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Rental values increased across almost every London borough in 2015
Residential rental values have climbed to record highs across almost every borough in London as renting a home has become a more attractive option that buying, a new report suggests. Changes in stamp duty, fluid job markets and the way many overseas professionals are taxed in the UK, means that many people are opting to rent, according to the report from Benham & Reeves Residential Lettings. With demand continuing to rise and the anticipated exit of amateur landlords from the market due to more restraints such as the new 3% top up stamp duty, rental values in 2016 are likely to continue on this upward trajectory, the firm says. Its figures for 2015 show that virtually every borough in zones 1 and 2 saw rental values increase by more than 4% year on year. Indeed, only Richmond-upon-Thames and a small area around Edgware Road in central London saw rents fall. However, rental values became slightly more modest the further away from the city centre with even outlying boroughs such as Barnet and Ilford seeing significant growth, the report points out. Hackney saw the biggest increase in rental values in 2015, up 33% while Bow, Bethnal Green and Haringey all experienced double digit growth as well. As the British economy has emerged from recession and tenants have finally moved to bigger accommodation in line with increasing household income, the rental market has benefitted, the report also points out. The most significant change, however, has been the changes to stamp duty which have affected London more than any other area of the country. With the average of a house in London now standing at over £500,000, many family homes are now liable for the 10% stamp duty rate with many modest family homes even incurring the 12% stamp duty rate. Many tenants have calculated that they can rent for years, often in better neighbourhoods than those in which they could afford to buy, for the sum they'd pay in stamp duty alone. ‘George Osborne has done more for the rental market than any other chancellor in history. Thanks to the changes in stamp duty rates, he has made renting long term a more attractive option for many tenants. Couple that with the fact that many overseas tenants can write their rent off against tax but must pay capital gains on any property they own and renting becomes a no brainer,’ said Marc von Grundherr, the firm’s lettings director. ‘We are advising landlords who are already in the market to hang onto the properties, and not be tempted to sell ahead of changes to wear and tear allowance and mortgage relief. Many nervous investors will leave the market and when they do, supply will be limited even further. The rent increases that will inevitably result will more than mitigate landlords' extra costs,’ he added. Continue reading
Spanish property sales up for 18th month in a row
Residential property sales in Spain are continuing to rise with the latest data showing that the number of transaction recorded by notaires increased by 7.3% compared with the same month in 2014. It marks some 18 months of continuous growth, the figures from the General Council of Notaires shows with its analysis report saying that the recovery in the housing market is being maintained. A breakdown of the data shows that apartment sales increased by 6.2% year on year, more than double the increase recorded in October 2015. This was due to sales of free price apartments rising 8.3% and also sales of second hand apartments rising by 12.2%. Sales of individual family homes also saw strong growth, up 11.4%, recording nine months in a row of double digit increased. However, sales of new housing fell for a tenth month in a row, down in November by 18.6%. But prices are still up and down. The average price per square meter of homes sold in November was €1,219 per square meter, a fall of 1.1% year on year. A breakdown shows that apartment prices fell by 0.6% and the price of individual family homes fell by 0.8%. The data also shows that the price per square metre of second hand apartments fell by 0.7% year on year to €1,320 but for new apartments it increased by 5.9% €1,666. The total number of new mortgage loans also increased by 7.3% year on year in November but in seasonally adjusted terms this figure moderates to an increase of 2.4% year on year, the lowest increase in 18 months. Continue reading
UK home owners confident about prices rises in 2016, latest sentiment index shoes
Households across the UK expect house prices to rise in 2016 believe that the value of their home rose in December, according to the latest research. People in London perceived the strongest rate of price growth over the course of the month, while households in the North West reported the most modest rate of growth, the data from the House Price Sentiment Index from Knight Frank and Markit Economics. The strongest growth expectation was in the East of England but the rate of growth expected over the next year eased in six of the 11 regions in January. The figures shows that 20.9% of the 1,500 households surveyed across the UK said that the value of their home had risen over the last month, while 3.6% said that prices had fallen. This resulted in a HPSI reading of 58.7. This is the thirty fourth consecutive month that the reading has been above 50. Any figure over 50 indicates that prices are rising, and the higher the figure, the stronger the increase. Any figure below 50 indicates that prices are falling. January’s reading was a slight decrease from the 59.4 recorded in December, but returns the index to the same level as seen in November. It is just slightly higher the average reading of 58.5 recorded throughout 2015, but remains below the peak of 63.2 in May 2014, reflecting the easing in average UK house price growth seen since then. Households in all of the 11 regions covered by the index reported that prices rose in January, led by households in London at 68.1 and the South East at 64.3, although in both cases these sentiment index readings were slightly lower than in December. The current sentiment index was lowest for the North West at 51.3 and the East Midlands at 52.3, indicating that households in these regions perceived the most modest rise in prices across the UK in January. The future HPSI, which measures what households think will happen to the value of their property over the next year, rose slightly in January to 70.5 from December’s 70.3. This is the highest reading since June 2015, but remains below the peak of 75.1 reached in May 2014. Households in the East of England chalked up a record high reading for future house prices expectations at 81.1, indicating they anticipate the largest increase in the value of their home over the next 12 months. Londoners at 79.1 continue to expect strong growth in prices over the next year, with the highest reading for the region since May 2014. Meanwhile, there was a notable drop in the future reading for the North West, down from 67.5 to 62.3 in January, as well as Scotland, which fell to 61.8, down from 65.8 in December, and an average reading of 65.1 throughout 2015. Mortgage borrowers are the most confident that prices will rise over the next year at 76, followed by those who own their… Continue reading
