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The Chancellor should look again at the nation’s Stamp Duty thresholds, an archaic tax structure which is distorting the housing market, says RICS as part of its 2014 Pre-Budget statement.

The existing ‘slab’ Stamp Duty system taxes a percentage of a home’s purchase price according to which value bracket it happens to fall into. For instance, a buyer purchasing a property for under £250,000 would pay one percent of the price in tax, while a home sold for just one pound more would generate a tax bill of three percent. This means that many buyers are financially unable to venture above the threshold and vendors may have to price their home below what they may otherwise have sold it for. RICS believes that the government should consider a fairer, marginal rate to replace the current structure which sees few homes come onto the market at between £250,00 and £275,000 whether or not they are worth that price.

The government should also consider adapting Help to Buy to suit individual regions’ needs. Sixty percent of RICS members surveyed believe that adjusting the scheme on a regional basis would make the market more sustainable. Furthermore, half of those who are in favour believe that the funding should be limited purely to first time buyers. RICS would like to see the government reassess the scheme with a view to providing the relevant help according to an individual region’s needs.

Garden cities could prove a good means of boosting the supply of homes on the market. However, these cities need to be located in places where people are able and willing to live, close to sources of employment and the houses need to be affordable housing. To make the garden cities a reality the government needs to publish its outline prospectus to test the market by giving potential developers, communities and investors clarity and certainty.

While much progress has been made in recent years regarding empty property rates, unoccupied shops and offices that require refurbishment before being re-let are still subject to prohibitive business rate tax. This situation acts as a huge disincentive for landlords to ensure their premises are brought up to quality and environmental standards. RICS would like the government to consider a rate exemption period for these premises which would also result in more work for smaller, local construction firms, while helping the commercial property sector meet its April 2018 target of making buildings more environmentally sustainable.

Jeremy Blackburn, RICS Head of UK Policy, said:

“This is a very important Budget for the Chancellor and one which will shape the economy in the run-up to the general election. A major area of concern in the property sector, at present, is the current Stamp Duty system which is both out-of-date and distorts the market by taxing buyers disproportionately high amounts should they go just one pound over the pre-set thresholds. A more intelligent, modern way of taxing property sales is needed for a market which is changing at a rate of knots.

“We would also like to see George Osborne provide more detail as to exactly what is meant by new garden cities and precisely how they would benefit communities and the economy. Taxing landlords who renovate their empty shops and offices is also on burden on the economy and discourages owners from taking their premises out of circulation to meet environmental standards.”

kcm 016Farmland prices hit yet another record high in the South East during the final six months of 2013, having jumped over ten percent in the space of a year, says the latest RICS/RAU Rural Land Market Survey H2 2013.

During the second half of last year, the average cost of farmland in the region rose to £7,750 per acre*, hitting a record high for the eighth consecutive period. The cost of land is now 10.7 percent higher than during the same period in 2012 when an acre cost, on average, £7,000.

Growth in prices has been driven by the on-going surge in demand from farmers looking to expand their operations, while the amount of land coming up for sale is continuing to lag well behind, with the shortage being seen across the board. However, with many areas such as the Thames Valley having been subject to severe flooding in recent weeks, it remains to be seen what impact this will have on the price and saleability of farmland in some areas.

Despite remaining unchanged on the first half of the year, prices in the North West were the highest in Great Britain with the cost of an acre coming in at £8,813. Meanwhile, land north of the border, in Scotland, was the least expensive with an acre costing around £3,750.

Looking ahead, chartered surveyors are predicting prices to continue to rise over the coming year, given the significant supply-demand imbalance. That said, with floods having swept across the country, markets in the southern regions could well be significantly affected in terms of both transactions and prices.

Jeremy Blackburn, RICS Head of UK Policy, commented:
“Farmland price growth has been enormous in recent years. With commodity prices now having remained strong for some time, many farmers have been looking to expand their businesses and, with so little actually coming up for sale, competition for good land is fierce.

