Latest Property News
Four in ten UK first time buyers have benefitted from stamp duty holiday
published on Fri, 16 Mar 2012
An extra four in ten first time buyers have been exempt from paying stamp duty as a result of the UK government raising the starting threshold from £125,000 to £250,000 over the past two years, according to estimates from the Halifax. The temporary increase in the threshold has meant that 95% of first time buyers over the period have not had to pay stamp duty.An estimated 150,000 first time buyers have benefitted from the increase in the threshold over the past two years with approximately 380,000 first time buyers paying no stamp duty.Returning the starting threshold to £125,000 will result in nearly 45% of first time buyers paying stamp duty it says in its new report.The South East and Greater London have benefitted most from the change with around seven in ten first time buyers having to pay no stamp duty directly due to the raising of the threshold from £125,000 to £250,000. The North and Northern Ireland have benefitted the least with only one in six first time buyers exempt from the tax as a result of the increase.Only 4% of first time buyers in Greater London will be exempt from stamp duty when the starting threshold returns to £125,000 next week. Four in five first time buyers in the South East will pay the tax.The proportions of first time buyers paying stamp duty will be much lower in other parts of the country with less than one in five paying the tax in the North and Northern Ireland.‘The stamp duty holiday has directly helped four in ten first time buyers over the past two years. Regionally, the impact has varied considerably with around seven in ten first time buyers in London and the South East exempt from the tax as a direct result of the temporary change. Returning the threshold to £125,000 will hit those buying their first home in these parts of the country most,’ said Martin Ellis, Halifax housing economist.‘However, the doubling in the starting threshold has been a significant benefit to those who have benefitted during a time of economic and financial difficulty for many. A first time buyer making a purchase of £200,000 will see their buying costs increase by £2,000,’ he added.The report also shows that if the higher stamp duty thresholds were increased in line with house price inflation since July 1997 when the £250,000 and £500,000 stamp duty thresholds were introduced, they would now stand at £584,000 and £1,169,000 respectively.Whilst areas outside London and the South East have benefitted most from the stamp duty holiday, more than a quarter, 27%, of first time buyers purchases in the capital and 6% of first-time buyer purchases in the South East have still had to pay stamp duty. In contrast, over 95% of first time buyer purchases have been below the temporary starting threshold of £250,000 in all regions outside Greater London and the South East. These differences are explained by the much higher percentage of first time buyer purchases ...
UK house prices fall for 21st month in a row, latest Knight Frank index shows
published on Fri, 16 Mar 2012
UK house prices fell for the 21st consecutive month in March but people are more upbeat about the outlook, according to the latest House Price Sentiment Index (HPSI) from Knight Frank and Markit Economics.The house price index, which is based on a nationwide survey of 1,500 households, showed that London was the only region where households felt that the value of their property was higher this month than last.But the survey, which also asks households about what they think will happen to the value of their home over the next 12 months, gave the most upbeat reading for future house prices in nearly two years, perhaps reflecting the recent slightly more positive news from the economy.The future house price index climbed to 54.3 in March, up from 50.2 in February. Any figure under 50 indicates that prices will fall, and the lower the figure, the steeper the decline. Any figure over 50 indicates that prices will rise. Households in six of the 11 regions expect the value of their homes to rise over the next year. In London 65.2 expect the strongest rises, 56.2 in the East of England, 60.2 in the South East and 58.1 in the South West.Sentiment about future house prices has also risen sharply in Wales, up to 55.1 and up to 56.3 in Scotland. But households in the Midlands and the north of England are more downbeat, with 43.6 of those in the North East expecting the biggest falls in the value of their home over the next 12 months.Those working in the private sector (56.1) are much more upbeat about the prospect of house prices rises over the next year than those working in the public sector (51.4), although this is the first time that the index for public sector workers has risen above 50 in six months. There was a sharp bounce back in the outlook for house prices among those who work in the financial and business services sector. They expect the biggest house rises over the next year, with a reading of 65.9, up from a record low of 43.1 in January.Those working in the construction sector (60.2) are also expecting prices to rise appreciably over the next 12 months. Those working in the retail sector (44.2) are the least optimistic about house price movements, expecting bigger falls in the next 12 months than in February, when the reading was 49.7. Both home owners and those living in the rental sector as well as those living rent free at home, expect prices to rise over the next year. Those who have a mortgage on their home expect the biggest rise (55.3) followed by those who own their homes outright (54.5). ‘The overall outlook among households for property prices over the next 12 months has picked up strongly, with the highest future HPSI reading in nearly two years. This coincides with economic news hinting at some green shoots of growth, and positive mortgage lending figures, signalling at a slight loosening in the constricted mortgage market,’ said Gráinne Gilmore, head of UK residential research at Knight Frank.‘But behind the ...
