Tag Archives: australia
Weaker demand from overseas buyers hits London prime property market
Prime property prices in London fell by 4.3% in the last quarter of 2014 due to weaker demand from international buyers, a new analysis suggests. This weaker demand is driven by actual and potential tax changes as well as shifts in the relative value of the exchange rate, according to the report from residential data firm Hometrack. It points out that overseas buyers of prime central London property saw capital values rise by 80% over the last five years. The drop in the value of sterling between 2007and 2009, combined with a 17% fall in property prices made London look very good value to overseas buyers with extremely strong demand in 2009 and 2010. Changes in currencies have delivered even stronger gains, it explains. Russian buyers have seen the biggest gains on the weakness in the rouble in the last six months. However, rouble backed buyers who do not already own London property will now find it much more expensive to buy which looks set to impact demand and pricing levels with a drop in prime London prices in the last quarter of 2014. On top of this overseas buyers in this sector now face paying more in property tax due to changes announced at the end of last year to UK stamp duty levels. Talk of a mansion tax being introduced after May’s general election is also affecting the market. But the report also points out that prices in this sector have climbed much faster than other markets with the London region as a whole seeing prices rise by 59% in the last five years compared with prime London’s 80% and the UK as a whole just 34%. ‘While prime London property prices have grown by 80% in the last six years, changes in currencies can boost the gains for overseas buyers,’ said Richard Donnell, director of research at Hometrack. ‘This is good news for those overseas buyers who already own property but it can make London look less affordable for those who do not own housing. Fluctuations in currencies together with tax changes and the threat of a mansion tax are cooling demand for prime London housing and values have started to slip back as result,’ he added. Continue reading
Research shows some UK tenants resort to paying for repairs
Some two thirds of tenants in the UK have had to dip into their own pockets to fund repairs because they could not wait for the landlord any longer, it is claimed. A new study shows that 55% of tenants spent up to £50 to sort out a repair and that half of tenants would like landlords to deal with repairs quicker. Two thirds of tenants say that it takes their landlord too long to respond to emails and calls about problems. The research from online agents Property Let By Us also reveals that just a third of tenants would rather deal with a landlord than a letting agent and one in six tenants have experienced bad landlords in the past. However, over 80% say their landlord is approachable and friendly and only 12% of tenants claim their landlord has made promises that he/she could not keep. The recent case of Edwards v Kumarasamy, highlights the legal responsibility that landlords have under the statutory requirements of Landlords Repairing Obligations, part of the Landlord & Tenant Act. Edwards was a tenant renting a flat from Kumarasamy. This case features his claim for compensation, when he tripped on an uneven paving slab on the outside path to the parking and communal bins area. A new Court of Appeal held that as the landlord had a right to use the path under his lease from the freeholder, he had a sufficient ‘estate or interest’ in the area to satisfy section 11 and so was liable for the repair. It means that landlords and agents doing inspections need to monitor the exterior areas of properties to ensure that they are safe and that any necessary repairs are done promptly. ‘There are many professional landlords in the buy to let market that are responsive to tenant communications about problems and issues. However, there are a few bad landlords that neglect their tenants and put lives at risk,’ said Jane Morris, managing director of Property Let By Us. ‘Every landlord has a duty of care and should respond to tenants emails and calls with 24 hours if possible. While it may not be possible to deal with repairs immediately, it is important that landlords maintain open communications with their tenants, so they can provide updates on timing etc. Communication is key and the landlord should keep the tenant informed of the action,’ she explained. The research shows that the most common cause of complaints are faulty boilers followed by leaking roofs, faulty showers, mould and condensation, leaking bathroom and window locks, broken windows, smoke alarms and pests and vermin. ‘Some of these can be very dangerous for the tenants, so it imperative that landlords carry out repairs to their properties within a reasonable time,’ added Morris. Property Let By Us has put together some guidelines on landlord response times for tenant complaints…. Continue reading
Two thirds of buyers in England and Wales to benefit from stamp duty tax change
More than two thirds of buyers in England and Wales will benefit from the stamp duty changes announced last year and it is set to stimulate housing market activity. According to a new analysis of land registry prices by the Nationwide Building Society some 86% of housing transactions in London and the South East should benefit and 85% of transactions in Cardiff North will see a reduction in stamp duty payable. This comes as the slab structure of the tax was completely abolished, with purchasers paying the marginal tax rate on the relevant elements of the purchase price. Overall some 98% of buyers will pay the same or less tax and only those purchasing homes costing between £937,500 and £1 million or more than £1,125,000 are set to pay more. The Nationwide report says that the new marginal SDLT should help to remove the distortions caused by the slab structure, which led to a clustering of transactions. The greatest impact is likely to be for homeowners looking to buy property just above £250,000, who could save around £5,000 in tax or around 2% of the purchase price. Based on 2013/2014 transactions data from the Land Registry, nearly 590,000 purchasers in England and Wales would benefit under the new regime, with an average benefit of around £1,600. The benefits tend to be greater in areas where average house prices are higher and thus a higher proportion of transactions are liable for stamp duty. The report estimates that 86% of transactions in London and the South East regions would benefit from the changes, compared with around 50% across the North East, North West, and Yorkshire and the Humber. A further breakdown of the figures show that only a small number of sales would see people paying more while a large number would see no change. In England and Wales as a whole 71% would benefit, 28% see no difference and 2% would pay more. So, in London 86% would benefit, 7% would see no change and 7% would pay more. In the South East 86% would benefit, 13% would see no change and just 2% would pay more while in the East of England 81% would benefit, 18% see no change and 1% pay more. Elsewhere no one would pay more. In the South West 81% would benefit and 18% would see no difference. In the West Midlands it is 61% and 39%, in the East Midlands 58% and 42%, in Yorkshire and the Humber 53% and 43%, in the North West 51% and 49% and in the North East 45% and 54%. While in Wales it is 53% and 47%. Continue reading
