The housing market has got the extended holiday many were hoping for and the clock is now effectively ticking for new buyers who haven’t yet started the process of purchasing a home to take advantage of a reduced Stamp Duty charge.

 

Stamp Duty Extended Holiday

 According to Rightmove data it has taken an average of 54 days to sell a home since the holiday was introduced in July, down from an average of 70 days in the 12 months prior.

Assuming the average time to sell a home remains at the current level, aspiring buyers have until 7th May to begin a purchase to take advantage of the holiday extension.

Overall the Stamp Duty holiday has provided a much-needed confidence boost to the housing market following its full closure in March last year. However, its previous cliff edge ending on 31st March always risked seeing sales fall through increasing anxiety for aspiring purchasers. The extension will provide welcome relief to those purchasers and open the door to additional buyers. There now needs to be clear signposting introduced to ensure the cliff edge is not just pushed further down the road.

 

2% overseas Stamp Duty surplus

This tax represents a big shift in UK Government policy away from an open trade policy – until now there has never been a consideration of an investors origin if they are looking to buy an investment home.

This tax will undoubtedly create some market resistance for an initial period until it becomes accepted. It should be noted that many other competing cities already provide higher levels of overseas taxation so the UK’s major cities should remain competitive on the international stage.

 

First Time Buyer Mortgages

95% mortgages have been all but non-existent for some time now so the Government’s mortgage guarantee scheme is hugely welcome news for aspiring home owners who have long faced mounting affordability issues.

 

Capital Gains Tax changes

The UK has obviously seen a significant increase in its debts as a result of supporting the country through the COVID pandemic. Those who can pay more tax, should pay more – that is only right and it fits with the levelling up agenda.

Nearly half of the UK’s privately rented homes are in suburban locations owned by small scale buy-to-let landlords. There could now be an increase in demand for this kind of housing stock from first time buyers looking to take advantage of the new mortgage guarantee scheme. The proposed changes to Capital Gains Tax could prompt of flurry of sales from landlords looking to exit before the changes take place. However, if there isn’t sufficient lead in time before the CGT changes take effect, it could reduce the volume of rental stock coming to market. CGT is ultimately a discretionary tax, and if homes become bloated with that tax, many landlords will opt to sit on their asset and wait.

 

Wholesale Review of Residential Taxes

Looking ahead, the Government has announced a Tax Day on 23 March and this could include the commencement of a widespread review of residential property taxes.

Reviewing how residential properties are taxed in the UK is long, long overdue.

Council Tax is based on residential values from 1991, which frankly are a very poor reflection of the current market. Meanwhile, Stamp Duty is a hugely inefficient tax which is ultimately a potential hindrance to the future economic prosperity of the UK. It makes no sense for people to find themselves ‘locked-in’ to their current home because of the tax burden of moving. People need to be able to migrate towards opportunities as easily as possible in the 4th Industrial Age and as part of the levelling up agenda.

Government also needs to acknowledge that we have an ageing population and SDLT is a hugely punitive tax for those looking to descend the housing ladder and right-size in later life. Without enabling more people to downsize, we face many people continuing to live inappropriate homes for their needs which in turn forces Government to have to increase expenditure on health and social care.

However, any significant changes in the tax system must be carried out with care, following a detailed consultation and with a sufficient lead-in time. Any replacement residential tax should carry a similar starting burden for individuals. The variance should then occur over time to allow householders to adjust their finances accordingly.

 

Overall Budget Conclusion

There are many welcome announcements within this Budget. However, solutions to the housing challenge must also focus on providing homes to suit a greater variety of end user needs. Society has changed and we must move away from the concept of blanket home ownership. We need measures to support an increase in purpose-built rental homes which will professionalise the private rented market, providing long-term, secure housing, and raising the profile of renting as an aspirational lifestyle choice.

And we need attractive, specialist later life housing which will help free up family homes and make more efficient use of existing stock.  With people living longer, the UK’s ageing population is typically under occupying family homes, but appropriate alternatives will encourage right-sizing.

