Investment Property | House prices up £1,300 a week as seven vie to buy each home
Investment Property | BRITAIN’S house prices jumped by as much as £7,430 last month, figures showed yesterday.
There was an increase of £5,583 recorded for the typical family home, with London property values up by more than £7,000 in October.
The £1,300 weekly hike has pushed the cost of a three-bedroom semi to an average of £209,923, up three per cent on September and 11 per cent annually.
Prices in the capital also hit a new high of £404,199, which was up four per cent monthly and 10 per cent annually.
The soaring asking prices do not appear to be deterring buyers with sales up four per cent last month and by a third in a year – a three-year high. Cheap investment property
In London, there were reportedly 14 people competing for every property and seven people competing across the rest of Britain. investment property
That is the highest figure since 2010, claims the latest house price index from Sequence (UK), owner of 300 estate agency branches, which trade under names including Barnard Marcus and William H Brown.
Investment Property | Mortgage applications rose by six per cent in October and by 45 per cent annually as buyers flooded the market, reported Sequence (UK).
Chief executive David Plumtree said: “The appetite to buy property across the UK has risen to record levels. This has impacted on property prices as competition for every new instruction intensifies.”
Other experts do not see an end to rising prices until an extra supply of homes cools down the market.
Richard Sexton, director of e.surv chartered surveyors, said: “Help to Buy has opened a flood of new buyers, causing prices to surge upwards.” The second phase of the Government’s Help to Buy scheme was launched in October and offers lenders a taxpayer-backed guarantee on 95 per cent mortgages on homes costing up to £600,000. In the first month, 2,000 sales were arranged.
The first phase was launched in April for buyers of new-build homes. So far, 5,375 have sold, mostly in Leeds, Wiltshire and Milton Keynes.
cheap london property | Peterborough hospital to be site of 350 new homes
A former hospital in Peterborough is to be the site of 350 new homes and a primary school.
Peterborough District hospital has been out of action for three years, but has been purchased by London-based developer Lands Improvement Holdings (LIH) for £7.44m.cheap london property
Local MP Stewart Jackson welcomed the news, adding that the sale will help boost the NHS trust's ailing finances.
Kevin Moriarty, managing director of LIH, said: “The regeneration of this large area in the heart of Peterborough city centre can now begin in earnest.cheap london property
“It will be a complex project, and there is a huge amount to be done in terms of planning, remediation, demolition work and installing new infrastructure.
“But the end result will be a vibrant new area." More precise plans for the site will be made available to local people in 2014.
Peterborough City Council leader Marco Cereste said that the new-build development would "create many new family homes".
However he pointed out that it would not be a complete demolition job, with a number of the hospital's important and historic buildings preserved.
Cheap London Property | Borrowing to fall to 'only' £105bn this year after Help to Buy boost
Cheap London Property | Side effect of property scheme is £400m gain in stamp duty this month
The Government's coffers are being bolstered by an increase in revenues from stamp duty as the Chancellor's Help to Buy subsidies reinvigorate the housing market, official figures show.
Revenues from the property sales levy were up by £400m in October compared with the same month in 2012 – a 46 per cent jump, according to the Office of National Statistics (ONS).
The total take from the tax over the month was £1.2bn.
The wider public finances for October pointed to a modestly healthier picture, with total borrowing coming in at £8.1bn, down by around £100m year on year. Investment property
Over the financial year to date, the Government has, excluding various distorting one-offs, borrowed £64.8bn, down around 8 per cent from the £70.6bn it borrowed over the same period in 2012/13.
Responding to the data, a Treasury spokesman said: "Britain's hard work is paying off, the Government's long term economic plan is working, and the deficit is down by a third."cheap london property
City analysts now confidently predict that the Office for Budget Responsibility (OBR) will revise down its £120bn borrowing forecast for 2013/14 at the time of George Osborne's 5 December Autumn Statement by around £15bn.
Cheap London Property | The general background remains good news for the Chancellor who will be able to announce a lower borrowing forecast as well as stronger growth," said Philip Shaw of Investec.
