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Families escape to the countryside as first-time buyers return to the cities 

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Families are escaping to the country and coast, while first-time buyers are returning to cities, according to new data on what buyers want as the property market booms.

It is the latest evidence of shifts in the buyer behaviour amid the coronavirus pandemic and lockdowns, with families chasing suburban, seaside and village life and first-time buyers trying to take advantage of weaker city centre housing markets.

While families tend to be seeking more space at home and outdoors, first-time buyers are looking to set up home in urban areas, a pair of studies from property portals Zoopla and Rightmove show.

This three-bedroom house in Scarborough is for sale for £380,000 via estate agents Reeds Rains

This three-bedroom house in Scarborough is for sale for £380,000 via estate agents Reeds Rains

GROWTH IN DEMAND FOR TWO AND THREE-BEDROOM HOUSES
Rank Local Authority Region Demand growth for 2 & 3 bed houses* Average value of 2 and 3-bed house
1 Scarborough Yorkshire and the Humber 142% £197,000
2 Weymouth and Portland South West 115% £235,000
3 Forest Heath Eastern 111% £227,000
4 Falkirk Scotland 108% £142,000
5 Basingstoke and Deane South East 103% £320,000
6 Gosport South East 102% £238,000
7 Reading South East 97% £311,000
8 Harrow London 94% £578,000
9 Worcester West Midlands 86% £201,000
10 Redditch West Midlands 85% £219,000
Source: Zoopla       
* Demand growth for two and three-bed houses – eight weeks from 08/03 vs previous eight weeks 

First-time buyers are being bolstered by the launch of the Government-backed 5 per cent deposit mortgage guarantee scheme, while more families are heading out house hunting as coronavirus restrictions ease, the reports said.

Zoopla said there has been a 25 per cent increase in buyer demand in the past two months, after schools reopened.

It defined buyer demand as people who are actively viewing and engaged in finding out more about a property, such as through calls and emails to agents.

The property website said the rise was amplified by the announcement that the stamp duty holiday would be extended, along with the rapid vaccine rollout.

It said that two and three-bedroom homes – which are perfect for families – remain in strong demand across Britain, with the seaside resort of Scarborough seeing a 142 per cent increase in demand for such homes, the biggest of any area.

For four and five-bedroom properties, commuter favourite Cambridge tops the list with a huge increase in demand of 182 per cent. 

While property prices for two and three-bedroom properties in Scarborough are above the regional average, home hunters do get more bang for their buck with the Zoopla data showing that houses in this area are typically more spacious than those in other parts of Yorkshire.

There is no such luck in Cambridge, where the average home costs £685,000, but with its easy access to London and wide range of Ofsted-rated Outstanding schools, Zoopla said it is easy to see why the demand for family homes has been boosted by the return to school. 

At the same time, separate research from Rightmove suggested that city-centre living is staging a comeback, with buyer demand for flats increasing by 39 per cent since January.

York, Norwich, Sheffield, Birmingham, Glasgow, Cardiff and Manchester are among the cities that have experienced buyer demand in their centres increasing since the start of 2021, it said.

It added that while larger family homes have tended to be the strongest performers in the housing market over the past year, the focus is now shifting to flats.

This two-bedroom house in Weymouth is for sale for £237,000 via estate agents Austin Estate

This two-bedroom house in Weymouth is for sale for £237,000 via estate agents Austin Estate

Zoopla said that overall demand is highest in areas with house prices that are below the regional average.

Picturesque Weymouth and Portland, located at the southern tip of the Jurassic Coast, has seen demand for two and three-bedroom homes soar by 115 per cent since the reopening of schools.

Average prices in this area for this property type stand at £235,000, 15 per cent below the regional average in the South West.  

It is a similar case in Forest Heath, Suffolk where demand has increased by 111 per cent, and Falkirk in Scotland at 108 per cent, the latter of which is consistently one of the fastest moving property markets in Great Britain.

All these areas offer great value for money, with prices well below the regional average.

