UK Property Market

LXI REIT PLC recently bought five properties in the country for £109 million. The trust bought Travelodge hotels in Scotland and Edinburg for £6.6 million, which provided a net initial yield of 5.4%. In addition, it bought a Jurys Inn hotel for £30 million. Earlier, it had acquired the car storage facility in Corby for £60 million.

It bought a store in Carlisle for £4.3 million. There are many different types of property available in the current UK housing market, and each option has its unique benefit and drawbacks. The products have different types of taxation rules and profitability potential. 

The current taxation rule on capital gains on the sale of real estate requires the person to pay the levy, which depends on the house's value. The taxes linked to buying property and stamp duty is widely known.

Such taxes apply to residential property of more than £125,000 and non –residential of the value of more than £150,000. It also includes the 3 per cent levy on an additional property or buy-to-let purchases. One can skip the stamp duty by flipping property of a value less than £125,000.

Growing Cities

The recent analysis by Knight Frank on 43 key cities of the world found Edinburg prices gained 10.6 per cent in the last 12 months, while it stands second to Singapore in delivering the highest growth in real estate.

Overall the prices grew 3.4 per cent in the country, but in London, the price dropped. In contrast, the available property rental dropped significantly in the capital to one-fifth in 2018 compared to the last year. However, the agents get tenants four days earlier than a year ago.

Government to scrap Help-to-buy

The help-to-buy option led to a rise in Homebuilder shares. Currently, prospective buyers are waiting for the government to announce schemes to help younger buyers. The government also scrapped stamp duty for shared property ownership below £500,000.

The taxes on commercial units such as the lower value stores are low, and steps such as support for small builders through housing infrastructure and bank guarantees can support smaller units. 

The government is also preparing to provide consultation on the additional taxes and stamp duties for commercial buyers.

The new loan origination in June 2018 was 27 per cent more in the first half of the year than in 2017, despite Brexit.

The government supports the plan to end Help to buy by 2023 as critics say such schemes led to an abnormal price rise. However, the treasury states the scheme will allow home buyers to buy new homes with a 5 per cent deposit for two years after 2021.

The government is preparing to end the Help to Buy loan scheme after 2023. The scheme supported one-third of private home buyers in the current year, using it to purchase 170,000 homes by March.

The government is expected to cap the prices in London to £600,000 for homes bought through the scheme; in the South East, the cap is set at £427,600, and in the North East, the cap is set at £186,100. In addition, the government plans to impose restrictions on the scheme to prevent artificial inflation in some markets.

To know more about UK properties, click Hamilton International Estates (www.hamiltoninternationalestates.com)