"There should be clear, blue water between the new numbers and last March's Budget predictions."
The CBI provided further positive news regarding the economy by suggesting that manufacturers' order books in November were at their most buoyant levels since 1995.
The total order book balance in the group's monthly industrial survey rose to +11, up from -4 the previous month, and well ahead of City expectations of a 0 reading.
The news was strong enough to send up 10-year gilt yields by around five basis points at one point to 2.9 per cent, as traders priced in stronger growth. Sterling was also up over the day to $1.615.
"This new evidence shows encouraging signs of a broadening and deepening recovery," said Stephen Gifford, the CBI's director of economics.
"Manufacturers finally seem to be feeling the benefit of growing confidence and spending within the UK and globally," he added As well as the strong stamp duty revenues, the ONS reported that VAT receipts rose by 6.4 per cent year on year in October, reinforcing the picture of a strengthening and consumer-led recovery. Income and capital gains tax revenues were 2.3 per cent high than the same month in 2012. Total current spending was 1.2 per cent up on a year earlier.
However, there were also some signs of weakness, with the corporation tax take down 8.2 per cent on the same month in 2012, reflecting declining receipts from North Sea energy firms.
The OBR admitted that borrowing was coming in lower than it forecast in March but also cautioned that the scale of any eventual public borrowing undershoot for the year as a whole remains "very uncertain".
cheap investment property | Councils must be free to build more homes urges report
Councils should be allowed to borrow more to help tackle the housing shortage, a report recommends.
The Local Government Association (LGA) said that there are nine councils who have 40,000 people on waiting lists, but are not able to take loans to build homes for them.cheap investment property
The government say that there is "no magic money tree" and that it must cut public borrowing.
They add that housebuilding is recovering and is currently growing at its fastest rate since 2007.
Currently the amount councils can borrow against their ring-fenced housing budgets is capped.
But Mike Jones, chairman of the LGA's environment and housing board, said that there is a case for "responsible borrowing" because such investment would be "low-risk" and paid back many times over in future rents.cheap investment property
"There are millions of people on social housing waiting lists and councils want to get on with the job of building the new homes that people in their areas desperately need," he continued.
"Local authorities have excellent credit ratings and we want to use our assets to help kick-start the housing recovery, but our hands are being tied."
The LGA point to Darlington, Dudley, Exeter, Gosport, Harrow, Royal Borough Greenwich, South Cambridgeshire, Waverley and Woking councils as areas where the problem is particularly acute.
They hope that the George Osborne will bring in a reform to the council lending cap in the Autumn Statement on Thursday.
However the new housing minister, Kris Hopkins, said: "As a lobbying organisation, the LGA need to realise that there is no magic money tree, and this government needs to cut public borrowing to keep interest rates down and ensure long-term economic growth.
"But under this government, the housing market has turned the corner, with house building now at its highest level since 2007, backed by up £19.5bn of public and private investment in affordable housing over the current spending review.
The government will outline its broader approach in the Autumn Statement."
Investment Property | London house prices set to spike ahead of new tax
Investment Property | Prime central property to lead the charge as foreign buyers seek safe havens, say advisers
Property prices in central London are predicted to spike over the next quarter as overseas investors rush through the sale of luxury homes to avoid paying a capital gains tax which could be introduced in the spring.
A flurry of completions will drive the average price of property in the prime areas of Chelsea, Kensington, Knightsbridge, Belgravia and Mayfair up 5pc in the first quarter of 2014 to £3.8m, according to research from property advisers Benthorp.
This is an increase of 123pc on the £1.7m market low in 2009, driven by unrelenting demand from foreign investors seeking a “safe haven” investment. Cheap investment property
The uptick has been exacerbated by the fear that a capital gains tax on the sale of foreign-owned homes in the UK could be introduced by the Chancellor, George Osborne, in his Autumn Statement. Industry commentators have voiced concerns that this may deter overseas investors from buying in London, and divert capital flows away from the UK at a time of economic fragility.
