell residential property in the UK, much of which is left empty. This means the same rules apply to residents and non-residents. Lewis added that the government is determined to provide more homes and has committed more than £20 billion over the next five years to help meet its ambition to provide a million new homes. He also pointed out that Right to Buy is being extended to 1.3 million people, shared ownership properties are being made available to a much larger number of people and 200,000 Starter Homes are being provided at a minimum 20% discount for first time buyers. Continue reading
Research shows US first time buyers battling against less choice and higher prices
First time buyers in the United States are facing a lack of affordable homes to buy and higher prices, according to new research. Home values are rising the fastest among entry-level homes in more than half of the largest housing markets, according to latest real estate market report from Zillow which covers the first quarter of 2016. It says that rising home values in this segment of the market can be attributed to a lack of supply, with 10% fewer homes for sale this year compared to last. The median value of entry level homes, that is those in the bottom third of the market, have increased the most over the past year in Denver, up 20%, followed by Portland and Dallas. The report also shows that there are 13% fewer entry level homes available in Denver than there were a year ago. The number of entry level homes available declined the most in Portland where there are 40% fewer entry level homes available than there were a year ago. The findings signal difficult times ahead for first time buyers looking to enter the market. Going into home shopping season this spring, buyers will find fewer homes in the bottom and middle of the market which are the properties most affordable for first time buyers. The trend also highlights the different experiences buyers are having in the recovering housing market. Buyers looking for the most expensive homes will find slower price growth, a larger selection, and less competition this spring than entry level buyers who are likely to face stiff competition, bidding wars, and very few homes to choose from. ‘It's going to be a tough home buying market this spring, especially for first time buyers or even people looking to move up into a slightly more expensive home,’ said Zillow chief economist Svenja Gudell. ‘In order to stand out in a competitive market, buyers should get pre-approved for a loan, find an agent who has experience with bidding wars, and consider coming in at the asking price, so the seller knows they're serious,’ she added. In all of the largest US housing markets, more than a third of the homes available for sale are in the most expensive segment in the top third of the overall housing stock in the market. In nine markets, top tier homes make up more than half of the inventory. The most expensive homes on the market are more likely to have a price cut, a signal that there's less demand for top tier homes. The share of top tier listings with a price cut has increased 1.6% over the past year. Continue reading
Property prices dip in England and Wales after mad March buy to let rush
Property prices in England and Wales fell by 0.5% in March, taking the average price of a house to £189,901, the latest land registry figures show. This takes annual house price growth to 6.7% but prices vary according to location with London and the East of England the only two regions with month on month growth. In London property prices increased by 0.2% month on month and by 13.9% year on year, taking the average price to £534,785. In the East of England price were also up 0.2% month on month, taking annual growth to 10.7% and average value to £220,989. Everywhere else in England and Wales prices fell month on month with the steepest fall of 2.6% in Yorkshire and Humber, followed by a fall of 2% in the West Midlands. Prices fell by 1.2% in the North East, by 0.9% in Wales and the South West, by 0.4% in the South East, by 0.3% in the East Midlands and by 0.1% in the North West. Year on year prices were up everywhere apart from the North East where annual growth was down by 0.7% to £97,581. Prices were up 10.3% in the South East, by 5.8% in the South West, by 5.7% in the East Midlands, by 5.3% in the North West, by 3.5% in Wales, by 3.1% in the West Midlands, and 1.6% in Yorkshire and Humber. Experts point out that the fall in prices should not be a surprise after a mad rush in March as buy to let landlords and second home buyers sought to beat the introduction of a 3% stamp duty surcharge on additional homes that came into force on 01 April. David Brown, chief executive officer of Marsh & Parsons, believes that there is still a lot of energy in the first time buyer market for other owner occupiers unaffected by the stamp duty chance. ‘This should step up to fill any momentary fall back in investor demand, and keep prices on course. In London, there are 14 buyers competing for every available property on the market, which will keep the wheels of growth moving,’ he added. According to Andy Knee, chief executive of LMS, the monthly dip will cause hopeful home buyers to breathe a sigh of relief that house prices have not stretched further out of reach. ‘But year on year, a 6.7% rise across England and Wales is cause for concern. In London particularly, where house prices rose 13.9% annually to exceed an average value of £534,000, homeownership is fast become possible for only the very wealthy,’ he said. ‘Despite government intervention to aid first time buyers, such as Help to Buy, Starter Homes and the Lifetime ISA, these schemes fall short of making property more affordable for millions,’ he pointed out and added that uncertainty over the referendum in June on the future of the UK in the European Union could have an effect. But he does not think… Continue reading
