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  • Ten-year house price forecast

      A new 20-year house price forecast predicts average property values in London could rise by a staggering 80 per cent to £867,000 by 2027, and be almost £3 million a decade later./span>
      The report, by eMoov, analysed house price data from the Land Registry over the last 20 years which it used to calculate the potential percentage increases in property values for the next two decades. Since 1996, the main driver of price growth has been the shortage of affordable homes, with house prices in England rising by 320 per cent from an average of £56,000 in 1997 to £234,000 this year.
      Bank Of England economic growth- BOE sharply raises 2017 growth outlook.

    The BOE upgraded its economic forecasts for the second time since the Brexit vote and revealed that some policy makers have become more concerned about accelerating inflation. Stronger-than-expected growth -- reflecting an easier fiscal stance, buoyant consumer spending and an improving global environment -- is countered by the risk that Brexit will ultimately hurt the economy. The Monetary Policy Committee now sees gross domestic product rising 2 percent this year, up from 1.4 percent in November. “The stronger projection doesn’t mean the referendum is without consequence,” Carney said. The solid expansion, coupled with a pickup in price growth, saw rate setters repeat that they have limited tolerance for inflation above their 2 percent target. Some members went further and said they are “closer to those limits.” Inflation is forecast to accelerate through this year and peak at 2.8 percent in 2018.

    Currency Volatility The pickup in prices partly reflects the pound’s 15 percent drop since the Brexit vote last June. The upward pressure has eased somewhat, with sterling up 3 percent since the November forecasts. Policy makers said further currency volatility is likely as more details about the EU exit emerge. They also expect faster price growth to weigh on consumers, though less than previously thought. The BOE was more optimistic about the labor market in the coming years, seeing the jobless rate about half a percentage point lower than previously anticipated. It cut its estimate of the equilibrium rate to 4.5 percent from 5 percent, which is lower than the current level of 4.8 percent. While the Brexit impact on the economy has been limited so far, the U.K. hasn’t actually begun the formal exit process. Prime Minister Theresa May plans to trigger that by the end of next month.

    “The stamp duty reform of December 2014 was a defining moment for the top end of the prime London market, particularly as it was looking fairly fully priced having grown significantly to outperform the rest of the market over a 10-year period,” Lucian Cook, head of U.K. residential research for Savills, said in the report.The tax changes took the market by surprise and leave little room for price increases while the market adjusts to the new regulatory environment, according to Cook.



  • France - New Tax Legislation introduce:

If you are planning on selling a property in France and it is not your primary residence then you should be aware of the new taxation laws, which will come into operation on 1st February 2012. Introduced by President Sarkozy as part of the new austerity measures the changes will affect those owning an investment property or second home in France. 

Currently, the tax payable on the sale of a second home or investment property, owned by an individual, diminishes to 0% after 15 years of ownership, however from February 2012 the 15 year rule is to be replaced by a less generous one over 30 years. 

NEW CAPITAL GAINS TAX RATES

The tax on second homes will now be calculated on the sale price minus the purchase price originally paid, plus an allowance for inflation. The tax rate is 19% plus social charges of 13.5%, giving a total of 32.5%. So instead of 100% exemption at the end of 15 years ownership, under the new rules the allowance will be 20% 

A summary of the new allowances is as follows:

- No allowance for the first five years of ownership.

- Between six and seventeen years of ownership: 2% allowance per year.

- Between eighteen and twenty-four years of ownership: 4% allowance per year.

- Between twenty-five and thirty years of ownership: 8% allowance per year.