Summer 2010 Comment
With summer upon us and the election now out of the way, only the ash cloud can darken the summer mood! Stacks Property Search & Acquisition will continue to work hard on our clients behalf throughout the impending World Cup and what we hope will be a long hot summer.
Headlines continue to confuse rather than elighten with newspapers talking of booming houseprices while the CML confirm that lending has fallen back (Arpril 2010) and was 6% lower than the first four months of 2009. What is clear, is that the range of mortgage products remains at a fraction of previous levels and LTV of over 75% still scarce. Low interest rates, however, continue to encourage property transactions, and a weak pound is encouraging overseas buyers. Lack of supply of quality properties in sought after locations ensure that some properties are fetching strong premiums. An increase in supply should see the market stabilise over the rest of the year providing a good opportunity tio buy and no reason not to sell.
Statistics suggest Edinburgh house prices have risen by around 12% in the year to March 2010. I suspect few typical Edinburgh homes have actually increased by this much. A glance behing the headlines would reveal that the volume of properties traded remained at around 1/3 of the longer term trend and those properties which did change hands tended to be at the higher end of the Edinburgh market. The value of the average transaction may therfore have risen considerably while the price of any given home could, in theory, be almost static. Statistics certainly have their use but a closer look at property types and area specifics is essential before embarking on any purchase.
Coalition government and CGT
Proposals which could effectively double capital gains tax have been suggested in advance of the coalition governments emergency budget on 22nd June. the proposals remain vague at present but the coalition partners are seeking “…agreement on taxing non-business capital gains at rates similar or close to those applied to income…” It is most likely that whatever changes are proposed will take effect from 6th April 2011, but earlier application cannot be ruled out. The treasury could certainly benefit from a windfall of CGT if transactions are undertaken simply to realise gains at the present rates. The current favourable status of the main residence is not proposed to be altered. These proposals will require some thought for Buy-to-Let investors and second home owners. Any unrealised gains can potentially be managed in the coming months. Anyone concerned should contact their tax advisor.
One slightly novel solution might be to invest more when deciding on your main residence, something Stacks would be delighted to assist you with.
