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RICS develops policy ideas report for next UK government
With property a key issue for voters ahead of this week’s UK general election, the Royal Institution for Chartered Surveyors (RICS) has developed a series of policy blueprints for new ministers. These Property in Politics recommendations provide workable solutions for the next government to implement as priorities and include establishing an independent Housing Observatory and for the next government to issue Property Tax Forward Guidance within its first 100 days A Housing Observatory would draw on expertise from across government, the private sector and academia, taking politics out of the housing debate and ultimately delivering the housing supply the UK needs. RICS says that the observatory would be strictly independent at arm’s length from government and fulfil several functions including as a data hub on housing, accessible to policymakers, academics and the general public. It would review and interpret this data and produce briefing papers on what works, both nationally and internationally and analyse policy statements, identifying long term consequences and macro trends modelled on the tax and spending policy analysis carried out by the Institute for Fiscal Studies. It would also create or facilitate new streams of research. Property Tax Forward Guidance would promote certainty and clarity for the property sector, according to RICS and it added that the new government should publish Forward Guidance of its plans for property taxes within its first 100 days. It would seek a commitment to a comprehensive review of Council Tax, including moves towards a wholesale revaluation of properties and the introduction of higher rate bands and reduce the VAT on improvements to rental properties to 5% to stimulate investment in the private rented sector. It says that the parties should undertake a detailed assessment of the probable impact of a mansion tax proposed by Labour and the Liberal Democrats. The proposals were developed through in-depth consultations with RICS professionals, and to date over 1,000 people have been engaged on the campaign. ‘To take these ideas forward, we convened a series of working groups in early 2015, to develop clear plans for action on a number of the recommendations; principal among these were the establishment of a Housing Observatory, the issuing of Property Tax Forward Guidance within the first 100 days of the next government, and the delivery of a Resource Revolution in planning departments,’ said a spokesman. ‘Across each of these areas, we engaged with partners and stakeholders from the professions, from academia, and from government. Each panel moved beyond the headline recommendations to give concrete proposals on how each can be realised and their findings have been compiled in a series of policy blueprints for new Ministers,’ the spokesman added. Continue reading
Property prices and rents holding steady in the Gulf region
Residential property prices in Dubai have increased 1.5% year on year, led by villas, with apartment seeing prices grow at a slower rate, according to the latest index. Apartment prices increased by just 0.8% compared with a year ago in March but increased 1.74% month on month, the data from ReidIn shows. Villa prices were up 4.5% year on year but month on month fell by 0.24%. The data also shows that rental prices fell by 0.29% but have increased 5.4% year on year. A breakdown of the figures shows that apartment rents decreased 0.2% on a monthly basis but are up 6.3% year on year. Villa rents have been much more stable in the last 12 months, up by 1% year on year and down by 0.25% month on month. Meanwhile, in neighbouring Abu Dhabi prices fell by of 0.48% in March 2015 but were up 0.4% compared to March 2014. Apartment prices were down 0.60% month on month and decreased 1.8% year on year while villa prices fell 0.4& compared to February but increased 0.9% year on year. In the rental market prices fell 0.75% in March but are still up 2% compared to March 2014. Apartment rents were down 0.45% month on month and down 2.6% year on year while villa rents fell 1.04% month on month but are up 4.7% year on year. Elsewhere in the Gulf region the Saudi Arabian market has seen variable real estate performance. Over the past year, residential prices in Riyadh have risen by 5% to 7% overall but there have been variable performances across the capital’s districts, according to the latest report from international real estate firm Knight Frank. It says that congestion issues in the south, for example, have resulted in prices stagnating while in the north, which has seen notable development activity, prices have increased by around 9%. ‘In the short to medium term, with new supply unlikely to be able to fully offset pent-up demand, we expect residential prices to continue to move in an upward direction,’ said Stefan Burch, Knight Frank partner for Saudi Arabia advisory services. The report points out that in recent year Saudi Arabia’s residential construction sector has been expanding rapidly. Indeed, the latest available data shows that the value of residential building construction across the kingdom rose for the ninth consecutive year in 2012, increasing by 11.4% year on year to SAR95.6 billion. ‘Not surprisingly, Riyadh is an important driver of construction activity in Saudi Arabia. The capital accounted for an average of 27% of all residential and commercial permits issued across the kingdom between 2003 and 2013. Moreover, the number of permits issued in the capital rose by 319% over the 10 year period, outperforming Saudi Arabia as a whole, which experienced a 215% increase,’ explained Burch. Despite rising development activity however, demand for residential units continues to outstrip supply in Riyadh. Indeed, the capital has a requirement for around 50,000 housing units per annum… Continue reading
UK house hunters holding off until general election result, agents believe
House hunters in the UK seem to be holding off making a decision with the country’s general election just a week away, according to the latest monthly report from estate agents. Some 63% of members of the National Association of Estate Agents (NAEA) believe that demand for homes is at its lowest since last year with just 343 house hunters registered per branch compared with 406 last September when demand was at its highest. The report also shows that just 22% of total house sales in March were made to first time buyers, the lowest since July 2014 and down 30% from February. NAEA member agents are concerned about supply and demand for first time buyers as housing policy remains one of the big election issues. The report also shows that almost half, 48%, of agents favoured the Conservatives’ pledge to build 200,000 new starter homes, arguing that this initiative will be the most beneficial for the first time buyer housing market. However, only 6% back Labour’s promises to boost house building rates to 200,000 a year by 2020 and 31% do not believe that any of the proposed policies will be enough to straighten the market out. ‘We would always expect to see an event as monumental as a general election having an impact on the property market. But what makes this election so interesting is that no one knows what the result will be,’ said Mark Hayward, NAEA managing director. ‘And with housing featuring so prominently in all three main parties’ manifestos, buyers in particular are holding off to see what will happen. The outcome of the election will impact first, second, third and last time buyers,’ he added. The NAEA report also shows that while demand is down to 343 house hunters registered per branch in March, supply is up 12% from 43 to 48 houses available per NAEA member branch, as houses stay on the market for longer with nervous buyers. Demand still hugely outstrips supply, so a fall in demand does not affect the number of sales. March saw an increase in the amount of sales agreed per branch, with 10 sales going through, compared to eight in February. ‘We may have seen a slight increase in supply this month, but it is not an ongoing trend or a big enough jump to fill the gap for demand. It’s encouraging to see all parties actively proposing plans to regulate supply and demand,’ said Hayward. ‘However, the policies in place are unlikely to be enough to rectify the crippling situation we’re in. It’s all very well proposing to build 200,000 houses, but planning law, lack of infrastructure and available labour can make this process so lengthy that it may be ten or twenty years until we see this, by which time demand will be greater,’ he explained. ‘Although our agents have seen the market cooling off ahead of the General Election, it will inevitably bounce back again at a rapid… Continue reading