Measures to address the housing market should be targeted at increasing all forms of supply, not just increasing demand for Private Sale housing only. 

 

Nick Whitten - Head of UK Living Research

12 Mar 2021

Research indicates that this is due to the good experience enjoyed by many foreigners in Japan which is spreading by word of mouth overseas and accelerating the demand for long-term residences in Fukuoka.”

 

 

As the fastest-growing major city in Japan outside the capital area, Fukuoka has been tempting workers and entrepreneurs away from the larger cities for decades through its lower prices and more relaxed lifestyle.

 

Fukuoka, the largest city in Kyushu Island in southern Japan, is becoming one of the top tech start-up cities in Asia.

Fukuoka is particularly attractive to investors due to its local and international transport connections. It is an economic and transportation hub on Kyushu Island.

Tax breaks, relaxed visa restrictions and convenient international travel are making Fukuoka property highly sought-after by foreign investors.

 

Rin Chiniku, Miyoshi Real Estate, explains:

“Rental trends in Fukuoka's real estate market remains positive.

Statistics showing that more than 60% of people living in Fukuoka are renting properties. Rental demand is consistently high and this is reflected in the increasing average rental rates.”

“We are seeing greater number of foreigners moving to Japan for education and advanced medical treatment, and they are also looking to rent or buy in the housing market. A number of these are choosing to reside permanently in Japan as well.

This segment of the market is not a new trend and we have had similar demands before. However, these is a recent boom in foreigners moving to Fukuoka not for sightseeing or short stay, but with the intention of residing on a long-term basis.

Research indicates that this is due to the good experience enjoyed by many foreigners in Japan which is spreading by word of mouth overseas and accelerating the demand for long-term residences in Fukuoka.”

 

 

As the fastest-growing major city in Japan outside the capital area, Fukuoka has been tempting workers and entrepreneurs away from the larger cities for decades through its lower prices and more relaxed lifestyle.

It's especially popular with younger generations, fueling high demand for rental units in the inner city that continues to drive up property prices.

 

Takahiro Yonei, Mitsubishi Jisho Residence, said:

“With the increasing population of young people comes increasing demand for family-type layouts such as 70-80 sqm layouts consisting of three or four bedrooms.

This is paralleled with higher demand for 40-60sqm units due to the rising number of single professionals moving to Fukuoka for work.”

 

Designated one of Japan's Special Economic Zones, Fukuoka has more to offer than just a strategic location. With residential and office rents up to 50 percent cheaper than Tokyo, the international city offers attractive prospects for overseas property investment.

Because of the tremendous social and economic activities in Fukuoka, investors can look forward to high rental yields. Fukuoka is an excellent choice to benefit the luxury of living while they invest in properties at a very low cost.

 

For further information contact JLL International Residential directly at +65 6220 3888 or internationalresi@ap.jll.com 

13 Mar 2019

The UK economic and political landscape has been dominated by Brexit over the past 2½ years. The next 2½ years are likely to be similar, albeit dealing with a different phase of the process.

Inevitably, the UK will collectively refocus attention on domestic policies as the sphere of influence from Brexit diminishes. And there are plenty of housing issues that need addressing – affordability, taxation, regulation in the private rental sector, affordable homes, housing supply, lack of skilled labour and digital construction are just some of the issues to address.

 

Highlights include:

• Loans to Build to Rent landlords have fallen 46% since the Brexit referendum and July 2018

• The UK is still far behind its target of 300,000 new homes a year by 2020, but delivery is speeding up

• Tech is likely to provide huge disruption over the next 5 years, with digital construction, building information modelling and smart tech all playing a role

• Central London house prices are forecast to grow at 15.3% over the next 5 years

 

And if you have any questions on this research or anything else that you'd like us to clarify, please feel free to get in touch with us directly at +6562203888

Download Report

 

 

13 Dec 2018

Despite several high-value transactions during Q3 2018, the Prime Central London sales market suffered a setback to its recovery during the quarter.

