Investment
New land reform bill in Scotland too vague and timetable too tight, says RICS
The New Land Reform Bill in Scotland is set to have a substantial impact on the country’s land and property markets but it is too vague, subjective and inconclusive, according to the Royal Institution of Chartered Surveyors. RICS is urging the Scottish Government to consider undertaking a full impact assessment before any of the provisions are implemented and to introduce more clarity regarding a number of its parts and provisions. While the organisation is ‘fully supportive’ of the Scottish government’s aims to modernise and rejuvenate the rural landscape, it also believes that the current timescale for reform is too tight and therefore will be dependent on regulations which will be deduced after the passing of the Bill. There is also concern about the cessation of sporting estate tax relief. The Bill’s Policy Memorandum states that many small scale shootings would be expected to eligible for rates relief under the existing Small Business Bonus Scheme. RICS believes that research into how many estates will, and how many will not, benefit from rates relief needs to be undertaken before this provision is taken forward. Furthermore, it points out that the Scottish government has, thus far, not indicated whether the Small Business Bonus Scheme (SBBS) will endure beyond until 2016/2017, the proposed date where business rates exemptions will cease. ‘We believe it would be prudent of the government to inform the sector of its plans for the future of SBBS one way or another,’ said Sarah Speirs, director Scotland of RICS. ‘Whilst RICS welcomes a Land Rights and Responsibilities Statement (LRRS), as it will provide an indication of legislative travel, we do not agree that it should be a statutory requirement to be updated every five years, as currently specified,’ she added. Speirs explained that regular and changeable legislative modifications do not create favourable conditions for property and land markets and these markets require consistency to reach the necessary degree of stability to create confidence. ‘As such, RICS believes a balance needs to be struck between the land reform process and the establishment of stable, consistent legislative and economic conditions. Removing the statutory requirement for a review of the statement is one way of creating these conditions. Sarah on the proposal to create a Scottish Land Commission,’ she said. ‘we welcome the provision to establish a Scottish Land Commission, but still believe there would be merit in having separate Land Commission and Tenant Farming Commission office to ensure transparency,’ she pointed out. ‘Whilst the Commission’s work may result in increased costs to the public purse, the potential outcomes of the Commission’s research, evidence gathering and positive impact on land, should it follow the remit outlined above, should outweigh the costs. It is imperative that all work undertaken by the Commission is open, transparent and accessible to the Scottish public,’ she added. Agricultural holdings account for a substantial quantity, almost half, of the Land Reform Bill. RICS is concerned that agricultural holdings is too substantive an issue to be… Continue reading
A competitive price and quality amenities demanded in London super prime market
People buying the most expensive properties in the London are increasingly seeking the highest quality and amenities such as concierge services, secure parking and leisure facilities, new research has found, and price still matters. Also, after exceptionally strong price growth in the so-called golden postcodes such as Kensington and Chelsea, buyers are looking further afield for value in the super prime London real estate market. Indeed, according to the latest research from international real estate firm Knight Frank, the market is still sensitive to the Stamp Duty changes introduced at the end of last year and price and amenities matter. Richard Cutt, of Knight Frank’s prime residential team, pointed out that while the idea of a mansion tax has fallen from the political agenda, December’s increase in stamp duty for properties worth more than £1.1 million means the transaction tax on a £10 million property has risen to £1.1 million from £700,000, a difference equivalent to 4% of the sale price. Despite this increase, the election of a majority Conservative government caused some sellers to anticipate a short term spike in prices, which failed to materialise. ‘Nobody assimilated the stamp duty changes while the election was on the agenda. Meanwhile, those who expected the market to strengthen after the election are realising that it is still finely balanced, sensible pricing being the key,’ said Cutt. He explained that while reality has begun to set in with some vendors, it will be telling to see what impact the changes have on overall stamp duty revenues when the figures are released later this year. Despite this Knight Frank super prime sales rose by a quarter in the year to the end of June 2015 even although a series of factors, including political uncertainty and the new stamp duty rates meant volumes across the whole super prime market shrank by a fifth. Furthermore, price growth at the £10 million plus level has underperformed the prime central London average, growing 4% in the two years to June versus 10.3% in prime central London. Further changes in July’s Budget ended the permanent status for non-dom residents and widened the inheritance tax net to property held offshore. It comes on top of a succession of tax changes in recent years that make it increasingly difficult to argue that high value residential property is under taxed. ‘It’s too early to detect a discernible impact on sentiment at this stage, though there may be a marginal effect further down the line,’ said Tim Wright, also from the prime property team, in relation to the non-dom change. The research shows that the area covered by £10 million plus sales in London in the year to 30 June 2015 is wider than three years ago and now encompasses areas like the Southbank. ‘A number of best in class developments are coming through and, crucially, achieving critical mass in areas perhaps not considered super prime in the past,’ said Cutt. As well as casting the net further, the… Continue reading
Seasonal summer dip fails to impact UK property market as demand remains high
House prices in the UK fell 0.8% this month, but this is much less than the usual summer seasonal fall off, according to the latest index from property portal Rightmove. Overall the marginal fall compared to a post credit crunch average August fall of 1.5% and a shortage of new sellers, down 8% on same period in 2014, and active buyers help to minimise usual summer holiday price falls. This takes the average asking price of a home in the UK to £292,284 which is 6.4% above a year ago, the data shows. But there is considerable variation within the market. First time buyers face a 1.8% rise with the average price in this market £177,977 while at the top end the average price is £524,822, a fall of 2.2%. Rightmove says that the strongest August price performance since 2007 demonstrates the continuing supply/demand imbalance in the property market. It reveals that the top three reasons for people not moving are not able to find somewhere to buy, the cost of moving and affordability. ‘While new seller asking prices have been muted by the traditional summer holiday property slowdown, the underlying shortage of property coming to market compared to buyer demand has helped to deliver the strongest August price performance since before the credit crunch,’ said Miles Shipside, Rightmove director and housing market analyst. ‘Buyers can normally pick up some bargains in August as sellers who are marketing their homes when they should be holidaying often have a pressing need to sell and mark their prices down pretty aggressively. At 0.8% down on the previous month, this is the least generous that sellers have had to be for eight years and a clear sign of upwards price pressure in the pipeline,’ he explained. Another factor highlighted by Rightmove is the lack of new build supply with current new home volumes still being well below the levels reached just before the credit crunch. ‘The historic new build shortfall results in there being a smaller overall housing stock available to come to market, while the current new build shortfall also limits the number of existing property owners who are looking to sell their house in order to buy the limited number of suitable brand new homes available,’ Shipside pointed out. ‘The shortage of suitable property being built exacerbates the vicious circle of not enough property on the market to meet demand, increasing prices, and a reluctance among home-owners to come to market if they think the prospects of finding and funding their next move are severely compromised,’ he said. ‘These stay away sellers who are seriously considering a move but have yet to put things into motion have concerns around a shortage of choice and stretched affordability. They could be helping to get the country’s limited property stock circulating, but they have concerns about coming to market, deepening the supply shortages affecting many areas,’ he added. He also explained that home owners are reluctant to put… Continue reading
