Co-primary living

The rise of flexible working has allowed owners of second homes to stay longer, with many now viewing them as “co-primary” homes.

The trend has had a big impact on popular second home locations like Aspen, where transactions surged by more than 50% during 2020.

The influx of co-primary residents from New York, Miami, Los Angeles and San Francisco has continued this year, with more high-net-worth individuals opting to call Aspen home and enrolling their children at Aspen Country Day or Aspen Public School District.

Supply is now dwindling. Aspen saw 19 new listings in August 2021 (condos and single-family homes), down from 61 a year earlier, according to Miller Samuel. This fall in inventory has seen sales dip, and 25 contracts were signed in August 2021, down from 54 in August 2020.

Building materials

The construction industry's supply chain woes are beginning to ease, according to the latest IHS Markit purchasing managers index.

The portion of survey respondents citing longer delivery times fell to 47% in November, down from 77% in June. Input cost inflation fell to a seven-month low. Last week, official figures revealed the cost of materials had climbed 24.5% during the year to October, so signs of easing are likely to have a swift impact.

November's output was the strongest since July, led by commercial work. The survey recorded a steep rise in staffing numbers as construction companies sought to boost capacity.

 House Prices

House prices in almost half of the 56 markets Knight Frank tracks are rising at an annual rate of more than 10%. That's up from 13% of markets at the start of the pandemic.

The data reveals the remarkable degree to which global homebuyer attitudes have been transformed by the crisis. A peak is now in sight, however. Eighteen countries saw their rate of annual price growth moderate between June and September this year, amongst them some of the strongest performers since the start of the pandemic, including New Zealand and the United States.

After showing signs of slowing at the end of the stamp duty holiday, UK house price growth picked up again in November to hit a 15-year high, according to the Halifax house price index.

Tax

The prospect of a hike in capital gains tax (CGT) for property investors appears to be off the table. That's the big takeaway from the government's second 'Tax Day', in which it publishes papers and consultation responses on a range of revenue raising topics.

Last November, the Office of Tax Simplification (OTS) proposed aligning rates of capital gains tax with income tax, which would have seen the top rate of CGT rise to 45% from 28%. For investors selling at a gain of £500,000, the move could have added more than £75,000 to their tax bill, depending on their circumstances and income tax band. But in its response to the proposal, the government said there would be no changes to CGT for the time being.

Officials are now seeking to close loopholes in the stamp duty system that relate to reliefs on mixed-use schemes and multiple dwellings. This is an attempt by the government to shut down the fast-expanding reclaims industry, where companies use the loopholes to claim refunds from HMRC. To find out more, Tom Bill speaks to Nimesh Shah, chief executive of tax advisory specialist Blick Rothenburg.

In other news..

Andrew Shirley's latest Rural Update covers panic selling in grain markets.

Tilda Mwai on why green homes top the wishlists of African homebuyers.

Elsewhere - Biden administration to target money laundering in US real estate market (FT), Americans’ pandemic-era ‘excess savings’ are dwindling (NYT), Paragon results hint at a recovery in the UK's buy-to-let sector (Newswire), house prices are out of control but the Bank wants to pour fuel on the fire (Telegraph), cabinet rift over vaccine passports (Times), Bill Gates says the acute phase of the pandemic will pass in 2022 (Bloomberg), and finally, soothing words from Glaxo and Anthony Fauci give London’s market a lift (Times).