Tag Archives: capital-gains
Mortgage lending in UK fell in February month on month, no big change expected
Gross mortgage lending reached £17.6 billion in February, some 5% lower than January but 30% higher than February last year, according to the latest estimates from the Council of Mortgage Lenders. It is, however, the highest lending total for a February since 2008 when gross lending reached £24.1 billion. ‘Lending continues the year on a positive note, with our monthly estimate showing an increase of 30% in February compared to a year ago. This growth rate is in line with what we saw in the closing months of 2015,’ said CML economist Mohammad Jamei. He explained that the recovery is being underpinned by market fundamentals in the UK, as wages grow and unemployment falls, helped by government schemes and competitive mortgage deals but the CML thinks it is unlikely that there will be any significant acceleration in lending. ‘While there may be a slight current boost to lending as some transactions seek to complete before the 01 April tax changes in the buy to let sector, this is likely to be followed by a slight fall in activity. Affordability pressures continue to weigh on activity, as does the low number of properties coming on the market, though this has been improving very recently,’ he added. Andy Knee, chief executive of LMS, believes that apart from a slight dip in activity expected following the April tax changes, all factors are working in the mortgage market’s favour. ‘Despite a delay in the base rate rise, the remortgage market in particular is likely to continue unabated, with home owners sitting on record housing equity and capitalising on the hugely competitive rates currently available,’ he pointed out. According to Peter Rollings, chief executive officer of Marsh & Parsons, once the April deadline passes it will quickly revert to business as usual, and a subsidence in buy to let borrowing will likely water down the growth in the mortgage market. ‘The Chancellor is certainly laying the long-term foundations for future mortgage lending levels, with the Lifetime ISA announcement just the latest guise to help first time buyers save up for a deposit and get onto the property ladder,’ he said. ‘But these savers are a long way down the pipeline, and in the immediate term, borrowing is more likely to feel the brunt of measures affecting the buy to let market. Property investors were completely overlooked in the Budget, and the Chancellor’s move to exclude landlords from the tax break on capital gains seems at odds with the need for greater supply of property on the market. Any measure that discourages and disincentives selling homes is not helpful in the current climate, and for buyers trying to keep track of house prices,’ he added. Continue reading
Prices in Australian cities up 0.5% in February, but growth is moderating
Property prices in Australia’s capital cities increased by 0.5% in February and by 1.4% over the last three months, according to the latest index figures. However the trend in annual growth has slowed over the last seven months from 11.1% to 7.6%, the CoreLogic RP Data home value index also shows. Prices increased in all capital cities apart from Perth and Canberra were prices fell by 1.1% and 0.2% respectively and over the past three months they increased across all capitals except Sydney where they fell by 0.2%. An examination of the data shows that the largest monthly increases in home values were recorded in the cities that have been underperforming over the growth cycle to date. In Hobart values were 2.9% higher, Adelaide up 1.9% and Brisbane up 1.8%. The cities to record the greatest value rises over the past three months have been Hobart with growth of 8.5%, Melbourne up 3.8% and Brisbane up 2%. According to CoreLogic RP Data head of research Tim Lawless, even though home values have trended lower over the year in Perth and Darwin, they have recorded value rises of 0.2% and 0.3% respectively over the past three months. He also pointed out that while values are still increasing across most capital cities however, the results remain diverse. Sydney and Melbourne remain the strongest markets in trend terms, however, the gap is widening between the performances of Melbourne relative to Sydney. Over the past 12 months, combined capital city home values have increased by 7.6%, with the annual rate of growth down from a recent peak of 11.1% recorded in July last year. Melbourne has maintained its number one growth position, with annual capital gains of 11.1%. ‘Melbourne values appear to be holding reasonably firm since December last year with the annual rate of capital gain virtually level over the past three months,’ Lawless explained. Sydney’s annual rate of growth has continued to moderate, having almost halved from its cyclical peak of 18.4% recorded in July last year to reach 9.5% growth over the past 12 months. Lawless said that despite the slowing trend, Sydney remains the second best performing capital city over the past year but he pointed out that a few of the smaller cities where growth rates have recently accelerated may start to rival Sydney’s position over the coming months. ‘The trend in home value growth is showing signs of increasing in those markets that have previously underperformed. These include Brisbane, Adelaide, Hobart and Canberra. Affordability constraints aren’t as apparent in these cities and rental yields haven’t been compressed to the same extent as what they have in Melbourne or Sydney,’ Lawless said. ‘Home values increased in Brisbane by 5.5% over the past year, which is the fastest annual rate of value growth in a year. In Hobart, home values are 6.2% higher over the year, which is its fastest annual rate of home value growth since July 2010,’ he added. Continue reading
Prime property market in Gibraltar offers value for money on global stage
After several years of strong growth Gibraltar, a British overseas territory on the southern tip of Spain, is seen as offering good value for prime property, according to a new report. Indeed, prime property prices have increased by 15% from 2013 to 2015 with demand driven by Gibraltarian, UK and other international buyers, says the new analysis from international real estate firm Savills. It points out that Gibraltar is among an elite and small club of territories within Europe with special and unique governance, independence and tax status. A self-governing territory with a population of 32,000, bordering a much larger neighbour, it draws parallels with Monaco. Hybrid centres of business and leisure and located in the Mediterranean, both have the characteristics of ‘city’ and ‘resort’ and each has developed an international professional services sector and are centres of commerce in their own right. Prices in these territories appreciated at a time when other national markets in neighbouring countries have been languishing. Comparisons with Monaco only go so far, the report explains. Gibraltar has its own unique characteristics, history, culture, and has developed on its own path. Emerging later on the global stage, Gibraltar’s prime property market still offers value when compared to rival jurisdictions, the report says. It explains that diversification in Gibraltar’s economy has supported economic growth, generated wealth in the local economy and spurred a wave of new development. ‘Entirely new market tiers have opened up to attract the global wealthy. The hybrid nature of Gibraltar as a conurbation, destination and recreation location diversifies risk while maximising the market for property. This comes at a time when the prime markets of many world cities are at a high plateau,’ the report says. It points out that as Monaco and Hong Kong are becoming the preserve of only the super-rich, Gibraltar has the potential to fill a gap in the Mediterranean for high net worth individuals at various levels. ‘While it may not yet have the cachet of Monaco, proposed new developments, the right investment and infrastructure could propel Gibraltar onto the circuit of the global wealthy Gibraltar offers certain tax advantages for those wealthy individuals who make it their primary home. The territory levies no inheritance tax, wealth tax or capital gains tax,’ the report explains. Gibraltar’s prime markets are dominated by two nationalities: those from the UK, and those from Gibraltar, who have accounted for 39% and 34% of buyers in the last three years, respectively. The remaining 26% come from across the European Union and the rest of the world, and include Swiss, Germans, Russians and Australians. It describes Gibraltar as a place to relocate to, not as a second home market. Some 79% of the prime market is for main residences, while there is also an active investment market, accounting for 20% of sales. Investors favour smaller apartments, the average size being 81 square meter with an average price of £436,000, compared to 120 square meters… Continue reading
