Tag Archives: investment
New home building in UK needs to address the needs of older people too, says report
New home building in the UK to cope with the country’s chronic shortage of housing should not concentrate just on the needs of first time buyers and younger people, according to a new report A new report from the International Longevity Centre UK (ILC-UK) whilst the Government’s focus on first time buyers is understandable faster progress in helping these younger generations get on the housing ladder would be made if more energy was put into meeting the housing needs and aspirations of their parents and grandparents. The report calls for more housing to be built by local authorities, a wider range of commissioners of new house building, better rental offers for older people with secure tenancies, more shared ownership options for older people and overall greater choice for older people in general needs housing. The authors argue that the lack of new housing supply has contributed to the rampant increase in house prices in recent decades and this in turn has resulted in housing wealth becoming the principal driver of inequality in the UK. It suggests that providing a better choice of options for older people looking to downsize would unlock substantial equity that could be made available to invest in new homes whilst releasing existing family homes into the market. ‘Finding ways in which local authorities can promote, support, finance and commission new homes will be critical to achieve the Government’s house building targets and in ensuring greater commissioning of homes suitable for older people,’ said Sir Michael Lyons, co-author of the report. ‘We need a better rental offer with secure tenancies and confidence of rent stability to encourage older home owners looking to release capital to provide an income in later years and to help fund housing for their children and grandchildren,’ he explained. ‘The increased opportunities for self-build, of self commissioning that government is promoting could be an attractive option for those who have equity but feel there is a lack of choice to meet their aspirations or those for whom retirement settings do not appeal,’ he added. According to Ben Franklin, head of economics of ageing at ILC-UK, supporting the country’s current and future housing needs must be a key pillar of a new social contract between the state and the individual. ‘For more than a decade we have simply not been building sufficient homes to meet demand. This is having a detrimental impact on the livelihoods and wellbeing of people across all ages,’ he said. ‘Unfortunately this is not going to change any time soon unless we make some radical changes to the system. The UK’s population is growing and is ageing which will only exacerbate the current crisis. In this context, supporting the housing needs of older people can be one important component of a strategy to revitalise the nation’s housing,’ he added. Continue reading
Foreign buyers face new 15% extra property tax in certain parts of Vancouver
A new tax for foreign property buyers is being introduced in British Columbia in Canada in an attempt to cool escalating house prices. The 15% foreign buyer tax will come into effect on 02 August 2016 at a time when prices in the province’s capital city Vancouver are escalating. Indeed, the latest global cities index from international real estate firm Knight Frank shows that prices in the city have increased by 17.3% in the mainstream market and by 26.3% in the prime market in the year to March 2016. Policymakers have been looking at ways to cool price inflation in recent months and the new tax will relate to residential purchases in Metro Vancouver, an area that extends from Bowen Island to Maple Ridge/Langley Township. According to Knight Frank, in real terms the new tax will result in an extra $300,000 in property transfer tax based on a property bought for $2 million by a foreign citizen. This figure will rise to $1.5 million for a $10 million home. The latest government data shows foreign buyers, mainly from China, purchased more than $1 billion worth of property in British Colombia between 10 June 2016 and 14 July 2016 of which around 86% was located in the Lower Mainland. The foreign buyer tax will also apply to corporations that purchase residential real estate and the British Columbia Government has the power to examine the citizenship status of directors and the beneficiaries of corporate profits in deciding whether to add taxes. According to the Finance Minister, the resulting revenue from the new tax will be spent on housing affordability projects. However, Knight Frank points out that some loopholes exist and details as to how it will be policed remain unclear. For example, the tax itself relies on buyers self reporting their nationality and providing a social insurance number, backed up by new auditing procedures and penalties. However, as yet it is unclear whether a resident with citizenship could buy a property by proxy for a family member living abroad. ‘There is no doubt that the new law will cool sales volumes and prices as foreign buyers absorb the additional cost implications. It is worth noting that the planned legislation also allows the BC cabinet to alter the foreign tax rate by between 10% and 20% at a later date and expand it to outside the Lower Mainland,’ the firm explains. ‘The legislature was originally recalled to discuss the merits of a tax on vacant homes, whilst the legislation provides an enabling power for such a measure, it is unclear at this stage whether the Government will go ahead with such a move,’ it adds. Vancouver isn’t the only city where policy makers are trying to stem the flow of speculative capital into their local housing market. Hong Kong, Singapore, Australia, Switzerland and Mexico have all taken steps either by imposing additional taxes or stamp duties, introducing a one off fee or restricting where or what type of property… Continue reading
Rents up across most of UK, but down in Wales, latest index shows
Rents in the British private rental sector increased by 2.4% in the 12 months to June 2016, down from 2.5% when compared with the year to May 2016, the latest index shows. Rents increased by 2.5% in England and by 0.1% in Scotland but fell by 0.1% in Wales, according to the data from the Office of National Statistics (ONS). Rental prices increased in all the English regions over the year to June 2016, with rental prices increasing the most in the South East at 3.4%, but overall when London is excluded rents grew by 2%. The index report reveals that since January 2011 England rental prices have increased more than those of Wales and Scotland. The annual rate of change in Wales continues to be well below that of England and the Great Britain average. Meanwhile, rental growth in Scotland has gradually slowed to 0.1% in the year to June 2016, from a high of 2.1% in the year to June 2015. Rental prices in England show three distinct periods; increasing from January 2005 until February 2009, decreasing from July 2009 to February 2010, and increasing from May 2010 onwards. When London is excluded, England shows a similar pattern but with slower rental price increases from around the end of 2010 and since the beginning of 2012, English rental prices have shown annual increases ranging between 1.4% and 3% year on year. The largest annual rental price increases were in the South East with growth of 3.4%, unchanged from May 2016, followed by the East of England up 3.1%, down from 3.2% in May 2016 and London up 3%, down from 3.3%. The lowest annual rental price increases were in the North East at 0.8% and the North West at 1.2%, both unchanged when compared with May 2016 and Yorkshire and The Humber at 1.3%, up from 1.2% over the same period. Looking at data from the UK House Price Index over a longer period shows residential house price growth has typically been stronger than rental price growth for a number of years, with an average 12 month rate of house price inflation between January 2013 and May 2016 of 5.9%, compared with 2.1% for rental prices. The report suggests that inflation in the rental market is likely to have been caused by demand in the market outpacing supply. On the demand side, the Royal Institute of Chartered Surveyors (RICS) reported an increase in demand in June in their residential market survey, however, demand from prospective tenants decreased marginally in May according to the Association of Residential Letting Agents (ARLA). On the supply side, RICS reported that new landlord instructions fell slightly in June and ARLA reported that the supply of rental stock fell in May 2016 and was lower than in May last year. The report also suggest that with the UK economy… Continue reading