GROWTH IN DEMAND FOR FOUR AND FIVE-BEDROOM HOUSES
Rank Local Authority Region Demand growth for 4 & 5 bed houses* Average value of 4 and 5-bed house
1 Cambridge Eastern 182% £685,000
2 Angus Scotland 104% £276,000
3 Hastings South East 92% £416,000
4 Watford Eastern 87% £771,000
5 Wyre Forest West Midlands 81% £332,000
6 Stroud South West 80% £397,000
7 Horsham South East 79% £644,000
= Surrey Heath South East 79% £699,000
9 Teignbridge South West 76% £411,000
10 Stratford-on-Avon West Midlands 73% £517,000
Source: Zoopla       
* Demand growth for four and five-bed houses – eight weeks from 08/03 vs previous eight week 
This five-bedroom house in Cambridge is for sale for £675,000 via estate agents Sharman Quinney

This five-bedroom house in Cambridge is for sale for £675,000 via estate agents Sharman Quinney

Most locations that have seen the largest increase in demand for four and five-bedroom homes are located in rural or coastal areas.

Scenic areas in the South East – including Hastings at 92 per cent, Horsham at 79 per cent and Surrey Heath at 79 per cent – feature strongly.

In the South West, Stroud and Teignbridge feature in the top 10, with an increase in demand of 80 per cent and 76 per cent respectively.

Stroud is located near The Cotswolds and has good quality schools and green spaces. Meanwhile,

Teignbridge encompasses a wide range of pretty towns and villages, part of the Dartmoor National Park and coastline.

Other rural areas that feature in the list include Wyre Forest and Stratford on Avon in the West Midlands, well known for being the birthplace of Shakespeare.

Both areas have seen an increase in demand for four and five-bedroom homes at 81 per cent and 73 per cent respectively. 

This four-bedroom property for sale in Tiwckenham is for sale for £1,100,000 via estate agents Sne

This four-bedroom property in Twickenham is for sale for £1,100,000 via estate agents Snellers

GROWTH IN DEMAND FOR TWO AND THREE-BEDROOM HOUSES IN LONDON
London Borough Demand growth for 2 & 3 bed houses* Average value of 2 and 3-bed house
Harrow 94% £578,000
Bexley 82% £429,000
Merton 63% £539,000
Source: Zoopla     
* Demand growth for two and three-bed houses in London – eight weeks from 08/03 vs previous eight week

Zoopla suggested that there has also been an increase in demand for family homes in London.

Demand has increased most for two and three-bedroom houses in Harrow, which is up 94 per cent, Bexley at 82 per cent and Merton at 63 per cent.

These boroughs have become particularly popular among families seeking houses in the capital at more affordable prices, Zoopla said.

The largest growth in demand for four and five bedroom homes is in leafy Sutton at 57 per cent and Richmond upon Thames at 50 per cent, followed by Kensington and Chelsea at 50 per cent.

Gráinne Gilmore, of Zoopla, said: ‘The reopening of schools in early March was a key moment for the residential property market, alongside the extension of the stamp duty holiday, with buyer demand rising by some 25 per cent in March and April compared to the first two months of the year.

‘The data signals that in more affordable areas buyer interest is rising for two and three-bedroom houses. On the other hand, buyer demand is rising at the highest rates for four and five-bedroom houses in the areas where these homes are typically larger than the average signalling that a need for additional space is a factor driving interest in this segment of the market.’

GROWTH IN FOUR AND FIVE-BEDROOM HOUSES IN LONDON
Rank Local Authority Region Demand growth for 4 & 5 bedroom houses Average value of 4 and 5-bed house
1 Cambridge Eastern 182% £685,000
2 Angus Scotland 104% £276,000
3 Hastings South East 92% £416,000
4 Watford Eastern 87% £771,000
5 Wyre Forest West Midlands 81% £332,000
6 Stroud South West 80% £397,000
7 Horsham South East 79% £644,000
= Surrey Heath South East 79% £699,000
9 Teignbridge South West 76% £411,000
10 Stratford-on-Avon West Midlands 73% £517,000
Source: Zoopla       
* Demand growth for four and five-bed houses – eight weeks from 08/03 vs previous eight week
INCREASE IN BUYER DEMAND BY PROPERTY TYPE – APRIL 2021 V JANUARY 2021
Property type Change in buyer demand April 2021 vs Jan 2021
Flat 39%
Bungalow 30%
Detached house 26%
Terraced house 24%
Semi-detached house 23%
Source: Rightmove   

Rightmove also measured buyer demand by the number of people contacting estate agents to request more details about a property for sale on its website.

The easing of coronavirus restrictions and the recent introduction of the Government-backed 5 per cent deposit mortgage guarantee scheme are said to be helping to boost demand.

A Rightmove survey of more than 1,000 first-time buyers found that nearly one in five – at 17 per cent per cent – are planning to use the mortgage guarantee scheme or are already using it.

The study also indicated that while the desire to move to a quieter location has been driving parts of the housing market during the past year, this is not as appealing to first-time buyers.

