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Hi guys and welcome to our first property news blog post of the year! The new year hasn’t started well with stock markets coming under severe pressure with the FTSE 100 being down by 5% (its worst start since the new millennium!). In addition, many analysts have predicted more doom and gloom this year (which we will cover in our first story). In China, this year is the year of the Monkey, and we certainly need people who have a huge amount of intelligence and wit (to help us feel a bit more cheery ahead of hard times), both intelligence and wit are associated with people who are born in that Chinese Zodiac year!
A Brief Insight Into The Property Market in 2016
In this country we always talk about property prices, however, this year there will be more to talk about the likes of stamp duty and landlords.
One thing that will happen in both England and Wales will be an increase in stamp duty – from April 2016, those who are seeking to buy a second home will have to pay a 3% surcharge on each stamp duty band.
The ramifications will therefore make things more expensive for second home buyers and also put off other potential buyers.
In addition, it will not only be second home buyers who will be having a tough time in 2016, buy-to-let landlords will also see their stamp duty rise and will also lose some of their tax privileges (which is already in the pipeline for next year).
As the BBC put it (in my opinion I think they are spot on) mention that who would have guessed that a Conservative government would take a dim view of buy-to-let landlords, just the sort of people supposed to be staunch Tory voters?
The irony is that what exactly has happened as we discovered in George Osbourne’s Autumn Statement.
Regulations such as the illegal immigrant regulation will give landlords even more nightmares (this regulation come into play on the 1st February), they will have to check that their tenants have the right to rent in the UK, if not, they face a £3,000 fine.
One analyst predicts that the first few months will be bumpy as some people will rush to purchase buy-to-let properties before higher stamp duty rates take effect. He also mentions that we will see some quite strong growth in prices, and expects to see prices fall for the next few months as that element of demand is taken out of the market. (BBC, January, 2016)
Salford Tops Property Sales In 2015
Salford topped the property sales leader board in 2015, a report which was compiled by Halifax, found that the number of property sales taking place in Salford has jumped by 23% this year compared with 2014, also Pontefract in West Yorkshire was ranked second with 20% of property sales.
The report indicated that many towns across Northern England, the Midlands and Wales saw house sale numbers increase, in contrast, the South saw many of the biggest falls in sales.
Below shows the proportions of property hotspots in regions across England and Wales according to Halifax’s research (stats taken from BT) :
- North 38%
- Yorkshire and the Humber 26%
- North West 29%
- East Midlands 2%
- West Midlands 20%
- East Anglia 4%
- Wales 39%
- South West 16%
- South East 15%
- Greater London 6%
Downsizing For One In Three Over-55s Are Dashed Because Of Lack Of Suitable Housing
One in three homeowners over-55 want to downsize but are being prevented by a lack of suitable housing, a report has warned. (Daily Mail, January, 2016)
Researchers found that over-55s hoped to move because smaller homes were easier to manage or because they wanted to release equity to boost savings or pension pots.
International Longevity Centre and retirement housing specialists McCarthy & Stone‘s ‘Generation Stuck’ report revealed that a third of over-55s were actively considering downsizing or expecting to do so in future.
Last year, the Financial Conduct Authority’s mortgage sector manager Lynda Blackwell said Britain had ‘a real problem with the last time buyer’ the Daily Mail mention.
What was particularly interesting to find out was that older people from the UK are among the least likely to move in the Western world. Figures from five years ago show that just 1 per cent of people aged 60 and over moved into retirement housing, compared with 17 per cent in The States and 13 per cent in Australia and New Zealand.
If you fit this age bracket and are looking for an alternative way to invest in property we recommend reading our case study section.
Image Source : Daily Mail
England’s 5,000 Biggest Landowners Are Being Asked To Free Up Land For Affordable Housing
The owners of 5,000 of the country’s largest rural estates hold the key to creating employment, economic growth and housing in areas of the country that are experiencing population decline, according to a recommendation from The Royal Institution of Chartered Surveyors (Rics). (Telegraph, December, 2015)
The call came as figures show that house prices increased at a rapid rate last month, and many have had concerns that a shortfall of new homes could push the growth in prices higher.
According to Sir Peter Erskine, who has built 22 affordable homes on his family’s Cambo estate in the East of Fife, Scotland, “the big estates are the solution to the depopulation of rural communities”. (Telegraph, December, 2015)
The area near to where his estate is situated has already lost a green grocer and post office, plus the local school has seen a decline in pupils. It clearly shows as Rics‘ head of policy, Jeremy Blackburn mentions that by adding Small amounts of affordable housing can make a huge difference to the viability of rural communities, building just ten units in 1,600 small and market towns in rural areas of the country would solve this rural housing crisis.
Sir Peter Erskine revealed that from experience landowners have dealt with an increasingly hostile political atmosphere and also been held back by high taxes but are willing to create opportunities to effect positive social change in their areas.
Image Source : Telegraph
Northern Property Hotspots For 2016
Last year Rightmove reported that the price tag for a house in London could rocket to an average of £1 million and this is largely down to high demand, cheap mortgages and a lack of accessible homes in the capital.
Investors are therefore heading north as many have discovered that reduce the amount they pay under the new stamp duty rates by purchasing lower entry level properties in northern areas.
Due to the rise of the Northern Powerhouse and having a very good entry level for investors, the north has rapidly become a very attractive place for those wishing to extend their property portfolios.
In addition, investing in student property have also been on the rise in the north, however, as Economic Voice mention, a recent study that sampled 2,000 UK adults by the specialist property company Experience Invest found that only 17 per cent of respondents said they’re aware that investing in student property can result in a high yield.
So what cities are leading the way in the north? Starting with Liverpool, the Merseyside city offers some of the highest returns in the UK due to being a place that has a high yield when it comes to rental income. With a big student population, Liverpool is an ideal place for property investors.
Manchester has always been another popular choice with investors and is arguably the best place in the North to invest due to being centred around the Northern Powerhouse concept. East and North Manchester have good rental yields and good low price properties. With this being such a vibrant and large city – properties can vary from back to back semis to modern city centre apartments. (Economic Voice, January 2016)
Moving our attention to Tyneside, Newcastle is another favourable place for returns. In some areas, there has even been a 50 per cent rise in rental values due to the massive cultural and business rejuvenation throughout the city. Just like Liverpool and Manchester, it also has a thriving student population which makes it another option for investors who are looking to head north.
Yorkshire cities such as Sheffield and Leeds both have an expanding population and the stamp duty is staggeringly low compared with London. Since both have an industrial past, the likes of warehouses and converted modern apartments are being snapped up.
Do you have an interest in the North? If you would like more information, feel free to take a look at our Manchester guides (North and Central), our Liverpool guide and also our South Yorkshire guide.
What Are Your Thoughts?
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