Currently viewing the tag: "Stamp Duty"
Labour Manifesto Aims To Change PRS Forever

Labour Manifesto Aims To Change PRS Forever

Labour’s PRS Rent Control And Tenure Plans Under Attack

Labour’s manifesto confirms their plan to introduce 3 year tenancies and a ceiling on excessive rent rises in the UK’s private rental sector (PRS).

Previous Government’s have tried introducing rent controls and the result discouraged the building of new homes as well as reducing more financial investment in their rental property portfolios by landlords.

For years rent controls caused damage to the nation’s housing market, reducing the number of properties being built and recovery took almost a decade. The current rhetoric being touted around by politicians could have disastrous consequences for house builders and landlords alike.

The introduction of longer term tenancies is very much geared towards tenants but fails to address the problems already faced by landlords when tenants abscond without giving any notice, leaving the landlord out of pocket and looking for new tenants.

The UK’s private rental sector (PRS) has improved dramatically over recent year’s thanks in part to the introduction of tighter legislation, but there remains a delicate balance between regulation and altering the relationship between tenant and landlord. Intervention on rents and security of tenure has in the past damaged both market liquidity and good business values within the PRS.

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UK Property Market Predictions For 2015

UK Property Market Predictions For 2015

What Will Happen To
The UK Property Market In 2015?

Happy New Year to all our readers, and welcome to the usual confusion over what the year ahead will bring for the UK property market.

Property prices are still predicted to rise in 2015, albeit at a much slower pace than in 2014, with economists and property experts providing forecasts ranging from 3% to 5% property price growth.

However, there are a few events that might affect the UK property market in 2015, namely the general election that will be held in May and the growing probability of Bank of England (BoE) raising the base interest rate.

Regarding the general election, it all could depend which party wins or what coalition combination is named to form the Government, after Labour recently confirmed that they would introduce a mansion tax if they come to power. Meaning that the changes to Stamp Duty that were announced in the 2014 Autumn budget would be negated if Labour win.

Less clear is what will happen with Bank of England interest rates. It had been predicted that a small rise, either by a quarter to half of a percent, was going to be introduced before the end of 2014, but that didn’t happen. Then it was going to be early 2015 but that is now also looking very unlikely.

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Are Your Rental Properties Ready For Christmas?

Are Your Rental Properties Ready For Christmas?

Landlords Urged To Ensure Rental Properties Remain Occupied over Christmas Holidays

This is the time of year when most amateur property investors and landlords start to wind down ready to enjoy the festive session, whilst the more professional property investors and portfolio landlords start planning their goal setting for 2015.

However, there is one thing that landlords need to make sure of over the festive holidays – Will their rental properties be occupied for the whole of Christmas and New Year?

If tenants are going to be away over the Christmas period then they need to make sure that the landlord or their letting agent is aware, because the majority of rental property problems happen during the winter months, with the highest concentration of issues recorded over the Christmas and New Year holidays, especially if the tenants decide turn off the central heating in order to save money while they are away.

Bigger problems can also occur if the tenant decides to notify the whole world on social media sites that they are going away on holiday or to visit family and their rental properties will be empty!

The last thing landlords need is a call from your tenants or their neighbours because they think your rented property has been burgled, so any broken doors or windows will need repairing quickly, the same goes for tackling burst pipes!

Exclusive Content for PIN Academy Members

Exclusive Content for PIN Academy Members

PIN Academy members can check out these really useful informative and content rich posts that are packed with useful hints and tips that can be passed on to your tenants and of course they are very useful for your own residential property too!

* How To Keep Your BTL Property Winterproof

* How To Avoid Burst Pipes This Winter!

To view these useful threads you will need to join the PIN Academy, which has thousands of active members with various levels of property investment and landlord knowledge that is openly shared on the various forums.

There are plenty of comments about the Stamp Duty announcement and the industry reaction to it, plus revelations about the true value of holiday lettings, the revenge eviction bill, leaflet campaigns and a host of other interesting topics including exclusive offers for PIN Academy members.

To join me on the PIN Academy Forum – Click Here!

Property Buyers Who Beat Stamp Duty Deadline Are Laughing All The Way To The Bank

Property Buyers Who Beat Stamp Duty Deadline Are Laughing All The Way To The Bank

Her Majesties Revenue and Customs (HMRC) have reported that there were 466,000 home sales in the first six months of 2012.

The data released by HMRC shows that there were 10% more residential property sales, in the first 3 months of the year, than in the same period of 2011 when there were 425,000 residential property sales, and 2% higher than in the second half of 2011 when there were 458,000 residential property sales.

The increase in residential property sales had been widely attributed to the end of the stamp duty holiday in March 2012, and now the HMRC data has confirmed it.

