Category: News

The sales market is currently strong but the Royal Institution of Chartered Surveyors has issued a warning about a slowdown next year when the stamp duty holiday ends.

“There is considerable concern about the prospect of a sharp slowdown in transaction activity following the end of the first quarter of the coming year” says Simon Rubinsohn, RICS chief economist.

“A scaling back in direct government support for the market is part of the reason for this but it is being compounded by expectations of material rise in unemployment as redundancy programmes begin to take effect. Meanwhile, there is little sense that the projected softer sales picture will feed through into pricing which is viewed as likely to prove rather stickier in the face of ongoing macro challenges” he continues.

The latest monthly RICS market snapshot – which is a sentiment index, reflecting surveyors’ views of demand, supply and prices – shows that the sale of homes continued to increase over November.

However, while demand rose for most of the UK “the pace of this growth does appear to be losing a bit of steam and slowing” says the institution.

Nationally a net balance of 27 per cent of surveyors told RICS they experienced an increase in new buyer enquiries during November, well down on the net balance of 42 per cent in October.

In addition, while precisely a quarter of responses saw an increase in agreed sales over the month, expectations for the year ahead remain negative with a net balance of 21 per cent of surveyors foreseeing weaker sales in the year ahead.

Regionally, agreed sales continued to rise across most areas, with Wales and Northern Ireland seeing particularly strong growth for November. However, respondents in the West Midlands, East Midlands and Scotland have started to report a flatter trend.

House prices saw significant upward pressure, with a net balance of 66 per cent of responses citing an increase; a net balance of 20 per cent of surveyors now envisage prices rising in 2021, a big rise from the eight per cent in October

Rubinsohn continues: “A key issue as government looks to continue to build the delivery pipeline will be the response of developers to a tougher market without the incentive of the stamp duty break and the tapering of the Help to Buy scheme.

“Critically, it is not simply a numbers game with the latest price moves highlighting ever more acute affordability issues and the importance of ensuring adequate provision across tenures.”

The sales market is currently strong but the Royal Institution of Chartered Surveyors has issued a warning about a slowdown next year when the stamp duty holiday ends.

“There is considerable concern about the prospect of a sharp slowdown in transaction activity following the end of the first quarter of the coming year” says Simon Rubinsohn, RICS chief economist.

“A scaling back in direct government support for the market is part of the reason for this but it is being compounded by expectations of material rise in unemployment as redundancy programmes begin to take effect. Meanwhile, there is little sense that the projected softer sales picture will feed through into pricing which is viewed as likely to prove rather stickier in the face of ongoing macro challenges” he continues.

The latest monthly RICS market snapshot – which is a sentiment index, reflecting surveyors’ views of demand, supply and prices – shows that the sale of homes continued to increase over November.

However, while demand rose for most of the UK “the pace of this growth does appear to be losing a bit of steam and slowing” says the institution.

Nationally a net balance of 27 per cent of surveyors told RICS they experienced an increase in new buyer enquiries during November, well down on the net balance of 42 per cent in October.

In addition, while precisely a quarter of responses saw an increase in agreed sales over the month, expectations for the year ahead remain negative with a net balance of 21 per cent of surveyors foreseeing weaker sales in the year ahead.

Regionally, agreed sales continued to rise across most areas, with Wales and Northern Ireland seeing particularly strong growth for November. However, respondents in the West Midlands, East Midlands and Scotland have started to report a flatter trend.

House prices saw significant upward pressure, with a net balance of 66 per cent of responses citing an increase; a net balance of 20 per cent of surveyors now envisage prices rising in 2021, a big rise from the eight per cent in October

Rubinsohn continues: “A key issue as government looks to continue to build the delivery pipeline will be the response of developers to a tougher market without the incentive of the stamp duty break and the tapering of the Help to Buy scheme.

“Critically, it is not simply a numbers game with the latest price moves highlighting ever more acute affordability issues and the importance of ensuring adequate provision across tenures.”

The UK has topped the rankings for the highest property taxes as a percentage of overall taxation in the developed world for the second year running.

Just as Chancellor Rishi Sunak appears to be resisting calls for an extension to the stamp duty holiday, and may be considering hiking capital gains tax in next spring’s Budget, so figures from the Organisation for Economic Co-Operation and Development show how heavily taxed the UK property sector is already.

Including both residential and commercial taxes, revenues to HM Treasury from property hit £90.6 billion during the financial year for 2019/20. This is up from £88.4 billion in the previous period.

And according to the OECD, the UK has seen the highest property taxes in six of the last 10 years.

The calculation is based on all resi and commercial property taxes – council tax receipts, business rates and stamp duty, plus the equivalent levies in Scotland and Wales.

