Tag Archives: taxes
No good news for buy to let landlords in UK Budget
There was little good news for residential landlords in the UK’s Budget announcement with the Chancellor of the Exchequer adding to their woes by excluding them from a tax giveaway. Just weeks before landlords in the growing buy to let sector face an extra 3% stamp duty charge under a change to tax on additional homes, George Osborne announced they will be excluded from Capital Gains Tax change. ‘Buy to let investors could be forgiven for being completely paranoid. On this evidence, the Chancellor really has got it in for them and has excluded buy to letters from a huge CGT giveaway,’ said Jamie Morrison, private clients partner at the chartered accountants HW Fisher & Company. ‘With more incentives to help savers and first time buyers get on the property ladder, buy to let owners have once again been cast in the role of fall guy,’ he added. David Cox, managing director of the Association of Residential Letting Agents (ARLA), pointed out that this is now the third Budget which directly attacks landlords. ‘The sector has been punitively taxed, with stamp duty on buy to let properties, mortgage interest relief and now capital gains tax changes. It’s an outright assault on the sector,’ he said. ‘Every other sector has been offered a tax break yet there is nothing here to help the private rented sector, including landlords and most importantly tenants, who will see rent costs rise to subsidise the taxes that landlords pay on property. The government talks about wanting to help the younger generation get onto the property ladder, but with the changes announced today the supply of available property is bound to decrease, and as a result rents will rise,’ he explained. ‘In November, when Osborne announced an increase in stamp duty tax on buy to let properties, we described this as a catastrophic move. The news that larger investors will also have to pay the tax is even worse. Professional landlords, those who typically own more than 15 properties, play a vital role in providing rental stock to the market, and providing the army of renters we have in this country with housing,’ Cox added. ‘Our members forecast that the supply of buy to let properties will dwindle when the new tax comes in to effect, and this news means that supply will fall even faster and harder. We’re already in a position where demand out-strips supply and as supply falls, rent costs rise, meaning the goal of home ownership falls even further out of reach for most of the country’s renters,’ he concluded. Richard Lambert, chief executive officer of the National landlords Association (NLA), said it is clear that the Chancellor does not regard ordinary people putting their own money into providing homes as worthwhile. ‘The steady upward ratchet of taxation on landlords over the past year shows that George Osborne is determined to bear down on the private rented sector, but he still depends on… Continue reading
Cornwall is top spot for holiday homes in England and Wales
Some 165,000 people in England and Wales have holiday homes with Cornwall the most popular location for this type of second property, new research shows. Indeed, the county in the south west of England has over 10,000 holiday properties, according to a new analysis from Direct Line’s SELECT Premier Insurance. That means Cornwall has 6% of the nation’s holiday homes and according to estate agents its 300 mile coastline makes it the top holiday home hotspot. In second place is Gwynedd in Wales with 7,784 or 4.7% of holiday homes with its proximity to Snowdonia National Park adding to its attraction, followed by North Norfolk with its sandy beaches and salt marshes, which has 4,842 or 2.9% of holiday homes. South Lakeland with 4,684 holiday homes, East Lindsey with 4,472, Pembrokeshire with 4,310, the East Rising of Yorkshire with 4,059, South Hams with 3,738, Scarborough with 3,687 and Kings’ Lynn and West Norfolk with 3,539 complete the top 10. Across England and Wales there are almost 1.6 million people who have a second property in a different area to where they live permanently and 11% of these are used as holiday homes with the remainder being used for purposes such as work, or accommodation for student children. According to Nick Brabham, head of SELECT Premier Insurance, holiday homes are very valuable to owners as they are often a place to relax and spend quality time with loved ones. ‘This time is often limited, which means it is essential to keep the property and its contents in top condition all year round,’ he added. Peter Olivey a partner at Cornish based estate agents Cole, Rayment & White in Padstow, explained that Cornwall ticks a number of important boxes for second home owners with its coastal location and abundance of activities. ‘It’s a true holiday haven without the hassle or cost of going abroad. The local property market here is competitive but with a number of new developments springing up and mortgage rates much lower than they have been, there’s still plenty of opportunity for prospective buyers,’ he said. Continue reading
Consumer confidence in UK housing market outlook rebounds
While house price growth continued to slow in March in the UK, consumer confidence in the outlook for the housing market has rebounded to its highest level since July last year, new research shows. Consumer confidence in the outlook for the housing market has bounced back to a net balance of +64 in March from +60 in February, according to the latest quarterly Halifax Housing Market Confidence Tracker as measured by Ipsos MORI. Conversely, house prices increases have slowed over the same period and in the three months to March this year house prices were 8.1% higher than in the same three months a year earlier, compared to 8.5% in January 2015, and 10.2% in July 2014. As to just how confident consumers are in the outlook for the housing market over the next 12 months some 33% are expecting the average property price to be higher by up to 5%, while 25% anticipate increases of between 5% and 10%. ‘We’ve seen a strong start to the year in terms of the net sentiment regarding the outlook for the housing market, and this has translated into an increase in transaction volumes. This increase in optimism is likely to be the result of a combination of factors, including the improving economic figures, greater numbers of higher loan to value mortgages, and extremely competitive mortgage rates,’ said Craig McKinlay, Halifax mortgages director. There has been an increase in the net proportion of consumers who believe mortgage interest rates will be higher in 12 months’ time at +41 compared to +35 in February. Nevertheless, only 12% spontaneously cited concerns about interest rate rises as one of the main barriers to being able to buy a property, down from 15% in the first quarter of 2014. The main perceived barriers to homeownership are the ability to raise enough deposit for 61% while 44% have concerns about job security). A year ago, 60% and 51% respectively identified these as among the main barriers. ‘The results highlight that an increasing number of consumers believe interest rates will begin to rise in the next 12 months, but at the same time it is falling as a perceived barrier to homeownership,’ McKinlay explained. ‘This is perhaps a result of rising incomes and the current low mortgages rates. The fact that consumers’ ability to raise a deposit remains the greatest perceived barrier to home ownership shows there is more work to be done in terms of letting people know what support is now available,’ he added. Overall a net +33 of consumers think the next 12 months will be a good time to sell, compared to +24 at end of December 2014. This is the highest score on this measure since the survey’s inception in April 2011. At the same time the proportion who believes it is now a good time to buy has slumped from +26 at end of December 2014 to +21 as at end of March 2015. Regionally, house price optimism… Continue reading