First time buyers in the UK ignore practicalities, it is claimed
published on Fri, 16 Mar 2012
Inexperienced first time buyers are ignoring the practicalities of owning a home, according to new research from HSBC published today (Friday 16 March).The major considerations for first time buyers when looking for a property are location (35%), size of the outside space (27%) and local amenities (21%). However, few consider more practical aspects important to their search such as plans for development in the area (1%), the condition of nearby properties (4%) signs of subsidence (5%) and the cost to update the property (6%).HSBC asked 155 first time buyers what questions they felt were most important to ask the vendor when buying a property and 100 estate agents what questions they would advise first time buyers to ask.The results highlight differing views. First time buyers are more immediate in their outlook while estate agents identified more practical questions pertinent to the longer term considerations of living in and owning a property.Some 49% of estate agents said that the first issue should be whether a property is well maintained but only 16% of first time buyers agreed. Documents came second with estate agents with 33% highlighting their importance but only 11% of first time buyers thought so. Location was given almost equal importance with 33% of estate agents rating it and 35% of first time buyers.The presence of damp was rated as important by 18% of estate agents but just 8% of first time buyers and the condition of a house’s boiler was important for 21% of agents but only 10% of first time buyers.‘It is important that first time buyers consider more than just their immediate desires when looking for their first home, as otherwise they could well be in for a financial headache further down the line,’ said Peter Dockar, head of mortgages at HSBC.‘While in the excitement of searching for their first property they may not like to think about the required maintenance or, the condition of items such as the boiler, these will be a concern if it is something that they have to pay to fix at a later date,’ he explained.‘Buying a home is a serious financial commitment so it is important that first time buyers do their homework and are aware of all of the potential costs involved to ensure they can maintain the value of what is, after all, likely to be the biggest asset for most,’ he added.
Sluggish start to property markets in 2012 to be replaced by improvements later in the year
published on Thu, 15 Mar 2012
This year will be a reverse image of 2011, and a tale of two halves for the global economy and the world's commercial real estate markets, according to global real estate services firm Cushman & Wakefield's latest Market View report.While there was a healthy start for 2011, rising uncertainty surrounding the resolution of sovereign debt issues in Europe and the US led to a slowdown in the economy and commercial real estate activity in the second half of the year. The exact opposite performance is expected for 2012, with a sluggish beginning giving way to improvements in the latter half of the year.‘Despite uncertainties, there remains a well of pent up demand in most nations. As the year progresses and uncertainty subsides, improving economic conditions will support a boost in commercial real estate activity,’ said Glenn Rufrano, president and chief executive officer of Cushman & Wakefield.The report says that the main economic and market drivers for the year will be continuing strength in Asia from local demand growth, steady growth in the Americas and weakness in Europe, as sovereign debt issues continue to take a toll. The approach each region takes to reducing its debt issues will be a critical determinant of its economic performance.The evolution of the global economy will likely provide opportunities in 2012 for both real estate investors and occupiers, it says. ‘Deleveraging will lead to opportunity for investors, as European financial firms come under pressure to dispose of assets to increase capital, with real estate likely to be among those assets sold,’ it explains.Despite regional differences and early year weakness, the global office leasing market will experience declining vacancy rates and rising rents in 2012, although the pace will vary by region. While the softer global economy is likely to lead to sluggish performance of industrial markets in Asia and Europe, the greatest opportunity is foreseen in North America, where supply growth has been limited and rising demand may lead to higher trade volumes and industrial output.It also points out that 2011 saw a 14% increase in global investment sales to $808 billion. For 2012, a 7.5% increase is anticipated, for a total of $867 billion in sales. More product will be brought to market as institutions are in better positions to dispose of assets.While sales are projected to be flat in Europe, at approximately $198.5 billion, and even in Asia at $374 billion, investment activity in the Americas is forecast to increase 25% over 2011 levels, to approximately $295 billion.
Buying a property still beats renting across most of the UK
published on Thu, 15 Mar 2012
The cost of having a mortgage to buy a property in the UK is cheaper than renting in 84% of towns and cities in the UK, but the figure is down from 94% three months ago, research reveals.It is cheaper to service a mortgage than to rent in 42 of Britain’s top 50 towns and renting is now 16% more expensive on average than owning across Britain, the survey from property website Zoopla also shows.And it found that renters in London pay £6,687 more on average per year than home owners and overall renting in Britain is costing 16% more on average than buying, up from 11% this time last year.The average monthly rent in Britain has come down slightly by £9 on average over the past three months to £1,470 per month in February 2012. Meanwhile asking prices have dropped by £6,500 on average over the same period to £255,037.Swansea, Oldham and Cambridge top the list of places where it currently still pays to rent rather than buy with rental discounts ranging from 4.6% to 8.4%. In contrast, it make most sense to buy in Milton Keynes where renting is 38.8% more expensive than servicing a mortgage, leaving renters £2,580 per year worse off on average.York and Preston also offer buyers better deals to buy than rent with renters paying around a third more on average in both places. In London, despite the high cost of buying, it still beats renting with the average asking price for a two bedroom flat in the capital currently at £452,387, while the average rent for an equivalent property is £2,422 per month, making renting 29.6% more expensive than owning on average. ‘Despite a recent increase in first-time buyer activity, demand from remains strong and is keeping rental levels at historic highs. This, along with historically low borrowing costs, makes it as good a time to buy as it ever has been. However many buyers are still unable to take advantage of these conditions because of their inability to secure a mortgage,’ said Nicholas Leeming of Zoopla.
