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London properties under £2 million done better than prime sector, analysis shows
Properties in London under £2 million outperformed the rest of the prime London property market in the second half of 2015, continuing a trend of recent years, the latest analysis shows. In particular, properties worth less than £1 million have grown by more than any other price bracket, according to the latest London residential review from real estate firm Knight Frank. The analysis says that this is because it is a market that is less exposed to regulatory change. The series of tax changes in recent years that affect the prime London market adds £30,000 to the current stamp duty rate for a second home buyer of a £1 million property, though this sum would be matched by house price inflation in less than a year at current growth rates. It is also a market that is less exposed to global economic volatility and more closely aligned with the performance of the mainstream market, where demand continues to outstrip supply on the back of a London population forecast to grow by more than 100,000 every year for the next decade. Indeed, the highest growth has largely been outside the higher price brackets of prime areas of central London over the last 20 years. The analysis report explains that changes to stamp duty rates in December 2014 raised questions around the viability of a system that has dampened transaction levels and lowered the tax take in London. The new rules mean that buyers will pay £153,750 in stamp duty for a property worth £2 million versus to £100,000 before the change. The result is that £1 million plus transactions in London in the first seven months of this year fell 25% compared to the same period in 2014. A Knight Frank analysis of sales volumes across London local authorities shows the biggest impact has been felt in prime central London. Between January and July this year, the volume of transactions fell 28.6% in the borough of Westminster compared to 2014. The drop was 27.5% in Kensington and Chelsea and 27.9% in Tower Hamlets, which includes the Canary Wharf district. Accordingly, the total value of transactions in central London has fallen disproportionately. The report also explains that while a progressively structured tax means more first time buyers and home movers will pay less when they buy a home and there is every indication policymakers are now turning their attention to supply, making sure there are enough new homes to meet demand across London and the rest of the country, the volume of sales only rose in three out of London’s 32 boroughs between January and July 2105 and the value of transactions only rose in 11 boroughs. As a result, the stamp duty tax take was down 8.7% across London, which included a decrease of 17.5% in Westminster, -33.8% in Tower Hamlets and -19.1% in Wandsworth. The stamp duty take only fell 1% in Kensington and Chelsea due to the impact of the higher… Continue reading
Spain, Cyprus and Portugal expect more sales to British buyers in 2016
Spain, Cyprus and Portugal could offer British buyers looking for a holiday home some bargains in 2016 with experts revealing that properties are starting at €50,000. Some parts in Spain in particular currently offer some low priced properties that are not the wrecks usually associated with the bottom end of the market, according to Martin Dell, director of Spanish property portal Kyero. ‘There are thousands of Spanish properties available for under €50,000. Nor are they just remote country houses in need of vast repairs, this kind of money gives you plenty of choice in Spain these days. You can pick up a three bedroom townhouse, a six bedroom country cottage or a city apartment with a shared pool,’ he pointed out. For buyers looking to spend closer to €100,000 Cyprus offers possibilities, according to Ideal Homes International. It has a two bedroom apartment in Paphos with a shared pool in this price range. ‘Cyprus has got some real bargains at the moment and the climate is perfect for those looking for a holiday retreat away from the rain and cold back home. The market is unlikely to move much over the next few months, which means UK buyers can take their time to research the area they would like to own in without fear of getting priced out of the market while they do,’ said the firm’s director Chris White. White, who runs boutique estate agency Ideal Homes Portugal, added that there are holiday homes in the country for around €150,000 in the Algarve which is popular with British buyers as there are flights available from across the UK. In this price range the possibilities include a two bedroom apartment with a terrace and garden in Portimão, or a three bedroom with a pool in Albufeira. Those with more to spend and looking for something a little more upmarket could find their dream holiday home on the Balearic Islands for as little as €200,000, according to Marc Pritchard, sales and marketing director of Taylor Wimpey España. ‘There's nothing like owning property in an island location for achieving ultimate relaxation, which is precisely what a holiday home should provide. For many people the sea has a calming effect and Mallorca's plentiful restaurants, shops, beaches, golf courses and marinas really do offer something to suit all tastes,’ he said. Two bedroom apartments with direct access to the beach start at €235,000 at Costa Beach but there are plenty of pricier properties such as a cliff top townhouse with a communal infinity pool for €625,000 at Cala Magrana Mar. After the warmest autumn on record, Mallorca’s real estate market has enjoyed a buoyant year of sales that has surpassed expectations according to the island's international real estate agent, Engel & Völkers. Sales towards the close of the year look set to close up by approximately 25% over 2014 and prices are starting to creep up for top locations by up to 15%. Hot spots have… Continue reading
Average rents in the UK increased by almost 4% in 2015
Average UK rents increased by 3.8% in 2015 despite a small seasonal dip of 0.2% in December, according to the latest index to be published. Housing shortages across the country means that rental increases have outpaced wages in many parts and three bedroom properties have seen the fastest rent rises, according to the Landbay Rental Index. This takes the average rent to £1,280 per month, with the highest rents found in London at £2,047, followed by the South East at £1,019 and then a big drop to the East of England at £863. Every region has seen rents up year on year. This was led by Northern Ireland with rents up 6.7% compared to 2014, followed by the East of England up 5.6%, Scotland up 4.5%, the West Midlands up 4.4%, the South West up 4.1% and London up 4%. The South East saw annual growth of 3.7%, followed by the East Midlands and Wales, both at 3%, then Yorkshire and the Humber at 2.1%, the North East 1.8%, and the North West at 0.9%. Compared to 2014, three bedroom properties have seen the biggest increase in the average rental price, up 5.2% to £1,484 in 2015 suggesting that family homes and properties for sharers are in highest demand. The average rent for a one bedroom home has climbed 3.2% to £1,042, a two bedroom home by 3.9% to £1,243, and above three bedrooms by 1.5% to £2,166. Commuter hotspots surrounding London were amongst the country’s top risers in rental prices. Luton with a rise of 11.1%, Medway up 8.8% and Thurrock up 7.3 were in the top five for rent price increases during 2015 when comparing rents from December 2014 to December 2015, a sign that many working in the capital are priced out from living there. With counties to the North, East and South of London all showing higher than average increases in rent prices during 2015, an evident ripple effect is appearing in southern parts of England, the index report suggests. ‘Despite a small seasonal dip towards the end of the year, rents rose significantly ahead of wages in 2015,’ said John Goodall, chief executive officer of Landbay. ‘Rents often track wages as consumers with more pay compete for the most desirable rental properties, but the fact that rents are outpacing wages is a clear sign of the shortage in properties to rent as large parts of the UK face an acute housing shortage. This trend is clear in London and the South East, along with large parts of the East Midlands and East Anglia, and it is most evident for three bedroom properties,’ he explained. ‘Based on its recent policy changes for the private rental sector such as the new stamp duty surcharge and changes to tax relief on mortgage interest, the Government seems intent on weeding out amateurs from the ranks of new buy to let investors. If it is successful, our rental index suggests that… Continue reading
