Tag Archives: css
One in five home sales in UK fall through, latest data shows
The number of house sales failing to successfully complete in the UK fell in the first quarter of 2016, with just one in five house sales falling through, according to new research. Figures from independent home buyer Quick Move Now indicate a house sale fall through rate of 20% in the first quarter of the year, a drop of just under 8% from the final quarter of 2015. The annual year to date fall through, which the firm says gives a greater overview of how the property market is performing generally, was fairly constant throughout 2015 and into the start of 2016 at around 29% and finished the first quarter of 2016 at 29.07%. ‘The start of 2016 has been an interesting time for the UK property market. Strong demand and low supply in many areas has led to a strong financial performance and whilst it is encouraging to see that the number of sales falling through before completion fell in the first three months of 2016, many property owners and would be buyers would still be shocked to learn that one in five sales doesn't go through,’ said Danny Luke, business manager at Quick Move Now. The two biggest reasons why house sales didn't complete in the first quarter of 2016 were the vendor pulling out of the sale for a higher offer and either vendor or buyer pulling out because they felt the sale wasn't progressing quickly, both at 25%. The firm said that many areas experiencing very strong demand and low supply, so vendors are keen to achieve the best possible price for their property so are willing to pull out of an agreed sale if made a better offer. Other reasons included the buyer changing their mind, 18.75% of cases while a buyer being refused lending by a mortgage provider accounted for 12.5%, the chain collapsing, survey issues and a buyer wanting to renegotiate after the initial offer had been accepted all accounting to 6.25%. ‘A lack of properties coming to market has led to prospective buyers having to move very quickly in order to secure a property, and may mean they put an offer in on a less than ideal property due to fear that they'll be unable to find anything else, which accounts for buyers changing their minds and trying to renegotiate after the initial offer has been accepted,’ explained Luke. ‘Some inevitably get cold feet about such a large investment, or find that a survey confirms their fears, and pull out before the sale completes,’ he added. Continue reading
Big rise in new rental properties advertised in run up to additional homes tax hike
The rush to beat the April additional homes stamp duty deadline in the UK saw a big rise in new rental properties being listed in the week of the tax hike, research has found. Some 20.6% more properties were being advertised compared to the previous week in more than 90 towns and cities across the country, according to a study from property crowdfunding platform Property Partner. The research looked at the number of new rental properties being advertised between 28 March and 03 April and compared it to the period of 21 March to 27 March. In 85% of the locations there was an increase in the number of new rental listings over the past week compared to the previous week and in many areas, there was a significant increase in new rental properties advertised. Telford in the West Midlands, for example, saw rental listings up almost 160% in the week of the stamp duty deadline, compared to the previous week, and in Stevenage new adverts almost doubled. While five out of the top 10 areas in terms of a rise in rental properties being advertised, were in the North of England. Of the major cities, London saw new rental property listings up 19.4% between 28 March and 03 April, compared to the previous week. While, in Manchester and Birmingham, new rental ads were up 28.7% and 49.9% respectively The following table shows the UK towns and cities that saw the biggest increase in new rental property listings between 28th March and 3rd April, compared to the previous week, 21st March to 27th March. ‘Inevitably there was a final rush by investors to complete on property purchases ahead of the 01 April stamp duty surcharge deadline. More rental properties on the market is good news for tenants, but sadly this looks like a temporary blip,’ said Dan Gandesha, the firm’s chief executive officer. ‘The savings landlords have made may turn into losses further down the line. Future cuts to mortgage interest tax relief and likely interest rate rises, could wipe out profits and force many landlords to sell up,’ he explained. He believes that in the longer term it is likely that the supply of rented properties will fall and rents increase and the most important issue is to build more homes for tenants as well as buyers. ‘The Government has changed the whole structure of the UK buy to let market and made it less attractive and viable for amateur landlords. Once the dust has settled on the stamp duty hike, anyone looking to invest in residential property would be wise to consider alternatives to traditional buy to let, which do away with the hassle, expense and tax implications,’ added Gandesha. Continue reading
Larger number of UK landlords now considering setting up limited companies
With buy to let landlords in the UK now facing paying more property tax and facing cuts to mortgage tax relief, increasing numbers are considering moving their property investments into limited company vehicles. Some 41% of 1,400 landlords taking part in a survey commissioned by Paragon Mortgages indicated that they are considering moving their portfolio into a limited company following the Chancellor’s decision to limit tax relief available to landlords last year. A further 5% have already established limited companies. For larger landlords with 20 or more properties, 14% are already operating as limited companies, while 63% are considering it. In terms of portfolio growth, 43% of landlords surveyed agreed that the stamp duty increase will affect their buy to let purchasing plans over the next couple of years. This figure rises to 63% for larger landlords with 20 or more properties. Despite uncertainty about what impact the changes to tax relief and stamp duty might have however, tenant demand amongst landlords is still perceived as being high. Demand for rented property in the fourth quarter of 2015 was strongest in the South West where 40% of landlords reported demand to be rising. Landlords in the North East experienced the weakest demand, with just 24% of landlords reporting increased demand. Reflecting this demand, average yields have also remained stable and averaged 5.6% across the country, unchanged on the previous quarter. The North West saw the highest yields, at 6.2%, while outer London had the lowest, at 5.1%. ‘Recent government interventions into the buy to let market are now beginning to impact landlord sentiment and plans. The fundamental drivers of the market however, tenant demand and yields, remain strong so there are competing dynamics at play,’ said John Heron, director of mortgages at Paragon. ‘It is interesting to see that concern about the impact of changes to stamp-duty and tax relief is greatest among larger landlords. This concern is likely to grow now that the government have confirmed that landlords with larger portfolios will have to pay the increased rate of stamp-duty on buy to let purchases,’ he added. Continue reading