Until the end of March this year, first-time buyers purchasing property under £250,000 were not required pay the stamp duty tax.

The residential property sales figures support the HMRC data, with sales dipping 11% between the first and second quarter of the year.

Many property pundits had predicted a flurry of activity from first-time buyers before the end of the stamp duty holiday in March, but the increase in the amount of First Time Buyers taking positive action and purchasing property was greater than many expected.

The notable increase in prospective first-time buyers in the first three months of this year, eased drastically following the closing date for the stamp duty holiday and now residential property sales interest from first time buyers has waned compared to 10 years ago due to the lack of affordable mortgage finance available to them and the large amount of money needed to be able to put down a deposit on residential property, often up to 50% of the property’s purchase price.

First Time Buyers, who have finance in place, are like property investors, they want to put their money in and invest in property regardless of stamp duty or any other form of tax.

It’s almost as if they know that there is money to be made from property

UK residential mortgage lending made a dramatic recovery in May 2012 after the sharp decline caused by the end of the stamp duty concession at the end of March.

The Council for Mortgage Lenders (CML) claimed that the amount of residential mortgage loans advanced to property buyers increased by 33% from in April 2012 to 48,300 in May 2012 resulting in overall mortgage lending being 25% higher than at the same point in 2011

The CML put the rise in first-time buyer activity down to the market bouncing back from the temporary slump that came with the reintroduction of 1% stamp duty at the end of March 2012.

CML’s Director General, Paul Smee, said: “The slump following the end of the stamp duty concession seems to have been short-lived. Lending is similar to late 2011 levels and showing a healthy improvement on the same time last year.”

Despite some 18,100 first-time buyer mortgage loans worth £2.3 Billion (GBP) increasing by more than 20% compared with May 2011.

Mr Smee urged caution amid the ongoing Eurozone crisis stating “Economic uncertainty could affect both the supply of mortgage lending and consumer confidence and we still anticipate a challenging lending environment for the rest of the year.”

A leading mortgage lender has stated that on average UK residential property values are now 1.5% lower than a year ago. 

Average property prices in the UK slipped to £165,738 (GBP) down by 0.6% in June this year, compared with May 2012.

Robert Gardner, Nationwide Chief Economist, said: “The slightly weaker trend we’ve observed since March is unsurprising, given the difficult economic backdrop, with the UK economy dipping back into recession at the start of the year and few signs of a near-term rebound. Part of the weakness in property prices may also relate to the ending of the Stamp Duty holiday in March. However, the outlook for UK house prices remains highly uncertain.”

The perceived drop in property values is good news for property investors who negotiate directly with distressed property vendors, allowing them to ease the property owners financial burdens without breaking the bank.

Nationwide also estimate that over 200,000 First-Time Buyers (FTBs) saved around £1,800 each reaping maximum benefit from the Stamp Duty break. 

Popular property portal – Rightmove reckon first-time buyers are ‘surprisingly’ upbeat and that there are now more prospective first-time buyers than at any time over the last three years, with almost three in ten people expecting to buy property in the next 12 months.

However, the biggest concern for 33% is about raising a deposit, although this proportion is down from 42% a year ago.

Miles Shipside, director of Rightmove, said: “The results come as a welcome surprise, and hopefully, this three-year high in intending first-time buyers will come to fruition. It seems that some five years into the property market downturn, more people are beginning to get their heads and wallets around the new rules of first-time home ownership, though they still face some testing challenges.”

The Royal Institution of Chartered Surveyors (RICS) have delivered a stinging attack on the coalition Government’s NewBuy mortgage scheme, suggesting it could wreck the entire housing market.

RICS are also calling for the regulation of all letting and property management agents, and the introduction of a single, UK regulation and redress scheme to be set up within 3 years.

The RICS says that NewBuy, which offers purchasers of new-build property 95% mortgages underwritten by taxpayers and developers, could reduce demand for ‘second-hand’ property and play havoc with lenders’ affordability calculations.

The RICS says that the NewBuy scheme may not even help first-time buyers when they come to buy second-hand properties because without stimulating the second-hand market as well as new-build, purchasing chains and overall transaction levels will begin to stagnate.

The institute is to include specific guidance to the valuers of new homes, to ensure that they understand the impact of NewBuy and make sure it ‘does not adversely impact the market’.

But while the RICS is calling on the Government to help local authorities introduce more Lend a Hand schemes, where buyers put down deposits of at least 5% and local authorities provide an indemnity of up to 20%, the organisation says the ‘dire state’ of local government finances makes this unlikely.

The RICS are also calling on the Government to amend the Estate Agents Act to bring all property letting and management agents within its scope, in terms of the need to have client money protection professional indemnity insurance and redress mechanisms.

