Investment
Survey reveals positive attitude to renting in the UK
The majority of tenants in the UK private rented sector are satisfied with their current landlord with only 5% refused a longer term tenancy, new research shows. Overall 65% of tenants believe their rental payment represents ‘good’ or ‘very good’ value for money and have positive attitudes towards renting, according to the study commissioned by Paragon Mortgages. The quarter two tenant market analysis, carried out by BDRC Continental, reported a rise in tenant satisfaction with 80% satisfied with their current landlord and 87% of tenants now regarding their rented property as their home rather than a short term arrangement. The research also highlighted that the average duration of tenants living in their current rented property in the second quarter of 2015 was seven years, with the typical total stay in the private rented sector being 12 years. When asked about their long term housing plans some 35% of participating tenants intend to remain within the sector and 24% intended to buy a house in the future, with the proportion of respondents citing the unaffordability of housing as the reason for renting privately increasing from 69% to 74%. ‘This research provides a valuable insight into the sector. There are many surveys of landlords and many academic reports on the PRS. There are, however, too few surveys that poll tenants directly on their experience of renting privately,’ said John Heron, managing director of Paragon Mortgages. ‘This survey has identified high levels of tenant satisfaction and an appreciation of the good value that rented accommodation can offer across the country. It is more disappointing though to see that affordability constraints are impacting negatively on future choices in housing with less than a quarter of tenants expecting to buy their own home in due course,’ he added. Continue reading
UK residential property stamp duty revenue hits record high
The UK tax man, HMRC, collected a record £7.5 billion in stamp duty from residential property transactions in 2014/2015, official figures show. This was up from £6.45 million the previous year and from £4.9 billion in 2012/2013 and the total tax collected from home buyers in the UK has grown by 165% over the last six years alone. Transactions in London contributed the most residential stamp duty revenue at just over £3 billion, followed by the South East at £1.6 billion. Together these two regions accounted for 66% of the total tax take. Between 2008/2009 and 2014/2015, stamp duty revenues in London have grown by 248%, compared to around 158% in the East of England and 140% in the South East. Other English regions had between 75% and 120% growth in the same period. The increase in London reflects the growth in house prices in the city over this time compared to the rest of the country, as well as the fact that the higher rates of stamp duty on property transactions worth more than £1 million mostly affect London, according to an analysis of the figures by real estate firm Knight Frank. Grainne Gilmore, head of UK residential research at Knight Frank, pointed out that last December’s cuts in stamp duty for homes worth up to £1.1 million has had little impact on the tax receipts from home buyers in the year to April. ‘Overall, home buyers still paid more in stamp duty than over the previous 12 months. While the increased take from stamp duty reflects the growth in house prices and a pick-up in transactions, another factor has been the increases to stamp duty charges, especially towards the top end of the market,’ she said. She also pointed out that residential stamp duty garnered £7.5 billion for the Treasury in the year to April, more than double the amount raised back in 2002/2003 and the Treasury’s windfalls from home buyers in England has grown by 165% over the last six years alone. ‘The relative burden of stamp duty is also highlighted by the data. Londoners paid 43 times more stamp duty than buyers in the North East over the last year, a reflection of the widening of the North/South divide in terms of activity and prices, but also the higher stamp duty charges for more expensive homes. Buyers in London and the South East accounted for 66% of all stamp duty receipts on residential property in the year to April,’ Gilmore explained. ‘It remains to be seen what the impact of the new stamp duty regime will be for the Treasury in the coming year. Despite hitting a record high for residential receipts in the year to 2015, the total stamp duty tax take at £10.7 billion is £800 million lower than the Treasury forecast when it made the changes to stamp duty back in December,’ she added. According to Tom Bill, head of London residential research at Knight… Continue reading
House prices growth flattens in Sydney, latest index shows
House price growth in Sydney has flattened and values in three other Australian capital cities fell in September, according to the latest residential index. Overall there was a 0.9% rise in capital city property prices over the month and a 4% rise in the September quarter, the CoreLogic RP Data home value index shows. However, across the capital cities, the month on month results ranged from a 2.4% rise in Melbourne to a 1.9% fall in Hobart while Sydney, posted a month on month gain of just 0.1% in September. During the September quarter, half of Australia’s capital cities posted a decline in dwelling values with Hobart down 2% over the three months. In Adelaide values slipped by 1.6%, in Perth they fell by 0.7% and Canberra values were down 0.4%. The most substantial capital gains over the quarter were achieved in Melbourne where dwelling values were up by 7.4% followed by Sydney at 4.6 %, Brisbane at 1.9% and Darwin up by 0.4%. Head of research Tim Lawless pointed out that the flat growth rate in Sydney comes after dwelling values increased by 16.7% over the past 12 months and they are 49.6% higher over the growth cycle to date. ‘The slower month on month reading across the Sydney market comes at a time when auction clearance rates have slipped to the low 70% range from week to week and the number of advertised properties has risen,’ said Lawless. ‘Vendors are still enjoying strong selling conditions, but it looks like buyers are slowly regaining some leverage in what has been a very hot market. Meanwhile, while half of Australia’s capital cities have seen values rise over the past quarter and year, the other half did not fare as well,’ he added. In Darwin, dwelling values fell by 3.9% over the 12 months to the end of September, while in Perth values were 0.9% lower over the year. Adelaide home values dropped by 0.3% and Hobart values are 0.2% lower. Weakening labour markets, slower population growth and less demand for housing is placing downwards pressure on prices to differing degrees across these markets, according to Lawless. Looking at which sector of the housing market is driving the highest capital gains, across the combined capital cities it has been the most expensive quartile of the market where growth has been the most substantial. Across the combined capitals, the top quartile of dwellings based on value has recorded growth of 12.3% over the past 12 months, while the most affordable end of the market has recorded a lower growth rate of 8.5%. ‘This trend holds true across Sydney and Melbourne, however in Brisbane, Adelaide and Perth it is actually the most affordable end of the housing market that has recorded the best results,’ Lawless said. CoreLogic's analysis of houses versus apartments reveals some substantial differences in market performances across the capital cities. At a capital city level over the quarter, the results don’t show a great deal of difference with… Continue reading
