We are still none the wiser on what will happen come 23 June. Whether we will stay or whether we will go. The same can be said whether there would be any impact on the property market.
In our previous blog, Europe: Should we stay or should we go? we highlighted that, from history, during any pre-election period, the property market stalls, and nothing scares it more than uncertainty.
A report from the Royal Institute of Chartered Surveyors showed 80% of its members believed that the uncertainty has held back investment. Combined with high UK property values, this has built up demand ready to react. However, this uncertainty, from experience opens up other opportunities and for one, the rental market is still strong.
A recent article in The Telegraph states foreign property investors are lining up to buy up property should the UK vote in favour of an exit. It says there would be a sharp drop in the value of the pound which will make assets cheaper for overseas buyers. This of course is rather ironic given the emphasis of the leave campaign which is against any foreign influence.
However, the article also states, that any exit would follow a two year period of real uncertainty whilst the government and businesses renegotiate trade agreements. It also forecasts that property companies will have to close offices due job losses and research shows this fear is genuine.
With the vote being only a week away, it is evident the the expert talk has not changed much since we last wrote on the EU referendum. One thing is for certain though, where there may be a problem, there will certainly be an opportunity.
Our first exhibition at The property Investor & Homebuyer Show at the Excel in London was a huge success! Launching the amazing Club Quarters development in Bang Saray, Thailand, the two days provided us with a great opportunity to sell the development, get the Estateology name out, and connect with like-minded people.
To our amazement we were kept on our feet for the whole two days as we were flooded with interest in this amazing development. Offering the best return of any investment at the show (10% over five years), for as little as £25,000 for a studio apartment, it was little wonder why so many people were interested!
Bang Saray is one of the fastest growth areas in Thailand. With the likes of M&S and Tesco already present, and many more well known brands arriving soon, it is obvious why people are investing in the area. Offering flexible purchase options, Club Quarters is a fantastic development, which is a totally hands-off investment, comes fully furnished, guarantees you a 10% return over five years, and gives you the option to stay at your apartment for up to two weeks a year!
With offers still to be had, please take a look at our brochure and price list. You can also watch a video of the development. If you prefer to speak to us, we would be more than happy to talk, please give us a call on 0203 422 2333!
The Chancellor announced the 2016 Spring budget on 16 March. There wasn’t any real surprises as there had already been much debate on possible implications for the property market. Here are some of the key messages.
Stamp Duty
It was confirmed that large scale investors of buy-to-let properties will pay the 3% stamp duty surcharge on investment properties and second homes from April 2016. It is not envisaged that this will significantly affect the buy to let market as the main main objective of investors will be long term capital growth.
Capital Gains Tax
For those investing in commercial property, there was welcome news as the chancellor announced a reduction in capital gains tax from 28% to 20%. This means the sale of commercial property will now be taxed at the lower rates and this could mean an increase in commercial property sales. However this does not apply to for investors who are selling residential property. Landlords will continue to be hit by 28 per cent capital gains tax bill when they sell.
If you own commercial properties and are looking to sell or need some sound advice, please contact our commercial property specialist Sam Samad on 0203 422 2333 or at sam.samad@estateology.com.
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For cash-strapped Londoners who want to get on the property ladder, the Help to Buy scheme (covering homes valued up to £600,000) has now been made available until 2021.
Last November, the Government doubled the size of the equity loan available, from 20 per cent to 40 per cent of the home’s value. In total the Government has made an extra £2.3 billion worth of funding available. This has meant the salary needed to buy an average-price two-bedroom London property worth £465,000 came down from £56,000 to £36,000 per year. A considerable amount, which has unsurprisingly seen an increase in demand for homes across London.
Previously, buyers were faced with the near on impossible task of having to put down larger deposits as salaries were too low for lenders to approve the 75% mortgage. Interestingly, developers are reporting more than a third of sales are now backed by the Help to Buy scheme, and this is expected to increase. Importantly, lenders are launching Help to Buy mortgages with rates as low as 1.59 with offers of free legal and survey fees. As a buyer it makes sense to act quickly, especially as house prices are expected to continue upwards this year.
Although the scheme does not apply to all new housing developments, the £600,000 price ceiling alongside the 40 per cent interest-free loan has opened up the market in all travel zones. East London is where most new homes are being built and many homes are within the budget of first-time buyers. Buyers should look out for developments in Stepney, Bow, Poplar and even Hoxton!
For more on how the scheme works and areas to look out for, click here.
Source: http://www.homesandproperty.co.uk/
We know the UK’s EU referendum will take place before the end of 2017, but the Prime Minister is keen to make it happen as soon as possible with June or September 2016 looking likely.
So how will the build-up to the referendum and the event itself impact the UK property market?
Before any such major event, where the economy is likely to be impacted, there is always uncertainty in the property market amongst buyers and sellers. History also shows that the build up to general elections creates a lull in activity. We anticipate buyers and sellers to take stock and eagerly monitor developments. However the UK, and particular London, has always been a draw to the foreign investor.
Research shows a mixture of opinion amongst the UK public as to whether house prices would rise or fall should the UK vote to leave the EU. Credit Suisse believe in the event of a vote to leave, house prices would fall slightly. In the medium term thereafter, there would be a drop in housing demand because of lower immigration and the UK’s changed status as a financial hub.
Forecasts of the UK economy in general if there was an exit from the EU are stating a stagnation in growth. However, since the UK has been part of the EU, the average UK house price has increased by more than 2,000%. Based on this, it seems the EU has been good for the UK property market.
The property market is just one of the sectors being debated in the run up to the EU referendum and there will be other socio-economic factors which will impact the UK economy in general. But one thing is for sure, the upcoming EU referendum presents a very interesting conundrum.
It is no secret that the London underground structure has been struggling to cope with its 1.1 billion passenger journeys every year. However this will not last as Europe’s largest construction project will bring significant relief in 2018.
Presented in 2009 to provide services for London and South East England, the Crossrail project will connect 40 stations along a 100 kilometre route between Reading in the West and Shenfield in the East. With a budget of 15.9 billion pounds, the project will significantly shorten travel times by cutting through key commuter towns, Canary Wharf and Heathrow airport. It will allow approximately 1.5million to reach the centre of the city within 45 minutes.
There will be 24 trains running per hour meaning a train every two and half minutes. The carriages, will be 200 meters long and can carry 1500 commuters at one time, equating to 200 million passengers per year. As of summer 2015 the project was 65% complete and is on schedule with an estimated completion date of December 2018. It is predicted that the project will benefit the UK economy by 42 billion pounds and will be a significant factor in the growth of the property market in the next few years.
The impact has already seen a rise in property prices. Since 2013 they have risen 25% in locations that are 10 minutes walk from future Crossrail stations. Some locations saw a significantly higher increase, these areas include; Gidea Park which saw a 49% increase, Custom House 46%, Forest Gate 35% , Abbey Wood 34% and Stratford, which saw a 34% increase. Canary Wharf, has seen a dramatic effect in purchasing with levels increasing by 65%. Developers have already gained planning permission for an additional of 10,000 flats in the area with residents number growing by 3.6% per year.
The good news, there are great opportunities to buy before other Crossrail areas see growth. If you’re interested and want to benefit from this, then please call us on 020 3422 2333.
Thanks also to Abu and his team for taking their time often to listen to my concerns about the flat and potential tenants even late in the evening when we'd all rather be at home forgetting about work after a hard day's work.
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