By Martin Beckford, Policy Editor For The Daily Mail
12:26 23 Mar 2023, updated 17:03 23 Mar 2023
- Chancellor changed rules last year to allow councils to put through higher rises
Struggling families face a deepening cost of living crisis as the average council tax bill tops £2,000 for the first time.
The latest hike represents another blow to hard-pressed homeowners after Government statistics revealed that the average council tax bill for a Band D property will reach a record £2,065 in 2023-24.
Meanwhile, more than 1million homeowners on variable rate mortgages will see their payments go up by hundreds of pounds a year after the Bank of England hiked interest rates to 4.25 per cent.
The move was backed by Chancellor Jeremy Hunt, who said that rising prices were ‘strangling growth’.
And the Bank governor raised the prospect of more pain to come from further rate rises.
Want to know how much your council tax could increase by? Type the name of your local authority into the box below to reveal the planned rise:
The total is up £99 on the figure for the current financial year, a 5.1 per cent rise, yet residents can expect worsening services as chiefs say they must make massive cuts to balance the books.
At the same time, millions of households are receiving unwelcome letters from energy firms warning that their fuel bills will soon rise by £67 a month as the Government’s rebate scheme comes to an end.
The economic shocks come just a day after inflation rose again to 10.4 per cent in the year to February – driven by surging food prices caused by shortages of salad and vegetables. Rishi Sunak has previously vowed to halve the headline rate by the end of the year.
The Governor of the Bank of England attempted to reassure the public over both rampant price rises and fears of a banking crisis.
And offering a glimmer of hope, he claimed that inflation will have fallen sharply by the summer.
The economic shocks come just a day after figures showing an unexpected rise in inflation to 10.4 per cent – a blow to Rishi Sunak’s vow to halve inflation by the end of the year.
Food prices are going up by an eye-wateringly high 18.2 per cent – a 45 year high – amid salad and vegetable shortages while the price of going out for a pint has also spiked.
Mr Bailey said he expected galloping inflation to come down a lot by the time families are heading for their holidays this summer but hinted that rates could continue to climb until it is brought under control.
‘We know people are worried about the cost of living and they rightly think that inflation is too high’, Mr Bailey said.
‘They may also be worried about what they have been hearing about banks in recent days.
‘That’s why we have taken action on both.
‘Low and stable inflation is the foundation of a healthy economy. Raising rates is the best tool to bring inflation down.
‘We believe inflation will begin to fall quite rapidly before the summer.’
Chancellor Mr Hunt said: ‘With rising prices strangling growth and eroding family budgets, the sooner we grip inflation the better for everyone.
‘That’s why we support the Bank of England’s actions today and why we will continue to play our part in this fight by being responsible with the public finances, alongside providing cost of living support worth an average of £3,300 per household over this year and next.’
But Labour’s Shadow Chancellor Rachel Reeves said: ‘Today’s interest rate announcement will be a source of huge concern for families across the country who will be thinking about the impact this will have on their finances.
‘The Government think the cost of living crisis is over but the reality is that too many families are dealing with a Tory mortgage penalty and battling with soaring food prices.’
Money saving expert Martin Lewis has previously urged Britons worried about council tax rises to check if they are in the right band. If not, you could save thousands of pounds.
Lewis explained: ‘Once upon a time, way back in 1991, in time for the launch of its new council tax system, the Government needed every property in the land to be put in a valuation band.
‘But time was short, and the job large, so the people in charge asked estate agents and others to help.
‘Yet even with all the estate agents’ help, they didn’t have time to get the detailed information together, so they set about doing it quickly by pairing up and driving down countless streets, allocating each property a band with just a glance.
‘They became known as ‘second-gear valuations’ as they mostly never even stopped their cars, never mind got out of them.’
Therefore, many households have been on the wrong council tax band since 1991 and many find that they should be on a different band today.
You can challenge your band if you think it is wrong and recoup the money you might have overpaid.
However, it is worth noting that you might be re-banded and have to pay more council tax, so be careful before you do make the challenge.