“Although, with floods having devastated large swathes of southern England, what remains to be seen is the impact this has on the market in these areas and further afield. It will not be surprising to see this have a negative effect on transactions. In fact, a lot of the best quality and highest value agricultural land in the UK is located close to rivers and on floodplains so this too could potentially have an impact on food production.”

See the report HERE

main copy.qxdHouse prices in the South East will see an increase of seven percent over the course of next year while the cost of renting a home should rise by a further two percent. This growth is being driven by the acute imbalance between burgeoning buyer demand and sluggish supply with new instructions to estate agents close to stagnating.

Although significant challenges remain to achieving a sustainable economic recovery, 2014 may well see the nascent pick-up in activity gather pace and this will be reflected in the housing market. In addition to rising prices, the number of transactions should also see a further increase, moving up to 1.2m (from 1.05m in 2013). Although this represents an improvement, to put this in context, total sales in 2006 were well above this at 1.67m.

With the shortage of homes coming onto the market a key factor behind the price rises, some comfort may be drawn from a likely twenty percent jump in new starts in England over the next year. That would push the total towards the 155,000 mark compared to 125,000 this year and only around 100,000 in 2012. While this is an encouraging trend, it is still insufficient to address the more rapid growth in population and will leave significant shortfalls in all tenures.

Across the UK, all parts of the country should see prices rise next year. Predictably, the biggest increases are to be seen in the capital, where the cost of a home will jump by around eleven percent. It remains to be seen what impact the recently announced increase in capital gains tax for overseas vendors will have on the prime central London market.

Meanwhile, the North East and Northern Ireland will experience the lowest rises with prices increasing by five percent and four percent respectively.

2014 UK housing market at a glance

UK REGION GROWTH

East of England ——————10
East Midlands———————10
London—————————-11
North East————————-5
Northern Ireland——————-4
North West————————-7
Scotland—————————7
South East————————-7
South West————————-7
Wales——————————7
West Midlands———————-7
Yorkshire and Humberside———–7
UK———————————8

• Cost of renting to grow by two percent
• Transactions to increase to 1.2 million
• Housing starts to edge up to 150,000 in England

Peter Bolton King, RICS Global Residential Director, commented:
“The cost of a house is now picking-up right across the country and next year should see more of the same. We expect all areas of the country to see prices increase with London, predictably, recording the biggest rises. The improving economic picture aside, this is largely down to the fact that buyer numbers considerably outweigh the amount of homes on the market. While the number of new homes being built is now on the rise, it still won’t be anywhere near enough to meet demand and we expect the problem of insufficient housing stock to be the main driver behind price increases over the next twelve months.”

Shoppers in Medway are being encouraged to take a trip down to their local market and discover the delicious, the fashionable and the bargains on offer.

The nationwide Love Your Local Market fortnight returns this week (15-29 May) part of a campaign run by the National Association of British Market Authorities championing market traders across the land. More

As the first door is opened on the advent calendar this weekend, Rochester’s streets will come alive with all the excitement and bustle of a Victorian Christmas.
Traditional entertainment, song and dance will be on offer at Rochester’s Dickensian Christmas festival from Saturday 1 to Sunday, 2 December, against the backdrop of the town’s unique mix of specialist shops, galleries and cafes. And there’ll be even more reason for festive cheer this year, as Medway’s celebrates the 200th anniversary of the great writer’s birth. More

WE HAVE JUST BEEN INFORMED THAT THIS EVENT IS NOW CANCELLED

02/03/12     13:01

Shoppers in Rainham will be able to sample some continental delights when a bustling market pitches up for business next month.

A traditional continental market with traders from France, Belgium, Italy, Spain, Holland, Poland and many more will be heading to Rainham Shopping Centre on Thursday, 22 and Friday, 23 March. More

A series of events are taking place across Medway in October to mark Black History month.

The annual festival, which is held nationally, celebrates diverse cultures and and traditions. In Medway it will include live music, story telling, circus tricks and specialist food events. More

One of the country’s oldest twinning arrangements will be celebrated in Medway next week (May 19-21) with a Taste of France coming to Chatham. More

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