New Legislation Approved: Lower Rates of Stamp Duty for Student Property

Having received Royal Assent on the 15th of September, the Finance Act 2016 will come into force as a law in the UK, excluding student accommodation from the higher residential Stamp Duty rates.

 

 

In March’s Budget announcement, former Chancellor George Osborne announced a new tiered system for Stamp Duty on residential property, which saw purchases on second homes and buy-to-let properties under become subject to a 3% levy surcharge – a law in place since April 1st 2016.

 

According to the Finance Act 2016, however, purchases of specifically designated student property will not be subject to the same tiered system for Stamp Duty as residential properties; since these types of dwellings are now being classified as commercial properties instead.

 

The new legislation will benefit investors of student accommodation, with this group now exempt from the Stamp Duty surcharge on properties below the mark.

 

Those purchasing student pads under will pay no surcharge as the current rate for these types of properties stands at 0%.

 

Last month, the University of College Admissions Service revealed the largest number of applications ever recorded for the 2016/17 academic year, with the number of university positions offered to students increasing by 3% from the previous year to nearly half a million.


Record Foreign Investment in the UK

The UK has experienced record breaking investment from foreign businesses over the course of the last financial year.

 

The newly appointed International Trade Secretary, Liam Fox, announced that in the year to April 2016, there were a total of 2,213 investment projects made by international companies in the UK – an increase on 11% on the previous year.

Figures from the Department for International Trade stated that a total of 116,000 jobs have been created or safeguarded over the past year, bringing the total number of jobs created in the UK through foreign direct investment since 2010 to almost 390,000.

Commenting on the figures, Mr Fox said: ‘These impressive results show the UK continues to be the place to do business.

‘We’ve broadened our reach with emerging markets across the world to cement our position as the number one destination in Europe for investment.

‘This continued vote of confidence in the UK will help attract foreign investment to create jobs, security and opportunities for people across the UK.’

In line with the continued plan for the creation of a new Northern Powerhouse region, the greatest increase in investment was found across the North of England.

The North West saw an increase of 118% year-on-year, whilst the North East and Yorkshire and the Humber saw a rise of 83% and 66% respectively.

The biggest increase in terms of job roles was seen in the Midlands, where a total of 14,797 jobs were created between April 2015 and April 2016.

With more than 570 projects, the US has remained the largest provider of new projects within the UK, with China and India following suit with a total of 156 and 140 projects each.

Released today, the figures do not provide coverage of the period following the UK’s decision to leave the European Union, but deals such as the sale of ARM Holdings to Japanese firm Softbank, completed for bn last month are indicative of a willing market for UK property.


International Property Investors Look to Capitalise on Recovering Sterling

Property investors from around the world are looking to capitalise on a favourable pound sterling exchange rate, following market reaction to the upcoming European Union referendum in the UK.

The value of sterling fell last week following David Cameron’s announcement that there would be a referendum held on June 23rd 2016, where the general public will be able to cast their vote to decide upon the future of the United Kingdom’s role within the European community.


The pound fell against a range of international currencies including the Euro, the United States Dollar, the Chinese Yuan and the United Arab Emirates Dirham, which is allowing property investors from these regions to benefit within the UK property market.


Beyond the currently favourable exchange rate, international purchasers are also profiting from the sustained growth within the property investment sector, with house prices continuing to increase across the majority of the UK.


The Royal Institute for Chartered Surveyors (RICS) predicted in December that 2016 would see a 6% increase in property values on average across the UK, with Post Office Money now reporting that property is now earning most owner-occupiers more money than their annual salary.


Market analysts are anticipating that the sterling will correct and return to a more competitive exchange rate in the coming weeks, with the pound having experienced 7 consecutive days of growth since February 24th.