Harry Clifton, managing director of Benthorp, said: “We have seen some overseas-based long-term UK real-estate investors markedly speed up their decision-making for purchasing over the past two weeks, in anticipation of extra tax entry and exit costs that will simply drive up overall entry prices.” investment property
Mr Clifton said that prime central London remains a secure long-term base for investment, but clients are concerned about tax-induced price inflation.
The study also showed that transactions fell by 11pc last summer, but prices surged as foreign buyers moved away from £10m townhouses to “superflats” in the £2m to £5m bracket.
Investment Property | “Foreign investors are opting for lateral living, which resembles their properties at home, as opposed to tall, thin townhouses,” said Mr Clifton.
Multinational companies, conscious of overspending on executive relocation packages, are downgrading to luxury apartments, which is also increasing demand for “superflats” such as One Hyde Park or Sloane Square’s Lennox Gardens.
“Just converting office buildings in Mayfair to residential blocks is doubling the value of the property and if the City recovers and bankers become cash-rich again, this will just push prices up further,” added Mr Clifton.
City bonuses fuelled the prime property price rise from 2002 to 2007, but demand fell when the banking crisis hit and bonuses almost halved in 2009.
However, this was more than compensated for by overseas investors seeking a safe haven from the volatility of the debt and equity markets, and the relative decline of the sterling against the dollar has kept prime central London affordable by comparison with prime Manhattan.
More than 75pc of property in Mayfair is owned by international buyers. The area is popular with US ex-investment bankers turned hedge fund owners, some of whom are now naturalised in the UK while keeping family homes on America’s east coast, according to the report.
Cheap London Property | House prices rocket as more people look to buy
Cheap London Property | House prices in Bedford have reached a seven-year high as demand for properties oustrips supply.
According the Royal Institute of Chartered Surveyors (RICS) last month saw 50 per cent of surveyors in the East of England region reporting a hike in prices as buyers are presented with fewer options.
The RICS says the Government’s Help To Buy scheme is boosting buyer numbers but a lack of homeowners putting their properties on the market is inflating prices.
Bedford estate agent Jack Goodacre said the local market “100 per cent” reflects the findings. He said: “We are seeing houses achieve their market value more and more. Cheap investment property
Previously peole were having to accept ten per cent less than their asking price, now it’s more like just three or four per cent.
“This is down to the competition for each house, which has increased in the past six months. We are seeing about 10 to 15 people interested in each house, some cases there’s more. It’s a case of people are now able to pick and choose their buyer.”
Mr Goodacre, who is instructions manager for Connells estate agent in Bedford, said the Help To Buy scheme and the return of 95 per cent mortgages has fuelled the boom. cheap london property
He added people who previously were unable to get loans can now afford to buy and are snapping up one and two-bedroom flats, especially as buying is now cheaper than renting.
He said: “It is bringing people out of rented accomodation and we cannot get enough of what is termed affordable housing, which are homes in the £130k to £160k bracket.
“Normally at this time of year the housing market dies down but our phones are still ringing.”
The boom is expected to continue into next year but, warns Mr Goodacre, the scheme will not last forever. He said: “Next year more banks will be offering these mortagages so sellers might want to wait until then.”
The RICS survey revealed the numbers of people looking to rent in the East of England has dropped to the lowest level since 2003.
Help To Buy is a Government scheme which helps first-time-buyers and people on low incomes buy their own property.
Cheap Investment Property | House prices set to soar by 24% as good times return
Cheap Investment Property | BRITAIN’S economic resurgence will drive house prices up by nearly a quarter over the next few years, property analysts predict.
Rising levels of growth alongside falling inflation and unemployment will combine to push the value of a typical home to £216,097 in five years.
In 2014, experts predict, the demand for family homes will outstrip supply.
This coupled with the impact of the Government’s Help to Buy scheme is set to fuel a seven per cent surge in prices.
The cost of an average three-bedroom semi will rise to £185,833 – a jump of £12,000 on today’s £174,329.
Along with a five per cent increase in 2015, four per cent in 2016 and three per cent in 2017 and 2018, that means values will soar by £41,768.