The RICS says it will work with other bodies to establish by 2015 a single industry-wide regulation and independent redress scheme for the whole sector.

It also wants to see the Government encourage more investment in the private rented sector, including encouragement of ‘build to rent’ schemes, and for private tenants to be offered longer tenancies.

Elsewhere in its new housing policy, the RICS calls for VAT on all home repair, maintenance and improvement work to be cut to 5%, and for Stamp Duty to be reformed.

The RICS produced its new housing policy after consulting its members and will now lobby the Government.

Peter Bolton King, RICS global residential director, said: “To deliver real influence in the corridors of power, RICS needs to have clear residential policy. In putting this landmark work together, we met with our members and firms of all sizes from right across the country. What came across loud and clear is the desperate need to reform sections of the market and generate growth right across the UK. We will now take these recommendations to the Government with the aim of helping them to improve the residential property sector for those operating within the industry and the public as a whole. Change needs to happen if we are to see an economically viable and professionally driven residential sector, and I stand ready to work with members, government, other industry bodies and consumer organisations to achieve this.”

Gross mortgage lending declined to an estimated £10.2 Billion (GBP) in April 2012.

Mortgage lending fell by 19% from £12.6 Billion (GBP) in March 2012 but was 2% higher than the total of £10.0 Billion (GBP) in April 2011, according to the Council of Mortgage Lenders.

CML chief economist Bob Pannell comments:“Mortgage lending activity has been relatively buoyant in recent months, with stronger lending for house purchase underpinning the more upbeat lending picture. The underlying picture is likely to be a bit stronger than the April figure suggests, because some first-time buyers are likely to have brought forward their transactions to March 2012 to take advantage of the stamp duty concession that was coming to an end in March 2012. Eurozone developments remain highly uncertain and have the potential to undermine UK economic prospects and conditions in our housing and mortgage markets. The underlying picture is likely to be one of easing momentum in the housing market, but with potential for a sharper downwards correction on bad Eurozone news.”

Residential property prices across the UK slumped in April, according to the latest Royal Institute of Chartered Surveyors (RICS) housing market survey.

Across the UK, 19% more chartered surveyors reported property valuation falls rather than rises in house prices.

Expectations for future residential property prices also reached their lowest point with a net balance of 17% more respondents predicting further drops.

Demand from potential buyers was relatively flat during April 2012 as 5% more surveyors reported increases rather than decreases in new buyer enquiries (from +10% in March).

Meanwhile new instructions were stable as 1% more respondents reported falls rather than rises in new residential properties coming up for sale. Whilst the trend may appear flat, the level of supply has not seen any significant drops since July 2011.

April’s property transaction levels entered negative territory for the first time since September 2011, as 6% more RICS surveyors across the UK reported decreases rather than increases in transaction levels.

London was the only part of the UK to observe a residential property prices rise, while the West Midlands and Wales saw the most significant declines.

Whilst the RICS predictions for future property prices saw a notable dip, expectations for transaction levels once again remained positive with a net balance of +15% more respondents expecting sales to rise over the coming three months.

Global Director for Residential Property at RICS, Peter Bolton King, says: “With the recent surge in activity brought on by March’s stamp duty holiday coming to an end, it is unsurprising to see that prices across much of the country are continuing to fall. Renewed concerns over the economy and talk of a double dip recession dominating the headlines in recent weeks may well have served to undermine consumer confidence. What’s more, the continuing lack of affordable mortgage finance is still hindering many first time buyers who cannot afford to get a foot on the property ladder.”

UK Residential Property Prices Slip Again

UK Residential Property Prices Slip Again

New research by the Royal Institution of Chartered Surveyors (RICS) has revealed that the revival of the UK residential property market has apparently run out of steam following the end of the stamp duty holiday for first-time buyers in March this year.

The RICS report found that 19% more chartered surveyors observed residential property price decreases than increases in April 2012 and 17% of them predicted further slippage of UK residential property prices in the near future.

6% of chartered surveyors also reported a drop in residential property sales as opposed to a rise, the first time this has happened since September 2011.

Peter Bolton King, Housing spokesman for RICS, stated that the results of the research are far from surprising: “With the recent surge in activity brought on by March’s stamp duty holiday coming to an end, it is unsurprising to see that prices across much of the country are continuing to fall”.

Many of the negative forecasts for UK residential property in the near future are based on the fact that many of property sales would ordinarily have happened throughout the year, but the scramble to push through deals and invest in property before the end of the stamp duty holiday in March has seriously affected the annual pattern of residential property sales.

With UK residential property prices on the slide once again it is time for property investors to keep the market afloat whilst snapping up property bargains across the country. Wales and the West Midlands have experience the largest drops in residential property values, so these areas could see heavy interest from investors.

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