The period under review includes only a short time during which estate agencies and other businesses in the UK were given a business rates holiday this year due to Coronavirus, and the figures do not cover the stamp duty holiday period.

Total overall tax revenues for 2019/20 rose to £731.1 billion in the UK, up £25.9 billion on the previous financial year, with property taxes in the UK accounting for 12.4 per cent of overall taxation – so almost exactly £1 in every £8 of all taxes collected.

Second place was the US with 12.1 per cent then Canada (11.6 per cent), South Korea (11.4 per cent) and Israel (10.1 per cent).

Meanwhile the financial services trade body, UK Finance, is the latest group to voice concern over what may happen to the housing market when the current stamp duty holiday ends on March 31.

Its latest Household Finance Review shows that house purchase lending recovered strongly in the third quarter of 2020, with some months seeing activity almost back to the levels seen a year ago.

It forecasts house purchasing to be strong in the first quarter of 2021 as buyers take advantage of the holiday.

However, beyond that point demand is likely to come under pressure, it adds.

The UK has topped the rankings for the highest property taxes as a percentage of overall taxation in the developed world for the second year running.

Just as Chancellor Rishi Sunak appears to be resisting calls for an extension to the stamp duty holiday, and may be considering hiking capital gains tax in next spring’s Budget, so figures from the Organisation for Economic Co-Operation and Development show how heavily taxed the UK property sector is already.

Including both residential and commercial taxes, revenues to HM Treasury from property hit £90.6 billion during the financial year for 2019/20. This is up from £88.4 billion in the previous period.

And according to the OECD, the UK has seen the highest property taxes in six of the last 10 years.

The calculation is based on all resi and commercial property taxes – council tax receipts, business rates and stamp duty, plus the equivalent levies in Scotland and Wales.

The period under review includes only a short time during which estate agencies and other businesses in the UK were given a business rates holiday this year due to Coronavirus, and the figures do not cover the stamp duty holiday period.

Total overall tax revenues for 2019/20 rose to £731.1 billion in the UK, up £25.9 billion on the previous financial year, with property taxes in the UK accounting for 12.4 per cent of overall taxation – so almost exactly £1 in every £8 of all taxes collected.

Second place was the US with 12.1 per cent then Canada (11.6 per cent), South Korea (11.4 per cent) and Israel (10.1 per cent).

Meanwhile the financial services trade body, UK Finance, is the latest group to voice concern over what may happen to the housing market when the current stamp duty holiday ends on March 31.

Its latest Household Finance Review shows that house purchase lending recovered strongly in the third quarter of 2020, with some months seeing activity almost back to the levels seen a year ago.

It forecasts house purchasing to be strong in the first quarter of 2021 as buyers take advantage of the holiday.

However, beyond that point demand is likely to come under pressure, it adds.

Another day, another house price record as the bull market continues.

The latest Halifax index shows prices surging 7.6 per cent to £253,243 in the year to the end of November, with the market in recent months at its strongest since 2004.

The biggest growth of this year has been since the market reopened after the Spring lockdown; prices since June have risen an average £15,000 or 6.5 per cent in six months.

Interestingly, for many these price rises have more than wiped out the typical savings from the stamp duty holiday.

Halifax managing director Russell Galley says: “With mortgage approvals at a 13-year high, the current market continues to be shaped by a desire for more space, the move from urban to rural locations and indications of a trend for more home working in the future.

“And while industry data shows agreed sales and new instructions to sell fell to their lowest level in the past five months, both remain at historically high levels and well above seasonal norms.”

Galley says the 7.9 per cent rise is spurred by the stamp duty holiday, although he says: “The stamp duty saving of £2,500 on a home costing £250,000 is now far outweighed by the average increase in property prices since July.

“The housing market has been much more resilient than many predicted at the outset of the pandemic, and indeed many households remain confident about further price growth next year.

“However, the economic environment continues to look challenging. With unemployment predicted to peak around the middle of next year, and the UK’s economy not expected to fully recover the ground lost over 2020 for a number of years, a slowdown in housing market activity is likely over the next 12 months.”

North London estate agent and former Royal Institution of Chartered Surveyors residential chairman Jeremy Leaf says: “These latest figures show how resilient the housing market has been even at a time of further Covid restrictions and economic concerns. However, activity has reduced since, as Christmas is proving an even greater distraction.

“There is no real sign that home buying and selling won’t resume in the early new year, albeit at a slightly slower pace as the prospects of taking advantage of the stamp duty holiday recede.

“There have been few withdrawals from previously-agreed sales and prices are holding up well, supported by the continuing shortage of the right properties at the right prices in the right locations.”