Cheap investment property | The bumper forecasts, amounting to 24 per cent in the next five years, came a day after Bank of England Governor Mark Carney said the economic recovery had finally taken hold in the UK, with growth rates among the strongest in the advanced world. cheap investment property
Estate agents Knight Frank also claimed unprecedented support from the Government has had a “dramatic effect” on the property market, enabling it to deliver its most optimistic outlook since the credit crisis began.
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The firm’s Liam Bailey said: “For the first time in five years, we can be broadly positive about the UK housing market.”
Average prices in London will jump by £76 each day next year but every region will enjoy a rate of growth last seen before the financial crisis.
While values in the capital leap 8.4 per cent, or nearly £28,000, the North-west will see a seven per cent rise and Scotland 6.3 per cent. Cheap london property
Mr Bailey said the Help to Buy scheme had not only aided first-time buyers to secure a mortgage but it had triggered a marked change in sentiment. He added: “At the same time, the economy has been growing more strongly than economists expected.
“Price growth is encouraging transactions, contributing to labour mobility, and first-time buyers are able to access the market in a way they couldn’t 12 months ago. The improvements are not limited to London.” Brian Murphy, head of lending at the Mortgage Advice Bureau, said: “The arrival of Help to Buy has been an integral part of improving the outlook for the wider property market.
“Both the equity loan and mortgage guarantee options have got off to an impressive start. It is very much early days in assessing its impact overall but it has clearly had a positive effect.”
The turnaround in the housing market raises the threat of an early interest rate rise as unemployment falls towards the Bank of England’s seven per cent target.
investment property | Landlord fears rent arrears rise under Universal Credit
A private sector landlord Kevin Green said universal benefit payments could hit his business
A private sector landlord with more than 700 homes says benefit changes could put his business at risk.
Carmarthenshire-based Kevin Green fears tenants will fall behind on their rent when a new system of paying benefits is introduced.
He says he may have to stop letting to people on welfare.investment property
The UK government says it is restoring fairness to the welfare system, and that it is working on protecting landlords and tenants.
Most of the 762 properties Mr Green lets are in or near Llanelli. Around 60% of his tenants receive benefits, he says.
Last month the UK government began phasing in one of its big welfare reforms – Universal Credit. The roll-out is due to finish in October 2017.
Next spring Shotton, Flintshire, will become the first part of Wales where it is introduced.investment property
Six working-age benefits – including housing benefit – will be merged into one monthly payment into the claimant's bank account.
A trial of the system in Torfaen among social housing tenants found arrears rose from around £20,000 to almost £140,000 in seven months.
Private sector tenants already have their housing benefit paid to them, rather than it going directly to the landlord.
But millionaire Mr Green, who experienced homelessness in 1984, said he feared some would struggle with their household finances and fail to keep up with the rent when benefits are merged.
"What we're finding is if rent payment is put in the tenants' hands they are not being taught in school or further education to run a home and they just can't budget," he told BBC Wales Sunday Politics.
"And it's going to lead to huge arrears. It could lead to us going bust at the end of the day and not providing homes for less fortunate people as well."
He added: "If we pull out the market that's hundreds of houses that we rent out in this area that's pulled out.
"We're the UK's largest private sector landlord. We pull those out of the social welfare market and that's houses that people haven't got to live on housing benefit."
A Department for Work and Pensions spokesperson said: "Our reforms restore fairness to a system that was allowed to spiral out of control.
"We are working now to ensure that the right protection and exemptions are in place for both tenants and landlords ahead of Universal Credit.
"Direct payments are an important part of Universal Credit to make it easier for people to move into work, but we've been clear from the outset that we will take steps to protect vulnerable people."
Cheap London Property | House Prices: 'Tax To Tackle London Bubble'
Cheap London Property | Foreign investors may be hit with capital gains tax as part of efforts to prevent prices soaring beyond control, Sky News learns.
George Osborne is considering slapping new taxes on foreign property investors in an effort to tackle what many see as a house price bubble in London and the South East of Britain.
