Tag Archives: portugal
Scottish property industry wants more details of extra second home tax
There are calls in Scotland for further details on the extra 3% stamp duty tax to be made public as the introduction of the additional rates on top of LBTT is creating confusion. Towards the end of last year Scottish Finance Minister John Swinney announced as part of the Scottish budget that second homes, including buy to let, would face an additional 3% levy on top of the Land and Buildings Transaction Tax from April 2016. However, despite the introduction of the new tax being just months away there remains much confusion amongst landlords as well as buyers and vendors generally. The intention of the levy is to charge a higher rate on each band of LBTT if at the end of the day of the transaction an individual owns two or more residential properties. However, the higher rate will not be charged if the purchaser is replacing their main residences. The Scottish Government are keen to ensure that there are sufficient affordable opportunities for first time buyers to enter the property market but the surcharge is a blow to landlords who have also recently suffered the loss of the buy to let tax relief. George Lorimer, partner at CKD Galbraith, believes that the new levy will undoubtedly lead to a rush of buy to let purchasers looking to beat the April deadline, then to an anticipated drop in sale prices post April with sellers likely to be the ones bearing the lion’s share of the additional costs of the levy. ‘However, given the complete lack of real detail currently available about the new tax, those who do rush to buy or sell property before April are doing so without knowing exactly what the new rules will be. There are many anomalies requiring clarity but the silence from the Scottish Government has been deafening and there is little time left to debate the details of the new tax,’ he said. ‘Specific questions need to be answered on issues such as property owned by married couples and civil partners, second homes outside of the UK and also the logistics of joint purchases, just to name a few. Whilst as a firm we are well placed to advise our clients and those thinking of selling or buying before April, more information is urgently required to allow for informed decisions,’ he explained. The surcharge is also expected to impact tenants as rents increases to cover costs or less well-off landlords decide to sell rental property. Bob Cherry, partner at CKD Galbraith, pointed out that the new levy will have implications for current landlords looking to sell as well as act as yet another deterrent to would be landlords thinking about the market as an investment opportunity. ‘This measure, like the LBTT rises introduced earlier this year, is also a wealth tax on owners as buyers of buy to lets will seek to pass on the extra purchase costs by reducing the price they are prepared to… Continue reading
House prices in England and Wales up 300% in last two decades
House prices have increased by nearly 300% in the last 20 years in England and Wales with the average sale price rising from £66,110 in 1995 to £262,847 today. But new analysis from international real estate adviser, Savills, has found significant regional and local variations in house in price growth. Looking at 20 years of Land Registry data, available for the first time, Savills research has found the top 5% of wards across England and Wales have seen property prices increase by 538%, from £108,032 in 1995 to £689,649 in 2015. In contrast, the 5% of wards that have shown the smallest increase have seen sales prices rise by 148% over the same period, from £46,819 in 1995 to £115,954 to 2015. The report explains that the distribution of growth across all wards, broken down between regions, demonstrates not only the growing house price divide between regions, but how wide the variation of growth is at a local level. In London alone, growth varies from a 938% increase in Oval, Lambeth to a rise of 218% in Erith, Bexley. Only 5.5% of wards now have an average sale price less than £100,000, compared to 88% of all wards in 1995 and are predominately former industrial locations in the north of England and Wales. Meanwhile, there are now 66 wards with an average sale price of over £1 million, 53 of which are located in London, while in 1995 just eight wards had an average sale price of more than £300,000. ‘The 20 biggest risers are dominated by central London markets, though they also include some areas that have seen substantial gentrification over the period. This includes Queens Park and Kensal Green in Brent, East Dulwich and Cathedrals in Southwark and Stoke Newington Central and Dalston in Hackney,’ said Lucian Cook, head of Savills UK residential research. ‘Looking at the top 30 performers outside London, Brighton and Hove, North Oxford and Cambridge all feature prominently, as well as a few coastal markets in Norfolk and Cornwall and prime commuter wards such as Harpenden South, Denham North and Luffield Abbey,’ he pointed out. ‘At the other end of the scale, areas that have seen the smallest growth contain a number of wards in Blackpool and Middlesbrough,’ he added. Continue reading
A year of above average leasing predicted for central London office market
The central London office market is set to experience another year of above average leasing and investment activity in 2016, according to a new report. However, some 22 million square feet of space could be needed in the next five years, says the analysis from international real estate advisor Savills. Low vacancy rates will help prime rents to climb, although a lack of new buildings capable of demanding the highest rents is likely to lead to topmost rents stabilising over the course of the year, the report explains. Whilst the gap between average prime City and West End rents continues to widen at £74.15 per square feet and £106.98 per square feet respectively, elsewhere there has been a marked convergence of rents on average Grade A/B office accommodation across Central London. This is likely to mean less movement of occupiers from West to East London or from core to fringe locations. Longer term, Savills predicts that population and economic growth, combined with lease expiries and building obsolescence, could lead to 22 million square feet of additional space being required in London over the next five years. Part of this demand will be serviced by four consecutive years of above average levels of completions in both the City and West End markets, although 21% of space in the City has been pre-let, and 15% in the West End. In the investment market, non-domestic investors attracted by London office’s relative stability and strong comparative returns will continue to drive demand, with 2016 set to be above average in terms of investment volumes. Despite stock market volatility and concerns over a slowdown in the Chinese economy those international investors who have been canvassed continue to identity London as a core focus for their future direct investment activity, with Savills predicting further capital flows from the Middle East, China and North America. Notwithstanding the continued appetite from overseas, Savills expects the market to consolidate around an appetite for core plus and value-add opportunities and therefore a continued sharpening of prime yields, currently at 3% in the City and 4% in the West End, is unlikely to continue. Volumes may well fall as the market becomes more hesitant in the lead up to the outcome of a Brexit referendum. ‘We predict that the Central London office markets will see above average take-up, rental growth and investment volumes in 2016, but these increases will not be as notable as they have been in recent years,’ said Mat Oakley, head of commercial research at Savills. ‘We don’t foresee that an increase in the Bank of England’s base rate will have an impact on yields whilst rents continue to rise. As with the investment market, the leasing market may slow due to external factors such as further ripples from China’s slowdown and a drop in business confidence in anticipation of a Brexit referendum,’ he added. Continue reading
