TSI
UK asking prices down 1.1% in December, lowest seasonal dip since 2006
The UK residential property market has experienced its lowest property price dip for the end of the year since 2006, according to the latest index figures. Traditionally prices fall off in the run up to the festive season but the data from Rightmove shows that asking prices fell 1.1% in December and it is forecasting price growth of 6% for 2016. It says that increasingly stretched affordability and extra stamp duty on the buy to let sector will be outweighed by stark imbalance between supply and demand. Indeed, buyer enquiries to agents since the beginning of October this year are up 37% but the number of properties coming to market was down 5% compared to the same period in 2014. Looking ahead demand is expected to increase further in more affordable cities such as Leeds, Edinburgh, Cardiff and Manchester as highly skilled workers may choose to leave London for buoyant city regions. The lower than expected fall in prices mean that the annual increase is almost £20,000 or 7.4%, taking the average asking price to £289,452. ‘Whilst a fall is the norm at this time of year, this is December’s best post financial crash performance, signalling another round of price rises in 2016. Despite the shortage of suitable stock in many parts of the market, demand for housing is on the up,’ said Miles Shipside, Rightmove director and housing market analyst. ‘Although the average price of property coming to market is already up by a hefty 7.4% compared to a year ago, Rightmove forecasts that prices will reach and breach new records next year,’ he added. He explained that whilst initiatives are in place to encourage developers to build more new homes to supplement the supply of existing ones coming to market, the lead times are long and developers face capacity constraints. ‘In the meantime strong demand is being further fuelled by the additional momentum and aspiration for home-ownership that schemes such as Help to Buy create. We therefore predict that the average asking price will be another £17,000 higher by the end of 2016,’ said shipside. An analysis of Rightmove data by Dr Alasdair Rae, of the University of Sheffield, suggests that there could be an exodus of highly skilled workers leaving London for more affordable yet vibrant cities such as Leeds, Edinburgh, Cardiff and Manchester. But this ripple effect won't reach all towns and cities and continued stagnation or price falls are likely in less sought after areas in the north and west of the country, especially if buy to let investor activity tails off. Rae suggests that as choosier buyers demand easier access to amenities to satisfy convenience and lifestyle demands, expect to see increased price divergence between the more buoyant large urban markets and smaller urban areas that can’t offer the same range of facilities. ‘2016 may be the year when many young urban professionals finally give up on the London market and consider long term career moves… Continue reading
Scottish govt announces extra tax on second homes, following rest of UK
Private rented sector landlords in Scotland and second home owners face an extra 3% stamp duty tax from next year which will bring them into line with changes in England and Wales. It was only a matter of time before the change came about after the UK Chancellor George Osborne announced the additional tax for England and Wales in his recent Autumn Statement. Scottish Finance Minister John Swinney said that he would bring forward legislation on the new second home charge soon so that it could be in force by April 2016. ‘I am conscious of the issue of second homes. We need to ensure that the opportunities for first time buyers to enter the market in Scotland are as strong as they possibly can be and we need to make certain that tax changes elsewhere in the UK do not make it harder for people to get on the property ladder,’ he explained. It means that an extra 3% rate will apply to the purchase of additional properties, such as buy to let and second homes from 01 April 2016 and be levied on the total price of the property for all sales above £40,000 on top of the current LBTT rates. The Scottish Government has forecast that it will raise overall LBTT receipts in 2016/2017 by between £17 million and £29 million, rising to a possible £66 million by 2020/2021. Overall the Government expects LBTT will raise £295 million in 2016/2017. John Blackwood, chief executive of the Scottish Association of Landlords, said that landlords will be disappointed and frustrated by the decision which will effectively ‘punish’ those who choose to invest in the private rented sector (PRS) Scotland. ‘The supplementary tax on the purchase of second homes will have a huge impact on the buy to let market and exacerbate an already serious shortage of properties in many areas. We firmly believe that the biggest losers from today's statement will be tenants who will now find it even harder to get the accommodation they want at a price they can afford,’ he added. Oliver Knight, a senior analyst in Knight Frank’s residential research department, said that sales will be brought forward as landlords and others seek to minimise their property tax burden. He added that buy to let property investors will also be able to continue offsetting all stamp duty against capital gains tax when they sell their property. Bob Cherry, partner at property consultants CKD Galbraith, also believes that there will be a flurry of activity before the end of March 2016. ‘This new levy will have implications for current landlords looking to sell as well as act as yet another deterrent to would be landlords thinking about the market as an investment opportunity,’ he said. ‘This measure, like the LBTT rises introduced earlier this year, is also a wealth tax on owners as buyers of buy to lets will seek to pass on the extra purchase costs by reducing… Continue reading
Auckland sees residential construction work double in four years
The value of construction in most regions in New Zealand increased in the third quarter of 2015 with Auckland seeing a new high of $943 million worth of residential work, up $107 million from a year ago. Overall building work worth $4.2 billion was put in place in the September 2015 quarter, up 4% on the September 2014 quarter, according to official figures from Statistics New Zealand. ‘The value of building work increased in most regions. Similar to last quarter, residential work grew most in Auckland, while non-residential work grew most in Canterbury,’ said Statistics New Zealand business indicators manager Neil Kelly. In Auckland, a new series high of $943 million worth of residential building work was recorded in the September 2015 quarter, up $107 million from a year ago. The current quarter's value is double what it was four years ago in the September 2011 quarter. After removing price changes and seasonal variations, the national volume of all building activity increased 0.5%, following a 1.6% increase in the June 2015 quarter. Within this, the volume of residential work increased 2.9% while non-residential work fell 2.6%. The volume trend for non-residential building activity grew 0.4% in the September 2015 quarter, a similar level as the previous series high in the March 2006 quarter. Meanwhile, the residential building activity volume trend grew 1.4% in the latest quarter, but the level was still 6.3% lower than the June 2004 quarter peak. The overall building activity volume trend grew to a level last seen 10 years ago in the June 2005 quarter, the previous series peak. Meanwhile, official data also shows that all 16 regions of New Zealand are projected to have more households in 2038 than in 2013 and most territory authority areas (TAs) will also have more households. The Auckland region is projected to account for about half of the national growth in the number of households between 2013 and 2038, increasing from 500,000 to 750,000. Over the same period, the region is projected to account for roughly 60% of New Zealand's population growth. By 2038, some 35% of all households in New Zealand will be in the Auckland region, up from 30% in 2013. Continue reading
