Tag Archives: taxes
US home sales up to highest rate for 18 months, latest data shows
Existing home sales in the United States jumped in March to their highest annual rate in 18 months, while unsold inventory showed needed improvement, according to the latest index. Data from the National Association of Realtors shows that this growth was led by the Midwest, but all major regions experienced strong sales gains in March and are above their year on year sales pace. Total existing home sales, which are completed transactions that include single family homes, town homes, condominiums and co-ops, increased 6.1% to a seasonally adjusted annual rate of 5.19 million in March from 4.89 million in February, the highest annual rate since September 2013. Sales have increased year on year for six consecutive months and are now 10.4% above a year ago, the highest annual increase since August 2013. March's sales increase was the largest monthly increase since December 2010. According to Lawrence Yun, NAR chief economist, the housing market appears to be off to an encouraging start this spring. ‘After a quiet start to the year, sales activity picked up greatly throughout the country in March,’ he said. ‘The combination of low interest rates and the ongoing stability in the job market is improving buyer confidence and finally releasing some of the sizable pent-up demand that accumulated in recent years,’ he explained. Prices are also climbing steadily. The median existing home price for all housing types in March was $212,100, which is 7.8% above March 2014. This marks the 37th consecutive month of year on year price gains and the largest since February 2014 when it was 8.8%. ‘For sales to build upon their current pace, home owners will increasingly need to be confident in their ability to sell their home while having enough time and choices to upgrade or downsize. More listings and new home construction are still needed to tame price growth and provide more opportunity for first-time buyers to enter the market,’ said Yun. The percent share of first time buyers was 30% in March, marking the third time since last March that the first time buyer share was at or above 30%. First time buyers represented 29% of all buyers last month compared to 30% in March 2014. All cash sales were 24% of transactions in March, down from 26% in February and down considerably from a year ago when they were 33%. Individual investors, who account for many cash sales, purchased 14% of homes in March, unchanged from last month and down from 17% in March 2014. Some 70% of investors paid cash in March. Distressed sales, that is foreclosures and short sales, amounted to 10% of sales in March, down from 11% in February and 14% a year ago. Some 7% of March sales were foreclosures and 3% were short sales. Foreclosures sold for an average discount of 16% below market value in March, similar to the 17% recorded in in February while short sales were also discounted 16%, up from 15% in February. Properties… Continue reading
Election uncertainty and higher taxes affecting prime London property market
Higher taxes and election uncertainty have put the brakes on prime London house prices which fell by 0.5% in the first quarter of 2015, new research shows. This follows an average 2.6% downward price adjustment in the final quarter of 2014 that was triggered by the stamp duty reform announced in December’s Autumn Statement, according to the analysis by real estate firm Savills. It means that the 12 month rolling average for house price growth in the prime London market has now slipped into negative territory. ‘As we forecast in November, uncertainty regarding the general election and the potential for further taxation of high value property have contributed to a subdued market in the first part of 2015,’ the report explains. ‘The prime central London housing markets, that have been most affected by increased stamp duty charges, are looking fully taxed. This has meant sellers are typically having to factor in price adjustments equivalent to the stamp duty increase. Consequently, in central London values are down 4.3% year on year,’ it adds. The study shows that the markets of prime south west London have been similarly, but less significantly, affected. Buyers have become increasingly aware of the high cost of moving, which has tempered demand in the higher value parts of that market. By contrast, the markets of Islington, Wapping and Canary Wharf continue to show positive annual growth, despite a general sentiment-led easing in values in the past six months. ‘In part, this reflects the fact that lower tiers of the prime market have remained the most robust, with the market below £1 million generally benefiting from the stamp duty changes and unaffected by the political focus on taxation,’ Savills says. ‘Interestingly, the softening in the London markets has corresponded with a pick-up in the number of Londoners circling the country market. Prices of homes below the £2 million threshold in the prime regional markets beyond London continue to show year-on-year price growth, and rose by 1.1% in the first quarter of the year. However, market activity beyond London is still partly constrained by pre-election caution,’ it points out. ‘While the fundamentals of demand and supply remain sound, the short term outlook for the prime property market is heavily dependent on the extent to which the election brings political certainty and whether the sector is subject to further taxation. Certainty will, at least, allow buyers and sellers alike to take account of the impact of any fiscal change, as the all-important autumn market approaches,’ it adds. Savills is forecasting that prices in the prime London market will rise by 22.7% over the five years to the end of 2019 assuming no further taxation of high value property. In this case there would be a relatively swift bounce back in values as was seen in 1998 and 2002, when price falls in central London were contained to less than 5% and recovered lost ground very quickly thereafter. In the event of a mansion tax, Savills… Continue reading
UK mortgage brokers report impact of rules change a year ago
A quarter of mortgage brokers in the UK say they have experienced a decrease in volumes since new mortgage rules came into being almost a year ago, a new survey shows. The self-employed and retirees are the most difficult to find a mortgage for and mortgage intermediaries are very much divided on the impact of the Mortgage Market Review (MMR) on business volumes. The research by Paragon Mortgages that covers the first quarter of sought to establish the impact of MMR in terms of intermediaries’ business levels as we reach the one year anniversary of the changes coming into force. Of the 200 intermediaries who took part in the survey, 43% said that in their view there had been no change to their business volumes as a result of MMR and 24% said that business had increased. However, some 25% of those surveyed said they had experienced a decrease and only 3% said there has been no change in business. The majority of intermediaries who said they had experienced a decrease reported this had been up to 30% and only 14% said the decrease in business had been any higher. Looking ahead, 15% of intermediaries said they did not know what the long term impacts of the new regulations would be. Intermediaries were also asked which of their customers are now the most difficult to find a mortgage for. Top of the list were the self-employed at 75%, followed by retired customers at 52% and 51% said it was those customers with complex incomes. ‘The research shows is there is still some uncertainty in the market about the long term impact the MMR changes will have on business volumes. This isn’t unexpected, as with any significant change in regulation there will always be a period of adjustment, but it is important the industry monitors this carefully,’ said John Heron, director of Paragon Mortgages. ‘Looking at the feedback from intermediaries on the underserved areas of the market also provides a valuable insight into what lenders could be doing better. We need to recognise that there is no such thing as the average mortgage customer anymore, people have a greater variety of circumstances and we need to be more innovative in order to meet increasingly varied demand from customers,’ he added. Continue reading
