Tag Archives: government
Prime property sales in Edinburgh hit by new land and buildings tax in Scotland
Prime property prices in Edinburgh rose by just 0.4% between April and June, the lowest quarterly price growth in two years, according to the latest market report. Prices are up by 3.4% on an annual basis which is down from the recent 5.7% high in June last year, the data from real estate firm Knight Frank shows. The firm pointed out that this slowdown in price growth can be attributed to the introduction of the new Land and Building Transaction Tax (LBTT) in April. The levy, which replaced stamp duty on all residential property transactions, means that those purchasing property with a value above £333,000 now pay more in purchase taxes. As a result, there was a spike in prime transactions in Edinburgh ahead of the introduction of LBTT. Since then however, there has been a fall in prime transaction levels in the city, with Knight Frank figures showing a drop in sales in the second quarter compared to the same period of 2014. The Scottish government originally forecast the tax would raise £235 million in 2015/2016. However, figures released by Revenue Scotland, the government body which administers and collects LBTT, showed that receipts from the new levy between April and June have so far totalled just £18.4 million. The Knight Frank report says it will be telling to see what impact the introduction of LBTT has on overall revenues at the end of this tax year but for now, the prime market in Edinburgh is still absorbing the change. Indeed, anecdotal evidence suggests that home buyers facing more tax under the new LBTT regime are negotiating with vendors over the additional burden, with the two parties often splitting the price difference between them. The market is expected to return to more normal trading conditions by the end of the summer however, and prices in Edinburgh are still being underpinned by low interest rates and continued economic growth. ‘We saw an enormous push pre-LBTT, with remarkably high sales in March followed by a very subdued April and May,’ said Edward Douglas-Home, head of Edinburgh City sales at Knight Frank. ‘Our experience is that buyers, particularly those looking for family homes valued at between £500,000 and £1 million, are having to eat further into their deposits when purchasing a property,’ he added. Continue reading
Four new housing zones for London to add 12,000 new homes
The Mayor of London has announced a further four Housing Zones across London, accelerating efforts to deliver the new housing that the rapidly expanding city needs. The new zones in the boroughs of Havering, Enfield, Redbridge and Tower Hamlets will together deliver over 12,000 new homes, nearly 3,500 of which will be affordable housing. This will bring the number of Housing Zones announced to 15 with a total of 45,109 homes created, 14,055 of them affordable. A total of £162 million in funding will be contributed by the Mayor to the new Housing Zones as are a collaborative effort between the Greater London Authority, the government and local boroughs to streamline approval processes and fast track development in areas where it may not otherwise happen. Included in the new Housing Zones will be two brand new rail stations, a large new park, new primary schools, and new retail and entertainment precincts. They will revitalise currently disused brownfield sites and turn them into neighbourhoods where Londoners will work, live and visit. ‘Housing Zones will provide the swift delivery of new homes for Londoners that is so desperately needed and create entirely new, highly connected urban districts for generations to come,’ said the Mayor of London Boris Johnson. ‘By freeing up empty brownfield sites from lengthy approval processes and providing a funding boost, we can ensure new housing capacity is created in areas where it might never otherwise have happened,’ he explained, adding that the four new zones brings the project within touching distance of the 50,000 new homes target. Rainham and Beam Park Housing Zone in the borough of Havering is one of the biggest development sites at 12 square kilometres, and will include the new Beam Park rail station with 20 minute access into the heart of London. The Housing Zone will include the Beam Park site recently released by the Mayor for development, the largest slab of land that had been in the Mayor's portfolio. The council plans on creating a new garden suburb from former industrial land with 3,457 new homes, 941 of them affordable. ‘This is incredibly exciting news for the residents in Rainham, and the Borough as a whole. The changes this funding will allow us to implement will have a lasting positive impact on their lives,’ said Havering council leader Roger Ramsey. Meridian Water Housing Zone in the borough of Enfield will build 3,650 new homes in a development designed to complement the riverside canal district it is situated on, of which 1,460 be affordable. The Housing Zone will contribute to the development of Meridian Water station, currently Angel Road station, which will have four trains an hour running into central London by March 2018 under the Stratford to Angel Road rail scheme. In early June a procurement process was launched to secure a master developer for the project. The Ilford Town Centre Housing Zone in the borough of Redbridge will capitalise on the arrival of Crossrail to the area by… Continue reading
Regulation and tax set to impact property markets in Asia Pacific region
Monetary policy, tax, regulations and underlying fundamental drivers such as demographics and urbanisation will have a significant impact on property markets in the Asia Pacific region, according to the latest real estate analysis. The region’s economies are moving at multiple speeds with differing drivers and local dynamics, producing quite a wide range of housing market performance indicator, says the Asia Pacific residential review from international real estate firm Knight Frank. ‘Economic growth can certainly be a reasonable lead indicator as to which way housing markets will go,’ said Nicholas Holt, head of research for the Asia Pacific region. He also pointed out that despite facing many headwinds, the International Monetary Fund is forecasting stronger growth in 2015 for six out of the 11 major countries in the region. ‘While this should be a positive sign for home owners or investors, the reality is that in many cases there has been a divergence between short term economic growth and market performance,’ he added. The report reveals that since last November, the People’s Bank of China has cut interest rates three times, contributing to the first month on month increase in house prices in May this year, after falling for 12 consecutive months. Other countries such Australia, India and South Korea are also pursuing expansionary monetary policy. It points out that with further interest rate rises inevitable in the slow moving market of Singapore, cooling measures introduced previously could start to be reviewed by the government. China and New Zealand have already seen similar moves. And the likely extension of luxury tax and introduction of a super luxury tax have already started to impact market behaviours in Indonesia, as has the announcement of a new capital gains tax scheme in Taiwan. The report also points out that it is not just China that has seen the increasing influence of policy interventions in residential markets, whether fiscal, monetary or regulatory. In New Zealand, for example, authorities have stepped in over recent years. ‘Perhaps now more than ever, property market observers are looking to policy makers, whether Janet Yellen at the Federal Reserve, the Singapore government, the Reserve Bank of Australia, the People’s Bank of China or the Japanese government for clues about how markets will perform. We can expect more of this going forward,’ explained Holt. In Hong Kong the supply of land for development has affected the property market and the report says that until supply catches up with demand the upward pressure on prices will continue in what is already one of the costliest property markets in the world. Indeed, house prices in Hong Kong have continues to defy the ongoing cooling measures by rising 8.4% in the 12 months to the first quarter of 2015, the highest annual price growth in the overall market since the second quarter of 2013. The report suggests that the Reserve Bank of Australia’s recent decision to hold interest rates followed two 25 basis point cuts in the official… Continue reading
