Tag Archives: middle-east
Landlord campaigners should know soon if tax challenge can go ahead
The legal campaign to overturn the proposed UK Government’s decision to phase out the tax relief that residential landlords can currently claim on their mortgages will know next month if its challenge can be taken further. There will be a hearing around the end of the month to determine whether or not there will be a judicial review of the move to reduce the tax relief from 2017 to 2020 until it meets the basic tax rate. Landlords and organisations have warned it could put off new landlords coming into the private rent sector and also hit existing landlords who will have little choice but to pass on the extra cost to their tenants in the form of higher rents. Landlord campaigners Steve Bolton and Chris Cooper said that they also have a meeting with the new housing minister Gavin Barwell on 09 September when the issue will be discussed. ‘We will obviously be raising our serious concerns about the impact, making him aware of our legal challenge and doing the best job we can to help him become a supporter of our cause within Government,’ they said. It is not the only tax change landlords have faced recently. Earlier this year a new 3% extra stamp duty was levied on the purchase of additional properties which included buy to let investments. The Scottish Association of Landlords (SAL) and the Residential Landlords Association (RLA) have both warned that these tax changes threaten to increase costs, making it easier for irresponsible landlords to provide sub-standard housing to tenants and threaten housing supply for those who believe renting is the most suitable option for them. The Scottish Association of Landlords (SAL), along with the Residential Landlords Association (RLA) south of the border, have launched a joint campaign to convince the new Chancellor of the Exchequer to reverse or amend tax changes in his Autumn Statement expected later this the year. They pointed out that a recent YouGov survey for the Council of Mortgage Lenders suggested that 34% of landlords will reduce their investment in the private rented sector as a consequence of these tax changes. Alongside this, the Scottish Government has introduced a 3% levy on the Land and Buildings Transaction Tax (LBTT) for those buying additional properties, including properties to rent out. ‘We know from our regular branch meetings around Scotland that landlords are already seeing increased costs as a result of tax changes. As well as impacting on individual landlords, we are concerned this could make it harder to tackle the current housing crisis by making it more difficult to attract much needed investment,’ said John Blackwood, SAL chief executive. ‘With the uncertain investment environment that has been created by the Brexit vote, at least in the short term, the last thing anyone in the housing sector needs is tax rises which will only make things worse,’ he explained. ‘Furthermore,… Continue reading
Office rents in Europe saw strongest growth of last five years in second quarter of 2016
Rents on prime office assets across Europe grew by 1.5% quarter on quarter in the second quarter of 2016 compared to 0.7% in the previous quarter, the strongest increase in the past five years. Rents in Europe outpaced the Americas and Asia Pacific regions with Stockholm recording the strongest growth in region of 9.4% followed by Berlin with growth of 6.3%. The data from real estate firm JLL also shows that Paris saw growth of 3.4% as limited new supply and more robust take-up pushed up prime rents for the fourth consecutive quarter while in Southern Europe, the momentum in the market recovery has continued in Milan with rents up 2% and in Barcelona up 3.7% and Madrid up 0.9%. Following the UK’s decision to leave the European Union headline rents have so far remained unchanged in London compared to the first quarter of 2016. The report says that rent free periods may soften as occupiers look to negotiate more flexible terms with greater lease flexibility. But the Brexit vote has so far had little effect on rental growth outside the UK. ‘Office demand is proving resilient in many of the world's dominant commercial real estate markets despite increased political and economic uncertainty which is leading to corporate occupiers striking a more cautious tone,’ said Jeremy Kelly, director in global research programmes at JLL. ‘Underlying market fundamentals are sound and corporate demand is holding up well, notably in continental Europe,’ he pointed out and added that looking to the second half of the year, a period of steady rental increases for prime European offices is anticipated. Indeed JLL is predicting rental growth of 2.5% to 3% in Western Europe which will outperform the 10 year average over the next few years. Stockholm and Madrid are expected to be the region's high performers over 2016. ‘In London, rents and incentives may come under pressure in certain sections of the market, although low vacancy rates coupled with an increasingly diverse occupier base will act to cushion the impact of weaker sentiment,’ said Jon Neale, head of UK research at JLL. ‘Our priority over the second half of the year will be to monitor occupier activity and other developments, although it is unlikely that any real conclusions over longer term market implications can be made until the nature of Brexit becomes more apparent as we move into 2017,’ he explained. ‘For the time being, however, our research indicates that the vast majority of occupier deals in progress at the time of the referendum are still continuing as planned,’ he added. Continue reading
Demand for rural land in the UK fell sharply in first half of 2016
Demand in the UK’s rural land market fell sharply in the first half of 2016 while supply continued to increase, albeit very modestly, the latest industry survey shows. This rise in supply relative to demand pushed 12 month price expectations deeper into negative territory with a net balance of 49% of contributors now expecting prices to fall, across all farm types, over the coming year. The data from the RICS/RAE rural land market survey also shows that yields on investment land drifted slightly down, to 1.6% and anecdotal evidence from respondents suggests that increased uncertainty due to the Brexit vote and resulting confusion over the future of CAP payments has weighed on the market. This has compounded the already subdued demand due to low commodity prices, the report points out and while commercial farmland continues to experience the worst of the current downturn with demand falling most substantially, blocks with a residential component also saw a sharp contraction in buyer interest. Indeed, some 19% more contributors reported a fall rather than a rise. Likewise, while expectations for prices at the 12 month horizon are slightly worse for commercial farmland, the outlook for mixed residential farmland turned markedly more negative in the first six months of the year with a net balance of 42% of surveyors expecting prices to fall rather than rise over the next year. The survey’s transaction based measure of farmland prices, which includes a residential component where its value is estimated to be less than 50% of total, edged down in the latest period and now stands at £10,750 per acre. Meanwhile, the survey’s opinion based measure, a hypothetical estimate by surveyors of the price of bare land, fell by 4% between the first half of 2016 and the second half of last year. Since 2015, the difference between the two measures has widened somewhat and RICS says that this may reflect several influences but the fact that the transaction based measure contains some residential element is probably a significant factor at the moment, given that residential prices in most parts have continued to rise steadily over the past year. According to surveyors, average arable land rents fell by 8.8% in the first half of the year and by 3.1% over the year as a whole. Average pasture land rents fell by 6.7% and by 7.3% respectively. The buyer profile has remained broadly unchanged over recent years with individual farmers still representing around 60% of purchases. Meanwhile lifestyle buyers compose around a quarter of the demand. Continue reading