The Chancellor is actively investigating imposing capital gains tax on foreign owners of British property at the Autumn Statement in December.
The Treasury has already provisionally costed the measures and is awaiting a final decision from Mr Osborne in the coming weeks.
While those living in Britain have to pay capital gains tax (CGT) of 18% or, more commonly, 28%, if they make a profit when reselling all but their main home, non-resident property owners are currently exempt for all their properties. Cheap london property
Britain’s comparatively generous regime is thought to be one of the factors behind the sharp increase in foreign ownership of properties in London.
House prices in London rose by nearly 9% in August, compared with around 2% elsewhere in the UK, according to the Office for National Statistics.
Fast-rising property prices have fuelled fears about a housing bubble in so-called 'prime' London areas such as Kensington & Chelsea, where the average home is now worth almost 30 times the average local salary.
The price increases have been driven in part by foreign investment, with around 70% of the most expensive London newly-built properties being bought by non-UK citizens, according to estate agency Knight Frank.
It calculates that 65% of overseas buyers intend to rent their London properties rather than live in them. cheap london property
At present, these buyers do not have to pay tax on the gains if they go on to sell the property in the future.
Under plans being mulled by Mr Osborne, even overseas buyers would become liable for CGT, as they are in many other countries throughout Europe.
According to the Treasury’s own internal research, the tax would be unlikely to raise significant sums – tens of millions rather than billions – but would address concerns that overseas investors might enjoy favourable treatment when it comes to property investment.
In last year’s Budget, the Chancellor introduced a series of measures levying annual charges on foreign investors who attempt to avoid paying taxes by holding properties through so-called 'wrapper' companies.
Cheap London Property | The charges have brought in more revenue than expected, something the Chancellor is likely to outline at the Autumn Statement.
However, although imposing new capital gains taxes on overseas investors might address concerns about a destabilising influx of cash into the capital, some within Whitehall fear that they would undermine the Government’s message of keeping Britain 'open for business'.
Others are worried that they would cause a sharp fall in foreign demand for London property, which in turn could undermine the broader UK housing market ahead of the next election.
The Prime Minister's spokesman said today it was "speculation" to talk of a tax to tackle a London housing bubble.
But he added: "We need a range of approaches on housing which very much recognise in large parts of the country the value of homes has barely increased."
cheap investment property | Economists predict house price rises will aid recovery
Rises in house prices will help the UK's recovery next year, according to economists.
House price growth is expected to continue in 2014 as a new confidence sweeps through the market.
House price metrics released over the last few months have shown a considerable upturn. This is likely to encourage sellers, many of whom are thought to be waiting until the market improves before they move home.
That could see a spike in transactions over the next 18 months.cheap investment property
More home sales would give a boost to shops selling furniture, fridges, washing machines and other pricey items traditionally purchased for new homes.
Jonathan Portes, National Institute of Economic and Social Research (NIESR), said: "Psychology and animal spirits matter a lot in the housing market.
If people think that prices are going to rise, they want to buy now.cheap investment property
"You get the anticipation effect, and we’ve seen some of that even before the policy [Help to Buy] actually kicked in."
The Help to Buy scheme offers support to borrowers wishing to take out 95 per cent mortgages, by assistant lenders with government guarantees.
The NIESR expects this to have an impact on the economy, contributing towards 1.4 per cent growth in 2013.
This is double the forecast of 0.7 per cent made in February.
The 2015 forecast is for per cent cent growth, again higher than February's 1.5 per cent prediction.
And house prices could go up by as much as five per cent on average, substantially up from the think tank's earlier 0.5 per cent forecast.
This increase could add as much as half a percentage point to consumer spending.
While the economy's output is expected to return to its pre-crisis peak in 2015, household savings are still expected to fall over the next couple of years, while real wage increases will not appear until at least 2018.
"Households may feel wealthier and may be spending more and borrowing more, but the consequence is household saving is falling – both this year and into next," said Simon Kirby, NIESR’s UK economist.
“GDP is expected to recover to its pre-recession peak in 2015. Real wages are not going to be anywhere near that,” he added.