While more than a quarter – at 28 per cent – of existing homeowners planning to move in the next 12 months cited a move to the countryside or coast as their motivation, only 10 per cent of first-time buyers were considering doing this.

Rightmove’s housing expert Tim Bannister said: ‘These are early signs but they certainly point to some good news for city centres across Britain, with a number of agents now telling me they’ve seen a marked uptick in demand from first-time buyers, and they’re managing to sell city-centre flats more quickly than in earlier months of the year.

‘People starting to venture in to their local high streets and once again experiencing the buzz of their city centres, along with greater mortgage availability for first-time buyers, means city centres are staging a much-needed comeback in the market.

‘Right now some buyers are able to grab a relative city bargain compared to the heady price growth outside cities, but these early signs of demand could be the start of city prices rising again.’

INCREASE IN BUYER DEMAND – APRIL 2021 V January 2021
City centre Change in buyer demand April 2021 vs Jan 2021
York City Centre 76%
Norwich City Centre 62%
Sheffield City Centre 57%
Southampton City Centre 55%
Leicester City Centre 53%
Newcastle City Centre 51%
Nottingham City Centre 39%
Leeds City Centre 39%
Birmingham City Centre 39%
Inner London 30%
Oxford City Centre 28%
Glasgow City Centre 28%
Liverpool City Centre 28%
Chester City Centre 24%
Edinburgh City Centre 23%
Hull City Centre 22%
Durham City Centre 17%
Cardiff City Centre 11%
Manchester City Centre 11%
Bristol City Centre 5%
Source: Rightmove   

Andy McHugo, of James Laurence estate agents in Birmingham, said: ‘Not only are inquiry levels fantastic, committed residential buyers are now returning.

‘The dynamic may have changed slightly, so apartments with balconies or terraces are proving popular, as are those with room for a home office, a second and third bedroom for example.’

He said large company relocations to Birmingham and entrepreneurial start-ups help make the city ‘an exciting place in which to invest, and indeed live’.

Steve Pymm, of Pymm & Co in Norwich, said: ‘The market has been crying out for 95 per cent mortgages for years, so since the release of these lower deposit-based products the first-time buyer is back and they’re snapping up apartments and starter homes.’

City centre Average asking price Apr-21 Average asking price Jan-21 % change
Leeds City Centre £159,972 £166,760 -4%
Sheffield City Centre £124,097 £128,606 -4%
Nottingham City Centre £178,390 £183,542 -3%
Cardiff City Centre £209,130 £212,521 -2%
Southampton City Centre £206,637 £209,586 -1%
Liverpool City Centre £161,860 £163,900 -1%
Birmingham City Centre £215,604 £217,524 -1%
Norwich City Centre £226,354 £228,258 -1%
Manchester City Centre £230,796 £231,766 0%
Newcastle City Centre £170,512 £170,148 0%
Hull City Centre £127,208 £126,776 0%
London (first-time buyer prices) £477,001 £474,950 0%
Glasgow City Centre £172,425 £170,291 1%
Source: Rightmove      

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Patrizia invests in logistics property near Milan (IT)

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Patrizia AG has acquired a newly built cold storage logistics asset near Milan, Italy, from Savills Investment Management. The 31,000m² cold storage asset was completed in Q2 2021 and is fully let to Kuhne & Nagel, a leading pan-European 3rd party logistics company, and Movi.Log Srl, a frozen food distributor, with a WALT of 7.5 years. The property has been built to a high specification with sprinklers, elevations and ample refrigeration space that has a temperature range between 4°C and -28 °C. Sustainability was a key consideration during its development. The asset includes two photovoltaic plants for a total power capacity of 2.5MW and is targeting a BREEAM rating.

 

The property is located in Casorate Primo, a municipality in Lombardy between the cities of Milan and Pavia, a prime industrial and logistics location in northern Italy. It benefits from excellent transport connectivity via the nearby A7 motorway which connects Milan with Genoa and enables access to France and Switzerland.

 

Pierluigi Scialanga, Head of Transactions at Patrizia Italy, commented: “The property is well located and has excellent sustainability credentials, while lettings to tenants with strong covenants will deliver long term reliable returns. Our Italian AUM has grown significantly in recent years to now over €1bn with plans to grow further. Logistics is a strategic sector for Patrizia Italy. We have so far invested €400m in logistics and have a pipeline of a further €160m of logistics transactions which we are completing.”