David Westgate, group chief executive at Andrews Property Group, adds: “House prices continue to rise but the market will have its work cut out in 2021 as the economic impact of the pandemic and potentially Brexit kicks in.

“The stamp duty holiday ignited already strong post-lockdown demand and this, coupled with the desire of many people to relocate away from major cities in search of outdoor space, has driven prices higher.

“House price growth will almost certainly moderate in the first quarter and values will come under pressure if unemployment starts to rise sharply as expected.

“The number of major high street firms collapsing suggests house prices are in for a tough 2021. At lower loan to values, we’re not expecting the market to grind to a halt but for first time buyers and anyone with a smaller deposit it’s going to be challenging next year.”

Another day, another house price record as the bull market continues.

The latest Halifax index shows prices surging 7.6 per cent to £253,243 in the year to the end of November, with the market in recent months at its strongest since 2004.

The biggest growth of this year has been since the market reopened after the Spring lockdown; prices since June have risen an average £15,000 or 6.5 per cent in six months.

Interestingly, for many these price rises have more than wiped out the typical savings from the stamp duty holiday.

Halifax managing director Russell Galley says: “With mortgage approvals at a 13-year high, the current market continues to be shaped by a desire for more space, the move from urban to rural locations and indications of a trend for more home working in the future.

“And while industry data shows agreed sales and new instructions to sell fell to their lowest level in the past five months, both remain at historically high levels and well above seasonal norms.”

Galley says the 7.9 per cent rise is spurred by the stamp duty holiday, although he says: “The stamp duty saving of £2,500 on a home costing £250,000 is now far outweighed by the average increase in property prices since July.

“The housing market has been much more resilient than many predicted at the outset of the pandemic, and indeed many households remain confident about further price growth next year.

“However, the economic environment continues to look challenging. With unemployment predicted to peak around the middle of next year, and the UK’s economy not expected to fully recover the ground lost over 2020 for a number of years, a slowdown in housing market activity is likely over the next 12 months.”

North London estate agent and former Royal Institution of Chartered Surveyors residential chairman Jeremy Leaf says: “These latest figures show how resilient the housing market has been even at a time of further Covid restrictions and economic concerns. However, activity has reduced since, as Christmas is proving an even greater distraction.

“There is no real sign that home buying and selling won’t resume in the early new year, albeit at a slightly slower pace as the prospects of taking advantage of the stamp duty holiday recede.

“There have been few withdrawals from previously-agreed sales and prices are holding up well, supported by the continuing shortage of the right properties at the right prices in the right locations.”

David Westgate, group chief executive at Andrews Property Group, adds: “House prices continue to rise but the market will have its work cut out in 2021 as the economic impact of the pandemic and potentially Brexit kicks in.

“The stamp duty holiday ignited already strong post-lockdown demand and this, coupled with the desire of many people to relocate away from major cities in search of outdoor space, has driven prices higher.

“House price growth will almost certainly moderate in the first quarter and values will come under pressure if unemployment starts to rise sharply as expected.

“The number of major high street firms collapsing suggests house prices are in for a tough 2021. At lower loan to values, we’re not expecting the market to grind to a halt but for first time buyers and anyone with a smaller deposit it’s going to be challenging next year.”

A new survey of prime London property shows 21 per cent of homes on sale have had their asking prices cut – sometimes dramatically.

Specialist mortgage broker Enness Global looked at stock levels across London’s most highest value neighbourhoods for homes at £3m and above.

It then analysed what percentage of these homes had seen the asking priced reduced in order to secure a buyer.

Across London, 21 per cent of all properties at £3m or above have seen a reduction.

Maida Vale is the area with the highest share of reductions – 38 per cent.

Hampstead, St James’s and Pimlico also rank high with 31 per cent of prime property stock reduced.

However, Soho and Fitzrovia both saw fewer than 10 per cent of properties cut asking prices.

“A combination of Brexit uncertainty and the current pandemic has seen many sellers reduce their asking price expectations in order to secure a sale” says Islay Robinson of Enness Global.

“When you couple this with the current stamp duty savings on offer and the weaker pound, the prime London market presents a very attractive option at present.

“Of course, not everywhere presents a property discount and those with the smallest percentage of price-reduced properties indicate where the London market is currently at its hottest where high-end homebuyer demand is concerned.”

A digital resource hub for estate agents launches a new product today, claiming to shorten transaction times.

Sort Move, which has been operating for the past year, claims its new Fast-Start service allows sellers to become ‘Sale Ready’ by completing conveyancing paperwork online as soon as a home goes on the market.