Lewis explained that people in England and Wales should submit their challenges to the Valuation Office Agency (VOA), which you can access on the Government’s website.
Alternatively, you can call the VOA on 03000 501 501 for England or 03000 505 505 for Wales or email on firstname.lastname@example.org.
You will need to give the addresses of up to five similar properties in a lower council tax band in your immediate area, plus give detailed information on the type of property you live in.
The challenging process is different if you live in Scotland and Lewis says that you should visit the Scottish government’s website for more information.
ARE YOU ELIGIBLE FOR A COUNCIL TAX DISCOUNT?
Discounts and reductions can be awarded to people including (but not limited to):
- People who live alone (or only with under-18s)
- People living with a severe mental impairment (SMI)
- Those on a low income / benefits / universal credit
- Those on pension credit
To apply for discounts you must go through the Government website.
You will need your national insurance number, bank statements, a recent payslip or letter from the Jobcentre, and a passport or driving licence when filling out the details.
If you are not sure which local authority you live in, you can check the Government’s council locator to find out.
If you live on your own, you can get 25 per cent off your council tax bill.
This also applies if there is one adult and one student living together in a property, or if there is one adult and one person classed as severely mentally impaired in the home.
If you live with someone who doesn’t have to pay council tax, such as a carer or someone who is severely mentally impaired, you could get a larger reduction too, of up to 50 per cent.
And, if you live in an all-student household, you could get a 100 per cent discount.
A full list of circumstances that exempt you from paying council tax can be found on Citizens Advice.
Pensioners may also find themselves eligible for a council tax reduction.
If you are on a low income or receiving benefits, you could be eligible for a reduction on your council tax.
Whether you are eligible will vary depending on where you live.
Tauranga and Western Bay of Plenty average house prices keep falling but agent says still a tough time to sell
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Tauranga’s average property value plunged by nearly $140,000 in the year ending February, OneRoof data shows.
The March property report shows the average value fell $137,762 to $995,667 in the city. In the Western Bay of Plenty the drop was not as steep but still fell by $98,933 to $1,353,800 over the 12-month period.
However, a data analyst said a lack of new housing stock could put the brakes on value declines as listing volumes across the country were falling.
No suburbs increased in value over the previous 12 months.
However, values in Pyes Pā and Tauriko in Tauranga and Anongatete, Athenree, Ōmokoroa, Pukehina, Te Puke, and Waihī Beach in Western Bay of Plenty had increased in the past three months.
Tremains Bay of Plenty managing director Anton Jones said it was “tough” to get deals over the line.
“Buyers are shying away from properties with problems, consenting issues and leaky buildings given the number that is available. A lot of people are hanging out for the right thing.
“It’s interesting because as soon as the right thing comes out, it seems to be what everyone wants and that property will go pretty well because it’s presented and priced well and have all the boxes ticked.”
Jones said people with properties on the market for a long time should make sure it was presented nicely and was relatively free of issues.
“That will be the first thing they look at, whether the property has any issues and how easy is that to resolve. Those with more issues tend to stick on the market for longer.”
REINZ regional director Neville Falconer said first-home buyers in Tauranga were beginning to make a comeback and owner-occupiers looking for properties at the top end of the market were showing the most interest.
”Salespeople throughout the Bay of Plenty say that this summer has caused much heartache for many people in the North Island and has impacted the entire country to varying degrees.
“People are now taking a hard look at the vulnerability of their properties in the Bay of Plenty.”
Data taken from the OneRoof-Valocity House Value Index on February 20 showed house values fell 7.7 per cent in Bay of Plenty since the market peak in February last year, but the rate of decline was easing.
The data also showed the number of new properties listed for sale in February down 25.9 per cent in Bay of Plenty year on year.
Head of valuations at Valocity, OneRoof’s data partner, James Wilson said the lack of new housing stock could put the brakes on value declines.