On average, prices fell marginally during Q3 having increased in the preceding two quarters and transaction volumes also slowed too. 

The lettings market benefited from a stronger quarter, if a little down on Q3 2017. Rental values increased across all price ranges while turnover experienced its usual Q3 boost. 

Looking forward, we expect a brighter future for both Prime Central London sales prices and rental values. We believe that some kind of Brexit deal will be agreed in the coming months which will remove a degree of uncertainty and instil much needed confidence into the Prime Central London market.

 

Key highlights include:

• Sales prices fall in Q3

• Transactions slowed further

• Rents rise in Q3

• Students bolster the market

 

 

If you have any questions on this research or anything else that you'd like us to clarify, please feel free to get in touch with us directly at +6562203888

 

Download Report

 

 

14 Dec 2018

At first blush, the UK’s new tax laws which seemingly choke out small investors — combined with overall Brexit uncertainty — should create trepidation for investors eyeing the UK real estate market. However, based on government appropriations and investment patterns now is the time to be bullish on the UK property market, not bearish. 

 

Government Appropriations 

The National Needs Assessment (NNA), the UK’s vision for infrastructure, states that billions of pounds will be appropriated to the UK’s high-tech, scientific and digital economies.

With an already attractive GBP exchange, overseas investors will be interested to note specific points of the NNA as the UK in its entirety is expected to benefit from the projected transformation:

 

・ Infrastructure is undergoing revitalization in the UK with HS2 absorbing  £1 billion by 2026. The super-efficient connections made by HS2 will be nothing short of an economic boom. Birmingham, for example, will be within the range of becoming a commuter city for London workers, thereby economically benefiting both cities.

・ English city transport systems will benefit from a stimulus of £1.7 billion which is an additional injection to HS2 funding.

・ Over £500 million will be invested in a range of initiatives from 5G (and full fibre broadband) all the way to creating the world’s first national advisory body for artificial intelligence (AI). The action plan is designed to help scale-up businesses.

・ The main R&D tax credit will be increased to 12% in the spirit of increasing national productivity and growth.

 

 

Photo: Unsplash

 

Overdemand & Generation Rent

Adults are now renting for longer periods of time. Peer-to-peer lending platform Landbay reveals that single UK tenants outside of London spend an average of over 50% of their disposable income on rent.

Within the enviable capital city, the stats are even more staggering at nearly 89% of renters’ disposable income. According to a Frank Knight report, about 5 million households are privately rented in the UK, and this figure is expected to rise to 5.9 million by 2021. That equates to about 24% of the UK population.

Buy-to-let investors will appreciate the growing trend of more massive developments allowing for cost-effectiveness with its built-in management model, comparable to a five-star concierge service.

Such schemes also enable leveraged buying power for amenities such as gyms, rooftop bars, lounges, and even theatres. The net effect results in happier tenants (extended contracts) and landlords with less stress.

 

The buy-to-let trend is further fueled by a £3.5 billion build-to-rent fund. Within this legislative appropriation, funds are even allocated to stimulate loans to qualified landlords. 

The bottom-line is to buy and hold until the new implementation has had time to take effect. The rebound slowly emerging is projected to come into swing starting in a few years as some stated budgetary appropriations from the government will not effectuate until early next decade. The NNA even goes as far as 2050 with its milestones on this plan.

According to statista.com, UK housing is forecasted to have a cumulative growth of 12.6% between 2018 and 2022. Due to the fact that regulatory and tax changes are already creating upward pricing pressure on rental rates throughout the UK, the growing pains from such changes have created an exodus of small-scale investors.

The challenges imposed by the government’s tax changes are inevitably passed on to tenants’ rental rates priming the next stage for perhaps a more cautious approach to the economically-essential landlord side of the buy-to-let market. 