 

Rob Brook, Head of Alternative Investments and Head of Logistics at Patrizia, added: “Cold chain is an exciting area of logistics for Patrizia to be involved in. Demand is predicted to grow steadily in the next few years, especially due to a growing need for reliable supply chains for biopharmaceuticals, vaccines and clinical trials. High demand across Europe combined with low vacancy rates makes cold chain logistics an ideal growth area for the future.”

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Crackdown on second home and holiday let tax dodgers

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The Government is cracking down on second home owners who claim their properties are holiday lets for tax purposes.

Communities secretary Michael Gove is set to close a tax loophole which has allowed second home owners to avoid thousands of pounds per year in taxes, without proving that the property was ever rented out. 

The new rules will target those who register their holiday lets as small businesses, meaning they are eligible for business rates instead of council tax.

But the majority pay no business rates at all under the system, because they have ‘rateable values’ of under £12,000 based on the property’s rents, size and usage. 

Crackdown: Those registering second homes as businesses could fall foul of new rules

Crackdown: Those registering second homes as businesses could fall foul of new rules

A second home can be registered as a small business if it will be available as a holiday let for 140 days or more in the coming year.  

However, there is currently no requirement to provide evidence that a property has actually been let out, leaving the system open to abuse. 

This has caused anger in areas that have lots of second homes, such as Devon, Cornwall and the Lake District, as some locals believe property owners are not paying their fair share towards council services.

According to Ray Boulger of mortgage broker John Charcol: ‘Some 97 per cent of the 65,000 holiday let properties in England have rateable values of under £12,000, which means they qualify for small business rates relief and pay no rates at all.’

The new rules aim to change this by ensuring that only those properties which are actually rented out for 70 days per year, and available to rent for 140 days, get the tax break. 

Kurt Jansen, director of the Tourism Alliance said: ‘It makes a very important distinction between commercial self-catering businesses that provide revenue and employment for local communities, and holiday homes which lie vacant for most of the year.’

This is Money explains how the new system will work, and how second home and holiday let owners can make sure they are following the rules. 

Locals in UK holiday spots have expressed anger at second home owners, who they say are not contributing their fair share to the community and services via council tax payments

Locals in UK holiday spots have expressed anger at second home owners, who they say are not contributing their fair share to the community and services via council tax payments

What do the new rules say? 

The rules are based on the amount of days a property is rented out in each tax year. 

To qualify for business rates instead of council tax, the new legislation will require second home owners to prove their property will be available for ‘commercial short term, self-catering rentals’ for at least 140 days in the coming year. 

They will also need to prove that, in the previous year, it was available for letting for 140 days and actually rented out for at least 70 days. 

This is designed to prevent second home owners from registering their properties as small businesses, and then not actually renting them out.  

‘We will not stand by and allow people in privileged positions to abuse the system by unfairly claiming tax relief and leaving local people counting the cost,’ said Gove when he announced the policy. 

‘The action we are taking will create a fairer system, ensuring that second homeowners are contributing their share to the local services they benefit from.’

Anger among locals has increased since the start of the pandemic, as wealthy people snapped up UK holiday lets when travelling abroad was not allowed. 

Exempt: As they are assessed differently to bricks and mortar properties, caravans being used as holiday lets will not come under the government's new second home tax rules

Exempt: As they are assessed differently to bricks and mortar properties, caravans being used as holiday lets will not come under the government’s new second home tax rules

What counts as a holiday let?  

The business rates rules for holiday lets only apply to buildings, or self-contained parts of buildings, that would otherwise be assessed for council tax. 

Caravans will not generally be subject to the rules, as they are usually assessed for business rates under a different system to bricks and mortar buildings. 

When it comes to counting the days that a property was rented out, the government says that only days where the property was occupied at the end of the day should be included.

So if a property was let out from Friday evening to Sunday morning, it would have been let for two days for the purposes of meeting the holiday lets criteria.

Is this definitely going ahead, and when will the rules come into force?

The government has concluded its consultation on the new policy, which started before the pandemic in 2018. It plans to implement the changes from 1 April 2023. 

However, the legislation needed to do so has not yet been passed in parliament.

While the government has made clear its intention to enshrine the new rules in law, they are not set in stone just yet. 

How much would I pay under each system?

Small businesses can find their rateable value on the Government website. 

Those with a rateable value of below £12,000 are not eligible for business rates, while those with a value of up to £15,000 pay special tapered rates. 

