Tag Archives: finance
House prices in Slough and Reading set to benefit most from London’s Crossrail project
House prices in the commuter towns of Slough and Reading have so far benefitted the most from the new Crossrail project that will join central London to routes west and east of the city when it opens in 2019, new research shows. House prices in these two locations have increased by 39% and 33% respectively since April 2014, compared with the regional average of 22%, according to the research from UK home lender the Nationwide. The railway line, to be known as the Elizabeth Line, will stretch from Reading and Heathrow in the west to Shenfield and Abbey Wood in the east, meaning that 40 stations will connect town in Berkshire and Essex to major hubs in London including the City and Canary Wharf as well as Heathrow airport. According to the research commuter towns' property markets are likely to benefit most from the introduction of Crossrail as Greater London stations are already well integrated, with good transport links around the capital, and thus house prices in these areas are unlikely to benefit substantially from marginal improvements in transport links. The strong rate of house price growth in Slough and Reading has been driven by robust demand for properties and a rise in transactions. Following the announcement that the project would go ahead, the number of homes sold in the three months to August 2014 was up 24% year on year in Wokingham, versus an average increase of 16% in the region as a whole in the same period. The research explains that eastern branches of the line do not extend as far out of Greater London as the western section, only reaching Brentwood and Shenfield outside of the capital and this may help to explain why the positive Crossrail effect apparent in the west is slightly more muted in the eastern section. House prices in the borough of Brentwood, which also includes Shenfield, have increased by 43% since the May 2010 government pledge of completion, compared with a regional average in the East of England of 36%. Over the last two years Brentwood house prices have risen broadly in line with the regional average at 24% versus 23%. The report suggests that lower rate of price growth, compared with western areas, may be due to the area already having good transport links to both The City and the Docklands, via Stratford, through Greater Anglia services and also the Shenfield metro now operated by TfL Rail. ‘Slough has been much maligned for many years. However, our research into the effect of the new Elizabeth Line on house prices in the town suggests that this may be unfair and that Slough, in fact, may be a more desirable place to live than people might imagine,’ said Andrew Harvey, senior economic analyst at Nationwide. He pointed out that the analysis suggests that the Crossrail project has provided a significant uplift to prices on the western section of the line to Berkshire. Slough, in particular, has… Continue reading
Metro area home prices soar in US with first plus $1 million median value recorded
Home prices are continuing to rise in the United States with the median value for a single family home reaching more than $1 million in a metro location for the first time. The record prices was reached in San Jose, California, while the vast majority of metro areas seeing prices rise in the second quarter of 2016, the data from the National Association of Realtors shows. Overall the median existing single family home price increased in 83% of measured markets, with 148 out of 178 metropolitan statistical areas showing gains based on closed sales in the second quarter compared with the second quarter of 2015. Just 29 metros recorded lower median prices from a year earlier and 25 saw double digit increases. According to Lawrence Yun, NAR chief economist, a faster pace of home sales amidst languishing inventory levels has pushed home prices higher in most metro areas during the second quarter. ‘Steadily improving local job markets and mortgage rates teetering close to all-time lows brought buyers out in force in many large and middle tier cities,’ he said. ‘However, with homebuilding activity still failing to keep up with demand and not enough current homeowners putting their home up for sale, prices continued their strong ascent and in many markets at a rate well above income growth,’ he added. The national median existing single family home price in the second quarter was $240,700, up 4.9% from the second quarter of 2015, which was previously the peak quarterly median sales price. The median price during the first quarter of this year increased 6.1% from the first quarter of 2015. Total existing home sales, including single family and condos, rose 3.8% to a seasonally adjusted annual rate of 5.5 million in the second quarter from 5.3 million in the first quarter of this year and are 4.2% higher than the 5.28 million pace during the second quarter of 2015. ‘Primarily from repeat buyers moving up or trading down, existing sales increased each month last quarter and could’ve been even higher if not for a few speedbumps. Closings were slowed a bit by meagre supply levels and home prices in many areas that are still rising too fast,’ Yun explained. At the end of the second quarter, there were 2.12 million existing homes available for sale, which was below the 2.25 million homes for sale at the end of the second quarter in 2015. The average supply during the second quarter was 4.7 months, down from 5.1 months a year ago. According to Yun, without enough new construction being built, existing inventory seriously failed to keep up with the growing demand for buying. As a result, homes typically stayed on the market for around a month throughout the second quarter and over 40% of listings sold at or above list price, with June being the highest share since NAR began tracking in December 2012. Yun pointed out that many listings in… Continue reading
Call for stamp duty on property purchases in UK to be abolished
A new report calls on the government to undertake real reform to tackle the housing shortage in the UK and in particular to abolish the stamp duty payable on home purchases. According to the TaxPayers' Alliance successive governments have avoided meaningful reform, instead focusing on tinkering around the edges which has only served to worsen the situation and drive up prices. It says that recent tax changes will drive up rents and the recently implemented 3% stamp duty additional homes surcharge and new restrictions on finance cost relief will also advantage richer prospective buyers at the expense of poorer tenants. The TPA says stamp duty is an unfair tax which stops people from buying their own home, settling down with a family, moving for work or downsizing and makes the dream of home ownership ever more distant for millions of families. The report explains that the 3% stamp duty additional homes surcharge will help prospective buyers but it will hurt tenants in rented accommodation and the restriction of finance cost relief for individual landlords will also advantage prospective buyers at the expense of tenants. It believes that both policies will distort housing markets, with implications for incomes, employment and overall welfare and the tax hikes make Britain’s complex tax system even more complicated and distort ownership structures. Other local policy choices such as increasing the cost of houses in multiple occupation (HMO) licences and introducing landlord licencing schemes will hit tenants and as existing owner occupiers take advantage of lower house prices this will result in a tightening of supply conditions in the lettings market, raising rents. The report calls for the stamp duty surcharge to be cancelled, for all stamp duty rates to be halved immediately in a run up to the tax being abolished and reform to planning restrictions to declassify some green belt land and allow taller, denser construction in urban areas. It explains that pressure needs to be taken out of the housing market by making land available for development less rare and less expensive to build on and says that declassifying just 5% of the green belt around London would allow the city to expand by almost a sixth. ‘For decades politicians have failed to tackle the root causes of the housing crisis: a chronic lack of supply. What's more, Stamp Duty is still punitively high and gimmicky tweaks to the tax system will ultimately end up penalising tenants and increasing rents,’ said Jonathan Isaby, chief executive of the TaxPayers' Alliance. ‘The new Chancellor should now seize the opportunity to drastically simplify and reduce property taxes as well as liberalise planning restrictions, which prevent huge swathes of land from being built on for no good reason at all,’ he added. David Cox, managing director of the Association of Residential Lettings Agents (ARLA) said he would welcome a renewed debate on property tax. ‘ARLA has been consistent in our view that increasing tax for landlords will increase rents and reduce property standards… Continue reading