The infamous UK real estate issue of overdemand and undersupply play to the advantage of investors who have a steady hand as they weather beyond the short-term turbulence.

A lack of supply of UK housing may also help to explain the healthy average monthly rental rate increases which weighed in at 0.13% according to Landbay Rental Index. This is the most significant monthly increase since April 2016.

 

Photo: Kings Cross, London by Callum Chapman, Unsplash

 

Foreign Direct Investment (the numbers don’t lie)

Whereas concerns stemming from Brexit would be expected to dampen the parade for UK real estate, in 2016 (the year of the Brexit vote) Britain’s foreign direct investment increased to £145.6 billion.

The year 2015 was a mere fraction at £25.3 billion. In fact, according to Reuters UK, 2016 held the largest recorded figure since the beginning of data compilation. The first half of 2017 saw an impressive 14% of global commercial property transactions taking place in the UK, second only to the USA. (source: www.gov.uk)

Despite the aftermath of Brexit news, London currently ranks third for global cities as listed by Schroders:

“...we have made no negative revisions for London due to a perceived loss of growth from the vote to leave the EU. London remains one of our favoured places to invest.”

The overseas investor has the advantage of not being adversely affected, in a boots-on-ground sense, by the UK’s internal economic turmoil yet benefits from the currency arbitrage of a weaker British pound.

 

“Look before you leap for as you sow, ye are like to reap.”

—Samuel Butler

 

Concluding that the UK real estate market is ripe for investment simply due to statistics and county-wide budget allocations alone certainly would be a quixotic, half-witted assessment.

However, with an experienced real estate firm behind you and sufficient due diligence on the property and its location, the odds of enduring small economic storms and emerging smelling like a rose exponentially increase. 

Thanks to generous government appropriations, market dynamics and a low GBP exchange, the timing is ripe to invest. The history-steeped capital city with its world-class culture and education is becoming part of a stronger and well-diversified investment picture now encompassing the entire UK.

 

For more information about residential properties across the UK, please contact us directly at +65 6220 3888 or internationalresi@ap.jll.com 

 

10 Oct 2018

With several new residential developments and the opening of the new Elizabeth Line, interest in West London is once again on the rise, following several years of East London domination.

While the opening of the Elizabeth Line (Crossrail) has been delayed, the new transport options will nevertheless change the face of West London, opening up new areas not only for commuters into the West End but also into the City and Canary Wharf.

It will continue to be the catalyst for development, especially in close proximity to Crossrail stations. Furthermore, some locations not renowned as commuter towns will be transformed by new residents. So expect West London to see a major makeover during the next decade. 

In addition to Crossrail, it looks like the Heathrow expansion will be given the green light, adding a third runway to the airport by 2026.

The expansion of Heathrow Airport will bring important revitalisation to some areas of West London, creating around 60,000 jobs and generating around £70bn in economic benefits by the 2050s. The new runway will increase capacity from 86m to 130m passengers a year. 

These large scale infrastructure projects will mark a new chapter for West London.

 

Highlights include:

• Acton has been a buzz of development activity in recent years, with 1,425 unit completions since 2014

• Brentford and Kew Bridge have the most units currently under construction in West London with 1,265 units underway

• Ealing will benefit from the opening of the Elizabeth Line and is currently at the top end of new build pricing in West London, with properties reaching up to £1000 psf. 

• Hayes & Harlington and Southall, positioned to the northeast of Heathrow, will benefit from the Elizabeth Line, with the area being host to the most extensive planning pipeline in West London

• West Drayton and Drayton Gardens, one of the westernmost villages in London, has seen significant residential development, with 1,141 completions over the past 5 years

• Uxbridge has seen a surge of residential development activity in recent years, with 628 units currently in the planning pipeline. 

 

 

If you have any questions on this research or anything else that you'd like us to clarify, please feel free to get in touch with us directly at +6562203888

 

Download Report

 

 

14 Dec 2018

The UK housing market is adjusting to varying levels of political and legislative change, but the 'New Housing Paradigm' is about a bigger, structural shift.