“Bay of Plenty’s average rate of decline appears to have stalled, as has Nelson’s and Southland’s, but not so lucky are Gisborne and Waikato, where the rate of decline has gathered pace in the last three months.
“Sellers, like buyers, are understandably worried about rising interest rates and will be hesitant about selling in the midst of a downturn.
“The Reserve Bank has warned that monetary conditions will need to tighten further to get inflation back within its target range, and flagged a cash rate peak of 5.5 per cent.”
Wilson said to expect demand to drain from the housing market in the coming months, especially in areas hit hardest by recent extreme weather.
While the shortage of new listings would help prop up values in some areas, the glut of older stock was a concern with buyers likely to see further price declines in areas where there are more homes to choose from.
“Of the 1167 suburbs that recorded 10 or more settled sales in the last 12 months, 84 per cent were down year-on-year, compared to just one suburb a year ago.
Valocity senior researcher Wayne Shum said first-home buyers increased their share of purchases nationally month-on-month from 41.6 per cent in December to 43.3 per cent in January.
Investor purchases in January were up 1.1 per cent on last year at 20.8 per cent.
Shum said interest rates were the “dominant force” in the market and with the Reserve Bank “laser-focused” on tackling inflation, they would be for the months ahead.
“However, the recent lift in the cash rate seems to have been baked into the major retail bank plans.
“There were no corresponding mortgage rate increases at the time of the Official Cash Rate announcement and the fact that some of the main banks have longer-term rates lower than their shorter-term rates may be a sign that the end of the tightening cycle is near.”
RILEY, Kan. (WIBW) – Change of Value Notices have been sent to Riley Co. property owners as the County Appraiser’s Officer finds the average property value has increased to $215,000.
The Riley County Appraiser’s Office says on Monday, Jan. 9, that it has completed an analysis for 2023 property valuations. It said the annual Change of Value Notices should be completed and mailed to property owners by the end of February.
The Office noted that the CVNs reflect changes in property values due to fluctuations in local real estate markets and changes made to individual properties such as additions or improvements.
“It’s important to note that just because the property value increases does not mean the taxes will,” said Riley Co. Appraiser Anna Burson. “We are tasked with valuing homes at fair market value based on sales. We do not set the taxes. The tax bills received in December reflect an individual property’s share of the established yearly budget. The budget itself is determined by the Riley County Board of County Commissioners, school districts, municipalities, and other taxing authorities. The tax dollars needed to meet the budget are represented by the mill levy. As you may have heard before, the valuation of your property determines your piece of the pie. Which is why it’s so important to ensure all property is valued fair and equitably.”
County officials indicated that the median home price in Riley Co. is currently $215,000 while in 2022 it was $204,900.
Officials also said the market indicates an overall inflation rate of 13.31% with the index ranging from 10-17% on average for residential property. It said the commercial trend ranges from 0-5%.
“The index represents the value increase we are typically seeing,” Burson said. “Property owners could see smaller or larger increases depending on the market area they are in.”
If property owners do have questions about their property value after they receive their notice, the Office has encouraged them to contact it at 785-537-6316. It said the CVN mailing will include a form that can be sent to the Office for purposes of scheduling an informal appeal until March 27.
“Property data for all parcels in Riley County can be accessed through the County’s website,” said Burson “If you are in need of any additional information, please feel free to contact our office.”
For more information about valuation and property tax, click HERE.
Copyright 2023 WIBW. All rights reserved.
The real estate market slowdown offers a glimmer of hope to struggling first home buyers but OECD data shows New Zealand homes are still among the least affordable in the developed world. Photo / Ted Baghurst
The Far North and Kaipara bucked a national trend with average house prices increasing in 2022 while prices in the big cities continue to tumble.
However, in recent months the real estate slowdown appears to
The latest data from the Australian Bureau of Statistics (ABS) showed the preliminary estimate of the total value of residential dwellings fell $358.9 billion to $9,674.4 billion in the September quarter.
This followed June’s drop to $10.183 (which was revised up from its preliminary earlier $9.98 estimate) from the March peak at $10.033 billion.
