Tag Archives: real-estate
Property sales in Scotland up over 20% month on month due to property tax change
Property sales in Scotland increased by 21% month on month to record the strongest March for homes sales in eight years, the latest index figures show. The rise was partly due to buy to let landlords rushing to beat the extra 3% property tax imposed on additional homes at the beginning of April, according to the index report from Your Move. The data also shows that Midlothian recorded record high house prices and the fastest increase in sales, rising 48% in the first quarter of 2016 year on year while overall property values were up 0.8% month on month in March, the quickest rise since August 2015. However year on year property prices in Scotland are down 9.7% year on year, taking the average house price to £169,379. Christine Campbell, Your Move managing director in Scotland, pointed out that sales in Scotland were not as high as elsewhere in the UK where transactions soared by 60% month on month in March. She said that the more modest increase in Scotland may have been due to John Swinney announcing the property tax changes a month later than George Osborne, so many second home buyers may not have had time to plan their investments. But Scottish sales for the first quarter of this year are still well above the same period in 2015, up 18% year on year and Campbell explained that the construction of new homes in Midlothian has enabled the area to become the only place in Scotland where house prices stand at a record high in March. She also pointed out that while house price growth is down year on year, it’s important to remember that this was due to the huge spike in house prices back in March 2015, following a rush of sales brought forward to avoid the introduction of the LBTT. ‘But with buy to let landlords opting to buy flats and other more affordable properties, this hasn’t translated into too much price turbulence. House prices have generally risen by between 0.01 and 0.8% each month since July 2015, which suggests the current spurt is healthy and sustainable,’ said Campbell. She also pointed out that an uplift in million pound home sales has propelled East Renfrewshire up the rankings in March, with house prices in the area increasing faster than anywhere else in Scotland, up 8.1% month on month. These additional high end home sales mean the area now also has the highest average property value of any area at £257,529. Continue reading
UK property market boosted by buy to let rush in march, official figures show
UK house prices increased by 9% in the year to March 2016, up from 7.6% in the year to February 2016, according to the latest official figures. House price annual inflation was 10.1% in England, 2.1% in Wales, 6.4% in Northern Ireland but fell by 6.1% in Scotland, taking the average price to £292,000, the data from the Office of National Statistics shows. Annual house price increases in England were driven by growth in London of 13%, followed by 12.2% in the South East and 12.1% in the East of England. However, excluding London and the South East, UK house prices increased by 5.9% in the 12 months to March 2016. The data also shows that on a seasonally adjusted basis, average house prices increased by 2.5% between February 2016 and March 2016 and prices paid by first time buyers were 9.7% higher on average than in March 2015. For owner-occupiers prices increased by 8.7% for the same period. This is the final release of the ONS House Price Index (HPI) which will be replaced by the new UK House Price Index from June 2016. Richard Snook, senior economist at PwC, explained that buy to let investors rushing to complete purchases before the 3% stamp duty charge on additional properties came into effect at the beginning of April has affected the figures. ‘This move undoubtedly drove up demand and prices in March and we would expect demand to soften over the next few months as a result. There are no signs of any Brexit related slowdown in this month’s figures, although the underlying trends are masked by the effects of the stamp duty change,’ he said. According to Rob Weaver, director of Investments at property crowdfunding platform Property Partner, the figures also show that the divide between north and south is widening while in London and the south east first time buyers are finding it harder to get on the housing ladder. ‘But with niggling doubts over the imminent EU referendum, we’re likely to see a short term dip in prices until the end of June. Then the fundamentals of strong demand and scant supply, rock bottom interest rates and healthy jobs market should reassert themselves,’ he added. Randeesh Sandhu, chief executive officer of Urban Exposure, the residential development finance provider, also believes that activity is likely to slow down in the coming months following these changes and also in the run up the EU referendum with consumers remaining cautious against the backdrop of a potential Brexit. ‘However, it is clear that demand for housing remains strong and any impact of a Brexit is likely to be a short term trend with activity returning to normal soon after any decision. Therefore a real focus needs to be given to the housing shortages the UK faces,’ he said. ‘In London, the new Mayor, Sadiq Khan, has the opportunity to inject some fresh policies to the London housing market where house prices are particularly steep. However, Sadiq’s plan… Continue reading
Average rental period in UK is 18 months, new research shows
People renting a home in the UK spend an average of 18 months in the property before moving on with vacant properties being filled most quickly in Birmingham, new research has found. Birmingham has the lowest tenant turnover, with renters staying an average of two years and four months in the same property. Cardiff on the other hand, has the highest turnover, with the average property being vacated less than a year after being filled, according to the study by landlord insurance provider Direct Line for Business. Leeds at 12 months and Bristol at 14 months also have a high turnover of tenants, which could prove problematic for local landlords, the report says. The analysis also looked at the average time it takes to fill a vacated property revealing that on average, it takes a landlord 22 days to find a new tenant. This could result in an average loss of £547 in uncollected rent. When calculating the yield for a property, landlords need to take into account this void period and ensure they have sufficient resources to meet any mortgage, ground rent or other charges. Vacant properties in Birmingham are filled the quickest, with a landlord finding a tenant in just 11 days. However, in Liverpool and Aberdeen landlords struggle the most to fill their properties, taking an average of 33 days, to find a suitable candidate. Direct Line for Business's analysis estimates that this gap in rent could cost landlords as much as £761 in Liverpool and £913 in Aberdeen. Even with such a competitive rental market in London, letting agents in the capital claim that it takes 20 days on average to fill a property. With average monthly rents in central London surpassing £2,000 this could amount to a loss of £1,869 in income. The research also found that landlords can't always rely on occupants remaining in a property for the duration of their tenancy agreement, with 9% moving out early. The highest rate of tenancy turnover is in Aberdeen where 19% of tenants leave a property before the end of the tenancy agreement with Leeds and Sheffield both close behind at 13%. ‘This research highlights the pressure landlords are under to replace outgoing tenants in their properties. Vacant properties are obviously a worry for landlords but it's vitally important that they take into account void periods when calculating the affordability of owning a rental property,’ said Nick Breton, head of Direct Line for Business. ‘Staying on top of the on-going changes within the industry can be time-consuming and a battle for landlords and we fully appreciate the challenges they face when it comes to managing their rental properties,’ he added. The business has developed a Mobile Landlord app which can manage up to five properties aimed at alleviating some of the stress. The app can track income, calculate yields, set handy reminders such as when a tenancy agreement may be coming to an end and also keep landlords up to… Continue reading