A supportive environment for capital flows into the housing market over recent years is expected to close. Digital construction will also play an increasingly important role in housing delivery. Our new report - JLL Forecasts: The new housing paradigm considers the impact of these changes on market performance over the next 5 years and looks at how the UK housing market is expected to perform in 2018 and beyond.

 

Key Highlights:
• More moderate UK house price growth for the next 5-10 years
• Brexit will remain a short-term drag on the UK housing market
• New Housing paradigm good for government, the economy, buyers, sellers and industry participants
• UK house price growth are set to ease
• UK transactions will improve at a moderate rate
• UK housing starts to remain buoyant

Download Report
20 Apr 2018

Buying Process

Buying process of resale property is very much similar to that of a new-built property.

The payment schedule is very straight forward, with a 5 to 10% down payment upon exchange of contract and the balance payment will be upon delivery of property. The whole transaction in general will take around 2 to 3 months.

 

Documentations

For the documentation process, the buyer needs to prepare an Affidavit/Declaration before the exchange of contract, as a proof of identity and for registration of ownership purposes.

Costs

The estimated costs upon purchase amount to 5 to 8% of property price, inclusive of agency fee and related taxation.

 

Selling Process

To list the property on the resale market, the owner needs to exchange a brokerage agreement with an appointed agent after deciding the desired selling price.

Once a potential buyer has made an offer and after the buying conditions and schedule are confirmed, the contract will then be exchanged with a 5-10% down payment. To save on remittance costs, all payments from the buyer are usually kept by agent first.

After receiving all the payments and deducting the necessary costs, the agent will remit the net income to the seller.

 

Documentations

The owner shall prepare Affidavit/Declaration before the exchange of contract to prove identity. Also, the title deed of the property needs to be submitted before the delivery of the property.

If you have bought a property through JLL, the title deed would have been delivered to you after the handover. If you have problems locating the title deed, please contact your respective salesperson and we will be able to assist.

Cost

Estimated cost for selling property can amount to 4 to 5% and exclusive of Capital Gain Tax as it can vary case by case. Capital Gain tax is imposed on the net profit that the seller makes from the transaction. The taxation rate is either 30.63% on properties held for less than 5 years, or 15.315% on properties held over 5 years. Please note, that the holding period starts from January 1 of the new year. Eg. If the handover of the property is September 2020, 15.315% rate will apply from January 1, 2026.

For more details you may contact JLL International Residential at +65 9671 9583 or internationalresi@ap.jll.com

 

19 Nov 2020

In this video, Meg Tang from JLL Japan will explain the differences between Joint Tenancy and Tenancy In Common

16 Jul 2020

Traditionally, Germany has not been a priority market for Singaporean overseas property investors. Most Singaporeans usually look at the UK, Australia and the US when it comes to purchasing a second home or an investment property overseas.

However, in the space of the last few years, more and more discerning investors have been increasingly looking at other countries such as Germany, as they look to diversify their property portfolios and mitigate risk.

 

With the current uncertainties in the world, such as the sentiments around Brexit and the ongoing trade issues between the US and China, many investors in Asia are naturally looking towards less volatile, safe haven markets to invest in.

 

  • ✔ Germany has the largest and most stable economy in Europe accounting for 20% GDP of the EU, and fundamentally provides an exciting backdrop for real estate investment.

 

  • ✔ Germany is one of most politically stable countries in the world, with a strong government that aims to promote continuity, stability and sustained growth in the country.

 

  • ✔ Germany has a well-established housing market which offers attractive returns with lower risks. A PricewaterhouseCoopers (PwC) survey titled ‘Emerging Trends in Real Estate Europe 2018’ named the German capital, Berlin, as ‘the most desirable city by investors’ for the fourth consecutive year.