This is the largest quarterly fall in the value of residential dwellings in Australia since the series commenced in September 2011 and takes the mean price of residential dwellings to $889,800 million marking a $36,800 fall per property.
The total value of residential dwellings fell in all states and territories, which was driven by NSW, Queensland, and Victoria.
The mean property value in NSW fell to $1.127 million from $1.187 in the June quarter and Victoria’s residential properties values hit $912,000, down from $942,000 in March.
Meanwhile, Queensland continued to see property values rise last quarter and the mean property values hit $753,000 in the September quarter, down from $790,000 in June.
Similarly, South Australia had its first recent quarterly drop, with the state’s mean property values at $650,000 in the September quarter from $653,000 in the June quarter.
Western Australia followed a similar trend with mean dwelling prices at $644,000, down from $648,500, while Tasmania continued its fall since March ($698,200) to $680,000 in the June quarter and $653,000 in the September quarter.
ACT’s mean property prices were valued at $956,400 from $999,000 in the June quarter.
As the value of property prices has fallen, the number of residential dwellings rose by 45,300 to 10,872,900.
The increase in housing supply comes despite building approvals falling by 6 per cent in October, earlier ABS data revealed.
Total building approvals fell by 6 per cent in October, as a construction backlog from the HomeBuilder grant continues.
The data revealed house approvals were down by 11.6 per cent on a year ago while apartment/multi-density are up by 3.5 per cent.
“There are broader factors weighing on building approvals and the housing market overall with aggressive interest rate rises and high inflation in building materials,” AMP economist, Diana Mousina, said.
“House approvals have more downside to go but apartments/multi-density should do better from new demand as migration is surging again and from government incentives for schemes like Build-to-Rent.”
Looking across the states, total dwelling approvals fell in NSW by 18.8 per cent, followed by Queensland at 18.7 per cent, and Tasmania dropped 10.5 per cent, while South Australia dropped 17.6 per cent, Victoria (up 5.8 per cent), and increased in Western Australia (5.7 per cent).
[Related: Construction backlog holds up sector]
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By Phil Pennington RNZ
Private consultants working on the public media mega-merger are on contracts worth up to almost $9000 a week, and an average of almost $6000 a week.
The Government has $40 million to spend on the transition of RNZ and TVNZ into one entity, and at least a quarter of that is going on contractors.
The bill for 17 of the largest contracts for individual jobs is almost $4m, on top of the $5m for the largest single contractor working on the transition, Deloitte.
An OIA response from the Ministry for Culture and Heritage shows the most costly weekly contract for a programme director is $393,000 over 44 weeks, or $8900 a week.
A change management leader is on an $8000-a-week contract.
Most contracts are worth $5000-6000 a week, with an administrator the cellar-dweller on just $2900.
All 17 have been hired through recruitment firms.
TVNZ’s staff average pay was about $2100 a week last year and RNZ’s $1700 in 2020-21. These amounts were skewed upwards by high amounts earned by small numbers of staff.
Most of the merger contracts are running for 30-40 weeks up until next month; the ministry said some would likely be extended.
RNZ requested to know only about those contracts worth more than $100,000.
The ministry said it was about to let a new $100,000-plus contract to find executives to head the merged entity.
The new entity will be established legally in March 2023 and get its first government funding next July of $109m a year for three years.
With the addition of advertising income total revenue is expected to be about $400m a year.
“All contractors were sourced through the All of Government recruitment panel,” the ministry said in the OIA.
The panel is designed to promote consistency in terms and conditions for contracts between 41 recruitment agencies and 179 government agencies, for common jobs in administration, IT and services.
How the panel runs is being overhauled.
But the switch from a percentage-based pricing model to a fixed-fee model sparked industry concerns about “unintended consequences”, so officials called a pause, and then issued a revised tender last month.
“One of the key changes is the proposed introduction of new, lower rates [for] contractors if they stay in a placement and move into the second year of work with the organisation they have been placed in by a recruiter,” the Ministry of Business, Innovation and Employment said.
