Tag Archives: yahoo
Property sales in UK set to slowdown when buy to let surge ends
The UK housing market is set to slow down over the next three months following a short term rush on buy to let properties, says the latest report from the Royal Institution of Chartered Surveyors. The monthly survey report from RICS also shows that house price inflation peaked last December ahead of an anticipated rush to beat buy to let tax rises which come into force on 01 April. Once the 3% surcharge on additional homes, which include buy to let and second homes, is in place, RICS predicts that there will be more modest growth in property sales. While 74% of survey respondents expected there to be a rush on buy to let purchases ahead of Stamp Duty increases only 17% (net balance) expected to see an increase in sales over the coming three months. In addition, while house price inflation expectations peaked following the Chancellor’s Autumn Statement, with prices driven by speculation regarding an increase in investor demand, RICS says that this trend is set to soften from March as investor interest dampens. Only 21% of respondents expect prices to increase over the coming months. The survey showed that house prices continued to creep up throughout February. Across the UK, East Anglia continues to show the sharpest price increases, with 91% of respondents reporting that prices had risen over the past month. London and the North East by way of contrast saw very modest gains while the South West has seen the highest rise in sales across the UK for the last three months and 49% of respondents experienced a rise in sales rather than a fall and further increases are expected over the year ahead. New instructions to sell also increased more sharply in the South West than anywhere else in the UK as 34% of surveyors saw an increase in new listings rather than a decrease. New buyer enquiries in the South West rose for the twelfth month in succession with 49% more respondents seeing an increase in demand rather than a fall, the highest in the UK. However, uncertainty weighs on London’s housing market. Price expectations have turned negative in prime central parts of the capital and after sharp periods of inflation, London house prices look set to stabilize. Overall outer London boroughs remain firmly positive and Zone one properties are showing signs of a downturn. ‘Anecdotal evidence has suggested that a combination of exogenous factors is contributing to the overall picture in prime London, with tax changes, foreign market slowdowns and uncertainty over Brexit all being mooted as potential reasons behind the changes in demand,’ said Simon Rubinsohn, RICS chief economist. ‘This is not necessarily indicative of the long term market and the depreciation of the pound could encourage overseas investors back in to the market as could the outcome of the European referendum,’ he explained. He pointed out that the challenges facing the top end of London’s property market are clearly visible in the latest results. ‘However, it is… Continue reading
Negative equity rate falls to 13.1% in the US in fourth quarter of 2015
Fewer home owners in the United States were underwater as the negative equity rate fell to 13.1% in the fourth quarter of 2015, according to the latest data to be published. But more than 820,000 underwater home owners still owe over twice as much on their mortgages as their homes are worth, a reminder that some owners may not see positive equity in their homes in the foreseeable future. The data from the Zillow Negative Equity Report also shows that six million home owners were still in negative equity, which means they owe the bank more than their homes are worth. A year ago eight million home owners were upside down on their mortgages. The report explains that over time, negative equity can act as an anchor on a housing market, preventing underwater homeowners from listing their homes and re-entering the market. It is more prevalent in less expensive areas that are affordable to first time buyers. Without these homes available, many potential buyers are side lined and unable to take advantage of mortgage rates that remain near historic lows. It also points out that in the past year, millions of underwater home owners resurfaced as the total amount of negative equity declined by $75 billion, but some owners are so far underwater that positive equity may be several years away, leaving them stuck in their homes unable to sell. ‘Even though the number of underwater homeowners has fallen significantly since the peak of the housing crisis, negative equity persists in many markets as it fell at its slowest pace in a year,’ said Zillow chief economist Svenja Gudell. ‘Things are moving in the right direction, but some owners are still deeply underwater. As we move into the home shopping season, inventory is already low, and negative equity is keeping potential additional stock from becoming available,’ she added. Las Vegas still had the highest rate of negative equity at 20.9% followed closely by Chicago, where 20.5% of home owners were upside down on their mortgages. At the other end of the spectrum, in San Jose only 2.8% of mortgaged home owners were underwater. Continue reading
London’s prime property market likely to be attractive regardless of EU vote
The prime property market in London is likely to retain its attractiveness to wealthy international buyers regardless of what happens in the forthcoming referendum on the UK’s membership of the European Union. However, prices may soften after April as there has been a demand from buyers of second homes to complete before a new 3% stamp duty surcharge comes into force on 01 April, according to independent property buying agency Black Brick. However, one immediate impact of the prospect of a Brexit, the term coined for the UK leaving the EU, has been to hit sterling. Camilla Dell, managing partner at Black Brick pointed out that between the end of 2015 and late February, UK currency lost 6% against the dollar and, over 18 months, the currency has slid almost 20% against the greenback. ‘This serves to make UK property more attractive to dollar based buyers. As is so often the case, opportunity is the other side of the coin to crisis and, if you add currency moves to the 7% to 7.5% falls we've seen in prices in Knightsbridge, for example, then prices are more than a quarter lower in dollar terms than they were 18 months ago. It's certainly tempting some overseas buyers back into the market,’ she explained. ‘London is going to retain its attractiveness to wealthy international buyers regardless of whether the UK remains in the EU. Its cultural attractions, geographic location, legal system, and concentration of talent mean that there will always be demand for prime central London property,’ said Dell. The firm has seen that with just weeks to go before the introduction of a 3% hike in stamp duty payable on buy to let and second home acquisitions there is a rush among buyers to complete transactions before 01 April. ‘Certainly, for buyers who have had offers accepted, or who have exchanged, there's still time and obvious motivation to get deals signed and sealed before the tax rise. However, we should sound a note of warning as people yet to find the right buy to let investment should weigh up the costs and benefits of trying to rush through deals this late in the day,’ Dell explained. ‘We have seen cases of vendors seeking premiums in exchange for getting transactions done before 01 April, premiums that, in some cases, substantially erode the tax benefit involved. It's also worth bearing in mind that, as with previous increases in stamp duty, we expect this latest rise will feed through into asking prices and would expect prices for buy to let properties to soften after 01 April, as vendors' expectations align themselves with the yields demanded by investors,’ she added. Continue reading
