Tag Archives: middle-east
London’s prime property market likely to be attractive regardless of EU vote
The prime property market in London is likely to retain its attractiveness to wealthy international buyers regardless of what happens in the forthcoming referendum on the UK’s membership of the European Union. However, prices may soften after April as there has been a demand from buyers of second homes to complete before a new 3% stamp duty surcharge comes into force on 01 April, according to independent property buying agency Black Brick. However, one immediate impact of the prospect of a Brexit, the term coined for the UK leaving the EU, has been to hit sterling. Camilla Dell, managing partner at Black Brick pointed out that between the end of 2015 and late February, UK currency lost 6% against the dollar and, over 18 months, the currency has slid almost 20% against the greenback. ‘This serves to make UK property more attractive to dollar based buyers. As is so often the case, opportunity is the other side of the coin to crisis and, if you add currency moves to the 7% to 7.5% falls we've seen in prices in Knightsbridge, for example, then prices are more than a quarter lower in dollar terms than they were 18 months ago. It's certainly tempting some overseas buyers back into the market,’ she explained. ‘London is going to retain its attractiveness to wealthy international buyers regardless of whether the UK remains in the EU. Its cultural attractions, geographic location, legal system, and concentration of talent mean that there will always be demand for prime central London property,’ said Dell. The firm has seen that with just weeks to go before the introduction of a 3% hike in stamp duty payable on buy to let and second home acquisitions there is a rush among buyers to complete transactions before 01 April. ‘Certainly, for buyers who have had offers accepted, or who have exchanged, there's still time and obvious motivation to get deals signed and sealed before the tax rise. However, we should sound a note of warning as people yet to find the right buy to let investment should weigh up the costs and benefits of trying to rush through deals this late in the day,’ Dell explained. ‘We have seen cases of vendors seeking premiums in exchange for getting transactions done before 01 April, premiums that, in some cases, substantially erode the tax benefit involved. It's also worth bearing in mind that, as with previous increases in stamp duty, we expect this latest rise will feed through into asking prices and would expect prices for buy to let properties to soften after 01 April, as vendors' expectations align themselves with the yields demanded by investors,’ she added. Continue reading
Average property service charges in UK 96% higher on new builds
The average annual property service charge in Britain is £1,863 with the figure 96% higher for new build than older properties at an average of £2,777, new research shows. The survey also shows that some 33% of property management companies have increased service charges in the last two years and they vary between £1.55 per square foot to £7 per square foot. The research by landlord insurance provider, Direct Line for Business, reveals that the average service charge or fees leaseholders pay to cover their share of the overall building maintenance represents more than two months of the average monthly rental income received by landlords, which stands at £906. In addition to this, they will also have other costs to think about such as paying tax on these monies, mortgage payments, management and agency fees and any ground rent fees which are now on average £371 a year for a new build and £327 for a property before 2016. The service charges for new build properties, coming on the market in 2016 are significantly greater than for older dwellings at £2,777, indeed 96% higher than the average for an older property. Service charge levels also vary markedly between developments. One new build development coming onto the market in Croydon in 2016 will see home owners paying £1.55 per square foot in service charges, while a development in Lambeth coming onto the market in 2017 is charging four and a half times more at £7 per square foot. The research report points out that there is an increasing trend for new builds to include amenities such as libraries, 24 hour concierge services, gyms and cinema rooms that is contributing to the increased cost of service charges, but also offers added value for landlords looking to invest in this type of property. Recent moves by developers have seen more private housing stock owned by freeholders subject to service charges. Owners of freehold properties situated on private roads or private estates are being charged for upkeep of roads and gardens. In one example owners of every four-bedroom property situated on a development in Guildford are charged £900 a year for upkeep of the road and communal gardens. ‘Service charges are often a hidden cost, which should be factored in when considering the affordability of a property. In some cases service charges are uncapped and can escalate rapidly. Landlords need to take into account all associated costs when purchasing a property, such as service charges, ground rent and taxes that may impact their rental yield,’ said Nick Breton, head of Direct Line for Business . The method for calculating service charges also varies between developments. In some cases it is a flat rate for all properties, while for others it is determined by the number of bedrooms or the square footage of a property. Service charges usually cover repairs to communal areas of a development such as windows, drainage and the roof…. Continue reading
Poll shows widespread support for UK build to rent sector in Parliament
There is cross party support among British Member of Parliament for the emerging build to rent sector and predictions for growth, according to a new poll. Some 81% of MPs say they support the build to rent sector and the contribution it makes to the UK housing supply while 62% think it will make a higher contribution to housing supply over the next five years compared to current levels. The survey commissioned from ComRes by the British Property Federation (BPF) also found that build to rent has cross-party support, with 71% of Labour MPs in support and 91% of Conservatives. Few MPs think buy to let property will make a higher contribution to housing supply over the next five years, with 27% expecting its contribution to be higher, compared to 41% who expect it to be lower. MPs were somewhat split on social housing and affordable rent, with 26% of MPs expecting to see a lower contribution of social housing and affordable renting, compared to 39% who expect to see a higher contribution over the next five years. The results showed that new MPs are more likely to see this sector as a growth area than long serving MPs at 46% compared to 37%. The BPF estimates that there is at least £30 billion investment ready to enter the build to rent sector, and that it has the potential to deliver significant amounts of additional housing across the UK. The most recent figures from the BPF’s Build to Rent Map show that there are over 37,500 build to rent units with planning permission, under construction or complete across the UK. Most development is concentrated in the capital, where there is more than 20,000 units. ‘The widespread recognition amongst MPs of the build to rent sector is a positive sign it is starting to enter the nation’s housing vocabulary,’ said Ian Fletcher, BPF director of policy for real estate. ]It is also heartening that whilst all political parties are pushing a home ownership agenda, there is recognition amongst MPs that housing supply will come in other welcome forms and our nation requires that if we to get anywhere close to meeting demand,’ he pointed out. ‘This is not a zero-sum game, where tenures are competing, but a quest to deliver far more homes, where it is imperative that other forms of tenures are also encouraged,’ he concluded. Continue reading