For those with a rateable value of between £15,000 and £51,000, they will need to multiply that value by 49.9p to find out their rateable value. They can then subtract any discounts that they may be entitled to, which the government details here

Those with a rateable value of more than £51,000 will follow the same calculation, but with a higher multiple of 51.2p.  

As for council tax, second homes are charged at the same rate as main residences. 

Individual councils may decide to give a discount for second homes, or on homes that have been empty for two years. Owners should contact their council to find out if this is available.

Under the new rules, the government has said there will be no rate or council tax discount for those with lots of properties.  

What if I have a new holiday let with no proof of lettings for last year?

Those acquiring a new holiday let and wanting to register for business rates will not be able to prove that their property was available to let for 140 days and actually let for 70 days in the past year, as required by the new rules. 

Until the owner can provide that proof, they will be subject to council tax – meaning most will need to pay that for at least the first year of their ownership. 

After that, they can ask the Valuation Office Agency (VOA) for a business rates assessment. 

This is the government body that handles everything to do with business rates, and it will be responsible for policing the new rules once they come in to force. 

Don't lie low: Property owners who don't think their property meets the new letting rules, but who are paying business rates, are advised to inform the VOA as soon as possible

Don’t lie low: Property owners who don’t think their property meets the new letting rules, but who are paying business rates, are advised to inform the VOA as soon as possible

I don’t think my property will meet the criteria for last year. What should I do?

Some holiday let or second home owners will not be able to prove that their property was available to let for 140 days and actually let for 70 days in the past year. 

The government says people in this position ‘should notify the VOA as soon as possible, so that their property can be assessed as domestic and revert accordingly to (or be given) a council tax valuation.’ 

It adds that failure to do so could result in a large, backdated council tax bill.

How will it be policed?

When seeking a new business rates valuation after April 2023, second home owners will need to provide evidence that their property was let or available to let for the required periods.  

The government has said will communicate the exact method for collecting evidence before the new rules come into effect.

However, this is expected to include things like the property being listed on rental websites, and evidence of payments from guests.  

‘Evidence of lettings will be required, such as at least one website or brochure used to advertise the property and letting details and receipts,’ says Boulger. 

Those already paying business rates on their holiday let or second home, and who meet the letting requirements, do not need to submit anything. 

However, they should ensure that they have evidence of the last year’s lettings by April 2023, as the VOA may ask for them at any time. 

‘The only impact the new rules will have on genuine holiday let properties might be the need to provide the evidence outlined above, but this information should be readily available for the owner’s tax return,’ says Boulger. 

What if the property is used by family and friends?

Those who regularly allow family and friends to use their properties for free could find they are no longer eligible to register as a small business under the new rules. 

The government says lettings counted in the 70-day period must be on a ‘commercial basis’ at ‘market rates’ and that ‘lettings to friends or relatives at zero or nominal rents will not be covered.’ 

No more mates rates? Money will need to change hands when the property is let, or it will not be counted as a holiday letting under the government's new 70-day rule

No more mates rates? Money will need to change hands when the property is let, or it will not be counted as a holiday letting under the government’s new 70-day rule

Of course, if there are 70 days of commercial lettings on top of discounted ones to friends and family, this will not be a problem.  

Boulger says owners should still be able to rent to people they know at a small discount as part of the 70 days, for example if they are deducting the fees that a listings website would normally charge for a letting via their platform. 

‘It should not prevent the owner offering a reasonable discount to family on friends if, for example, they can avoid the normal commission otherwise payable to the sites advertising their property,’ he says.    

What are the rules outside of England?

Wales has already had similar rules for holiday lets in place since 2010, and the new legislation will bring England in line with those.

The Scottish government is also set to introduce a requirement that holiday lets are rented for 70 days and available for 140 days in a given year, following a consultation called the Barclay Review. 

These rules are set to come into force from 1 April 2022. 

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Man admits to abduction of four-year-old Australian Cleo Smith

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A man has pleaded guilty to abducting a four-year-old girl from her family’s camping tent on Australia’s west coast last year.

Police found the girl, Cleo Smith, alone in a house in Carnavon, a town of 5,000 people, 18 days after she went missing last October.

Terence Darrell Kelly (36) admitted to the abduction during a brief court appearance in Carnarvon on Monday in a video link from a Perth prison, 900 km to the south.

He faces a potential sentence of up to 20 years in prison on a conviction of forcibly taking a child aged under 16. He will next appear in a Western Australian state District Court in Perth on March 20.

Kelly has not entered a plea to other criminal charges he faces, including assaulting a public officer. Those charges have been adjourned to a later date. – AP

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