The product allows clients to fill in documents via a desktop, tablet or mobile device. It also packages Biometric ID and AML checks, as well as digital signatures on all completed paperwork.

The product has undergone beta-testing with some agencies whose testimonies have been released to the media.

“This enables sellers to sign up as soon as they put their property on the market, complete ID checks and preliminary forms and paperwork to be ‘contract ready’ as soon as a buyer is found” says Nicholas Webber of Westcoast properties.

“I can do these quotes, tailor them to each client, include my own branding and offer them a unique platform. I love the updates I get for sales going through and also the incentive is very good for each file completion” according to Leanne Fuller O’Grady of Fuller O’Grady estates.

Sort Move – created by Sort Ltd, which works in the mortgage intermediary market – describes itself as “a digital portal specifically with estate agents and their clients in mind.”

It says its products “add value to the customer journey and provide another income stream for the agent, through fair and transparent referral fees. These products are backed up by a hand-picked panel of quality conveyancers, seamless partner integrations and a support team of home move advisers.”

Today sees the government’s Spending Review, with Chancellor Rishi Sunak taking centre stage as he presents a 12 month spending plan to MPs.

Although traditionally such spending reviews are not opportunities to change taxes – that’s reserved for the annual Budget, which is not scheduled until next year – there has nonetheless been widespread speculation about possible reform of the Capital Gains Tax system.

Now industry commentator and property management company owner David Alexander is calling on Sunak not to tackle CGT, which could risk “unmprecedented negative impact” on not just the rental sector but the wider housing market.

A recent report commissioned by Sunak advocated CGT rises to match income tax rates.

Alexander argues that for investors, given their additional stamp duty costs, such a CGT change would effectively deter future purchases.

“While the Spending Review is not the time when the Chancellor will announce any tax hikes it is clear from the Treasury’s messaging over the last week that increases are coming next year” he says.

“CGT seems set to be top of the list for substantial increases and there is little doubt that landlords, second home owners and property investors are firmly in Rishi Sunak’s sights. He sees this as an easy target politically and financially. Unlike many other assets property can’t hide and as CGT affects a relatively small part of the population it looks like an easy fix for the enormous debt accrued during the pandemic.”

Alexander is warning that if Sunak widens the take and breadth of CGT the number of people liable will rise and landlords with one or a small number of properties will be drawn into the tax.

“The targeting of the tax may have unintended consequences. Equally he will understand that simply increasing a tax by a certain percentage rarely results in a directly comparable increase in revenues. The larger institutional investors will always have the option of shifting their investments elsewhere either geographically or into a different asset class resulting in a lower tax take” he warns.

Alexander says larger investors may be able to absorb the changes, or use their accountants to minimise the disadvantage, but that would not apply to smaller scale investors who have purchased one or two buy to lets.

And he warns: “A property used to shore up retirement funds, or care home fees, could suddenly be hit by a tax which is imposed with little warning, on a sector that is exposed, at a time when the market is potentially fragile.”

Agents should know in the next 36 hours how new Coronavirus restrictions will affect how they work.

The Prime Minister is announcing tougher Tier restrictions to operate from the end of the England lockdown on December 2.

Under the current England-wide lockdown agents have been able to work in branches but without widespread visits from members of the public; sales and house moves have gone ahead, under existing social distancing and safety guidelines.

10 Downing Street has already confirmed ahead of Boris Johnson’s announcement that after December 2 more areas of England are set to be placed into higher tiers than before to keep the virus under control, with specific tier rules strengthened to safeguard progress on reducing the infection R rate achieved during the lockdown.

It is not yet clear exactly how restrictions could affect the housing market, although the Ministry of Housing, Communities and Local Government says this is likely to be set out later today or tomorrow.

Changes made to the overall Coronavirus restrictions will be discussed in Cabinet again this morning and then announced to MPs today or tomorrow; later this week the proposals will be voted on by Parliament.

The BBC suggests that the key verdict on which areas of the country will fall into which Tiers will be revealed on Thursday of this week.

In Scotland over the weekend some areas moved into what the Scottish Government calls Level 3 and Level 4 measures.

Under those, house moves and other activities related to the property market can continue but must be carried out safely, referring to that country’s Coronavirus guidance at all times.

At Level 4 people can work in other people’s homes, but this should only be to provide essential services, which can include an estate agent visiting or a house move going ahead.

However this is only if the occupier is well and is not showing Coronavirus symptoms and neither they nor any of their household is self-isolating. Social distancing must also be observed.

NAEA Propertymark says: “In [Scottish] areas at Level 4, tradespeople can continue to work in other people’s homes, but should only provide essential services including urgent repairs and maintenance, and work to support a home move, for example, furniture removal.”