Tag Archives: tsi
Existing sales fall in October in the United States
Existing home sales in the United States fell by 3.4% in October to a seasonally adjusted annual rate of 5.36 million from 5.55 million in September, the latest data shows. All four major regions of the country saw no gains in sales. However, despite the decline sales are still 3.9% above a year ago at 5.16 million, the figures from the National Association of Realtors also show. According to Lawrence Yun, NAR chief economist, the sales cooldown in October was likely given the pullback in contract signings in the previous couple of months. ‘New and existing home supply has struggled to improve so far this fall, leading to few choices for buyers and no easement of the ongoing affordability concerns still prevalent in some markets,’ he said. ‘Furthermore, the mixed signals of slowing economic growth and volatility in the financial markets slightly tempered demand and contributed to the decreasing pace of sales,’ he pointed out. ‘As long as solid job creation continues, a gradual easing of credit standards even with moderately higher mortgage rates should support steady demand and sales continuing to rise above a year ago,’ he added. The median existing home price for all housing types in October was $219,600, which is 5.8% above October 2014 when it was $207,500). October's price increase marks the 44th consecutive month of year on year gains. The data also shows that total housing inventory at the end of October decreased 2.3% to 2.14 million existing homes available for sale, and is now 4.5% lower than a year ago. Unsold inventory is at a 4.8 month supply at the current sales pace, up from 4.7 months in September. The share of first time buyers increased to 31% in October, up from 29% both in September and a year ago. NAR's annual Profile of Home Buyers and Sellers, released earlier this month, show that the annual share of first time buyers fell to its second lowest level since the survey began in 1981. All-cash sales were 24% of transactions in October which was unchanged from September and down from 27% a year ago. Individual investors, who account for many cash sales, purchased 13% of homes in October, unchanged from September but down from 15% a year ago. Some 62% of investors paid cash in October. Distressed sales, foreclosures and short sales, declined to 6% in October, which is the lowest since NAR began tracking them in October 2008 and own from 9% a year ago. Some 5% of October sales were foreclosures and 1% were short sales. Foreclosures sold for an average discount of 18% below market value in October, up from 17% in September, while short sales were discounted 8% compared to 19% in September. ‘All-cash and investor sales are still somewhat elevated historically despite the diminishing number of distressed properties. With supply already meagre at the lower end of the price range, competition from these buyers only adds to the list of obstacles in the… Continue reading
Buy to let industry hits out at extra property tax to be introduced next year
There has been a furious reaction to the UK Government’s plans to introduce an increased rate of Stamp Duty for property investors purchasing buy to let properties and those buying a second home from April 2016. Stamp Duty will be calculated at an extra 3% on top of the basic rate if a property is for buy to let purposes, bringing in some £880 million for the Treasury by 2020. But large corporate investors will be exempt from the charge, the Chancellor of the Exchequer has announced. But the industry is furious, saying that it will result in house prices being pushed up between now and next April as would be landlords wanting to extend their portfolios do so before the new rate comes in, then it could result in a catastrophic drop in buy to let investment which would in turn force up rents due to a shortage of supply. David Cox, managing director of Association of Residential Letting Agent (ARLA), described the move as a ‘catastrophe’. He pointed out that it is a bitter blow to landlords coming on top of recent changes to mortgage interest tax relief and the annual wear and tear allowance. ‘Increasing tax for landlords will increase rents and reduce property standards for tenants. To make owning a BTL property financially viable, landlords will need to pass on the increased stamp duty costs to tenants, who will in turn see less spent on maintaining their property and of course see increased rents,’ said Cox. ‘The changes will also deter new landlords from entering the market, pushing the gap between dwindling supply of available property and growing demand even further apart, which will also in turn push up rental costs. In London, where demand is so strong and last year’s stamp duty changes hurt, rather than helped, will see tenants having the greatest burden to bear,’ he added. Richard Lambert, chief executive director of the National Landlords Association, believes that it will cut off future investment in private properties to rent. ‘The exemption for corporate investment makes this effectively an attack on the small private landlords who responded to the housing crisis by putting their own money into providing homes by the party that they put their faith in at the election,’ he said. ‘If it’s the Chancellor’s intention to completely eradicate buy to let in the UK then it’s a mystery to us why he doesn’t just come out and say so,’ he added. David Gibbs, partner at Alliotts Accountants, pointed out that not only will buy to let investors be hit with additional stamp duty on purchase but also a requirement to pay capital gains tax within 30 days of a sale. ‘Investors will face a hike of 3% on stamp duty for all buy to let purchases from 01 April 2016. That means stamp duty rates will run from 5% for property over £125,000 up to 15% on property… Continue reading
House prices growth in UK cities on track for 10% growth in 2015
City level house price inflation in the UK is on track for 10% growth in 2015 as price increases accelerates in large regional cities, according to a new index report. Cities have seen annual house price growth of 9.4% per annum and the large regional cities outside southern England are recording an acceleration in growth off a low base, says the Hometrack UK Cities House Price Index. In Glasgow prices are up 8.3%, in Manchester up 7% and in Liverpool up 5.1%, meaning that these cities are registering the highest rates of annual house price growth since 2007. Glasgow house prices currently average £110,000, less than half the £229,300 average price across all the 20 cities measured by the index. House prices in Glasgow stopped falling three years ago and have since risen by 13%. In the last 12 months they are up by 8.3%, the highest rate of growth since August 2007. Manchester house prices have been recovering since 2012 and average house prices have risen by 17% over this time to £141,200. In the last 12 months house prices across Manchester have grown by 7%, the highest rate of growth since July 2007. Liverpool has registered the weakest house price performance of all the British cities covered by the index. House prices declined between 2007 and early 2013 and have since increased by 10.5%. In the last 12 months the rate of growth has risen to 5.1%, the highest since August 2007. Despite this modest recovery, the average price of £109,800 is still 13% lower than the 2007 peak. The recovery emerging in large regional cities contrasts strongly with the rise of London’s house prices where average values are up by 70% since 2009 and by over 100% in the highest value markets in central London. The report says that it is these high value markets that are now recording some of the weakest levels of house price growth as tax and currency changes impact demand after a period of stellar price appreciation. Kensington and Chelsea has seen prices fall by 2.6% and in the City of Westminster they are up by only 1.3%. ‘Improving consumer confidence and low mortgage rates are boosting demand in cities where the recovery in house prices is in its infancy. While southern cities have been in recovery mode for over six years with price gains of up to 70%, the large regional cities have seen far more modest price rises over just the last three years,’ said Richard Donnell, director of research at Hometrack. ‘Further house price growth is likely to improve market confidence as it pushes down loan to values on mortgaged homes and creates capacity for households to access cheaper credit. Many corporate investors and developers are looking to the major regional cities in search of better value for money in new investments relative to London,’ he explained. ‘The outlook for the next 12 to 18 months… Continue reading