 

  • ✔ Along with Berlin, three other German cities - Frankfurt, Hamburg and Munich - were ranked within the top ten most desirable cities in the world to live in.

 

So let's have a closer look at why Germany is probably one of the most attractive places in Europe to consider investing in right now!

 

Is it a safe investment?

With the highest GDP and the largest population in Europe, Germany boasts a well-established market with a diverse, highly developed economic, cultural and social framework.

The ‘Made in Germany’ label is well-known for the highest quality. Together with the US and China, Germany is one of the world’s top three exporting countries, making it a favourite destination for international investors. And, because of its progressive educational, work and social policies, Germany has one of the lowest unemployment rates in the world.

Property values in Berlin have increased over the past 18 months, generating €9 billion in property deals in the first three quarters of 2017 alone, making this country Europe’s second most active market after London.

Why has there been a recent increase in interest in properties in Germany? There are many reasons, including the current political and social changes that are now sweeping across Europe.

 

Is the growth sustainable?

There is usually a shortage of suitable properties in Germany. Germany’s strict housing policies only allow a limited number of new-build constructions each year, contributing to the restriction of the housing supply. This prevents speculative developments, like in many other areas around the world, which tend to drive prices downward.

Although there has been a dramatic increase in property purchase prices and rental rates, especially in cities like Berlin, industry watchers believe that this growth is sustainable due to good management practices in place, as well as a strong focus on the renovation of existing properties.

 

What about urban infrastructure?

With a high number of established, historic cities and urban areas - more than 70 German cities have more than 100,000 inhabitants each - the country has a great infrastructure, an important consideration when it comes to the attractiveness of a location.

German cities offer a holistic mix of residential and commercial areas, pleasant public spaces and highly efficient transport, resulting in a quality of life that is one of the best and safest in the world.

The search for a good work-play balance is shaping many cities and urban areas in Europe. The boundaries between work and lifestyle are increasingly overlapping, but German cities are well-poised to embrace these changes for future generations.

 

 

Can my kids study in German universities for free?

Buying an overseas property is both a great investment and a way to provide the comforts of home to children studying in university. German people believe education should be free. Therefore, many public universities in Germany offer tuition-free university education for both domestic and international students. More and more Singaporean parents are choosing to send their children to study in German universities, which are ranked as some of the best and most prestigious in the world.

For example, Munich’s Ludwig Maximilian University, founded in 1472, is one of Europe’s best research universities, with 34 Nobel laureates associated with it. In Heidelberg, the University of Heidelberg has been associated with at least 33 Nobel prize winners, and is one of the most popular universities in Germany for foreign students. It has a student population from at least 130 countries worldwide.

Its progressive educational policies and quality vocational training has resulted in Germany having one of the lowest unemployment rates in Europe and the world, as well as having a highly skilled workforce that will continue to drive its vibrant economy.

 

How about long term visas for non-EU nationals?

To further drive the German economy, the German Residence Act allows qualified foreign investors and entrepreneurs to obtain long-term ‘D’ visas and temporary two- or three-year visas, which can be prolonged into permanent residence status with a minimum investment of €200,000 to 250,000 (2017) in the country.

Family members of visa holders also get residency status in Germany, and can also qualify for German citizenship after eight years’ residency in the country.  Germany is also a member of the EU, which allows its citizens and residents free trade and passport-free movement between its 28 member states.

Thus, buying in a property in Germany is not only one of the best investment decisions a Singaporean investor can make in terms of long-term returns, but it also opens up the doors  for you and your children to be able to live and work freely in any country in Europe as well!

So as you can see, there are many reasons to invest in German properties right now. Where do you start? As with any investment, the best approach is to do your research, and get as much relevant information as possible before you make any decisions. Read our Investment Guide or talk to a real estate professional who specialises in overseas property investments, and they can guide you in making the best decisions for yourself and your family.

 

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For further information please contact JLL International Residential directly at +65 6220 3888 or internationalresi@ap.jll.com 

05 Jun 2020