Tag Archives: house
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
First UK house price estimates published ahead of new national index in June
The first estimates for the new single official UK House Price Index which will be first published in its entirety in June 2016, have been published. The new improved index has been developed jointly with other official producers of house price statistics following a review by the National Statistician, uses data from, amongst others, the Land Registry and Council of Mortgage Lenders. By using these comprehensive datasets together, as well as by employing the best internationally agreed methods, the new UK HPI aims to give the best and most detailed picture of the UK housing market. For the most recent period, December 2011, the new UK HPI shows an average price level of £185,000 for England and Wales. This is lower than the price recorded by the current Office of National Statistics index for England at £222,000 for the same period. But it is above the equivalent price levels recorded by the Land Registry for England and Wales at £157,000, the Halifax for the UK at £157,000 and Nationwide for the UK at £163,000. The main reason for the decrease in price levels from the ONS index to the new UK index is the use of the geometric mean, which reduces the impact of very high value properties on the headline data. Over the period from 2003 to 2011, which is the longest comparable period available, the average annual growth is 5.2% for the ONS index for England, 4.6% for the Land Registry index for England and Wales, 4.7% for the Halifax for the UK, 5.3% for Nationwide for the UK and 6.1% for the new UK index for England and Wales. The inclusion of cash sales and improved weights are both contributing to the increased growth seen in the new UK index, according to ONS statistician Chris Jenkins. ‘By combing different data sets and using the best internationally agreed methods, the new UK HPI will give the best possible picture of the changing UK property market,’ he explained. ‘For the first time, consistent high quality data will be available for both national and local areas, helping policy makers to make better decisions,’ he added. Continue reading
More US housing markets were less affordable in first quarter of 2016
More housing markets in the United States were less affordable than their historically normal levels in the first quarter of 2016 than a year ago, new research shows. Some 9% of county real estate market were less affordable compared with 2% a year ago, according to the analysis of median home prices from publicly recorded sales deed data collected by RealtyTrac and average wage data from the US Bureau of Labour Statistics. The affordability index was based on the percentage of average wages needed to make monthly house payments on a median priced home with a 30 year fixed rate and a 3% down payment, including property taxes and insurance Out of the 456 counties analysed in the report, some 43 had an affordability index below 100 in the first quarter of 2016, meaning buying a home was less affordable than the historically normal level for that county going back to the first quarter of 2005. That was up from 10 counties in the first quarter of 2015. At the peak of the housing bubble in the second quarter of 2006 some 454 of the 456 counties analysed, more than 99%, were less affordable than their historic norms. In the first quarter of 2012, when median home prices bottomed out nationally, only two counties out of the 456 analysed, less than 0.5%, exceeded their historically normal affordability levels. ‘While the vast majority of housing markets are still affordable by their own historic standards, home prices are floating out of reach for average wage earners in a growing number of U.S. housing markets,’ said Daren Blomquist, senior vice president at RealtyTrac. ‘The recent drop in interest rates has helped to soften the blow of high flying price appreciation in some markets, but the affordability equation could change quickly if interest rates trend higher and home prices continue to rise faster than wages,’ he explained. The top 20 county housing markets least affordable in the first quarter of 2016 compared to their historic affordability norms included counties in Denver, New York City, Omaha, Nebraska, Austin, Dallas, San Francisco and St. Louis. The five most populated county housing markets less affordable than their historic norms were Kings County, New York Brooklyn, Dallas County, New York County, New York Manhattan, Alameda County, California in the San Francisco metro area, Oakland County, and Michigan in the Detroit metro area. The top 20 county housing markets most affordable in the first quarter of 2016 compared to their historic affordability norms included counties in Boston, Baltimore, Birmingham Alabama, Providence, Rhode Island and Chicago. The five most populated county housing markets still more affordable than their historic norms were Los Angeles County, Cook County, Chicago, Harris County Texas, Maricopa County Arizona and San Diego County. Nationwide in the first quarter of 2016, the average wage earner needed to spend 30.2% of monthly wages to make monthly mortgage payments including property taxes and insurance on a median priced home at $199,000, up… Continue reading