It also switched from putting an emphasis on the transaction to more stress on value, “enabling transparency and consistency”, it said.
The Ministry for Culture and Heritage specialist services were required to do this level of design and change.
“It is standard public service practice that contractors are utilised where the existing workforce do not have the capacity or specialist expertise to deliver major new initiatives,” said policy and sector performance deputy chief executive Emily Fabling.
“The rates paid reflect the skills required and all-of-government procurement guidelines.”
It had four major workstreams going on.
The ministry declined an interview.
Public media researcher Dr Peter Thompson said he was not aware that Deloitte had a track record in establishing public media entities, unlike its record on business, accounting and management.
“The Government’s employment of big consultancy firms often has as much to do with the desire to imbue public policy initiatives with some sort of corporate veneer of legitimacy as it does with delivering effective policy outcomes,” Thompson said.
“Although it might well be prudent to consult these firms on the financial aspects of state enterprises, significant expertise on such issues already resides in Treasury and MBIE.”
The Government has had a spend-less-on-contractors order for several years, but in the past year it rocketed up.
Having dropped as a proportion of core public sector staff spending immediately before 2021-22, it leaped back up by 33 per cent, or $300m to $1.2 billion.
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Rental apartment construction dropped sharply in Toronto in the first half of the year, according to a new government report that suggests it has become “less and less tenable” for developers to shoulder rising building costs.
Housing starts for apartment rentals fell 24 per cent to 1,436 units in the first half of this year compared with the same period last year, Canada Mortgage and Housing Corp. said in a new report released Tuesday. Four of the other five major cities CMHC surveyed showed an increase in apartment rental starts, with Calgary more than doubling over the same period.
Across the country, there has been a push to build more rental housing, also known as purpose-built rental, to help house the growing number of residents who have long been priced out of the real estate market.
But in Toronto, developers have less incentive to put up purpose-built rental buildings because demand is so high from investors seeking to buy preconstruction condos.
As well, many would-be home buyers cannot afford a house, given that the typical selling price is more than $1-million in the Toronto region. Condos are relatively cheaper.
The sharp rise in construction costs has also been a factor for developers. CMHC said costs are up 22 per cent, year over year. Those expenses, along with the jump in interest rates and higher land costs, “appear to make” purpose-built rental construction in Toronto “less and less tenable,” the report said.
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Because of strong demand for preconstruction condos, it is easier for developers to quickly recoup their costs on them. Once a condo building has been completed, buyers close on their units and the developer gets paid.
“You sell and you’re done,” said Dana Senagama, CMHC’s senior specialist for the Toronto region.
With a purpose-built apartment building, however, developers face a longer period to recoup their costs. Leasing a building can take over one year, and still that does not cover all the development expenses. “You kind of have to wait a long time to recover that cost,” said Ms. Senagama. “So, it is just not attractive.”
The CMHC report looked at the proportion of new high-rise units that are rental apartments versus condos, and said Toronto was the only major urban centre where condo building outstripped rental apartment construction in the first half of the year compared with the average of the prior five years. Purpose-built rental starts accounted for 10.7 per cent of the high-rise housing starts in Toronto in the first half. In the previous five years, the average was 17.4 per cent for the first half of the year.
Montreal also showed a decline in purpose-built rental construction over the past year. But overall, rental starts accounted for 67.6 per cent of the high-rise housing starts in Montreal in the first half of this year. That is higher compared with the previous five years, when the average was 61.2 per cent. Similarly, in Vancouver, Ottawa, Calgary and Edmonton, developers are shifting toward purpose-built rentals.
For Toronto, this year’s rental starts marked the lowest level since 2017. The CMHC report said this decline suggests “some builders may be pausing to reassess the feasibility of development.”
The slowdown is occurring as monthly rental rates are soaring. The average condo rental hit $3.57 per square foot in the second quarter of this year, according to condo research group Urbanation Inc. The average monthly rent for a one-bedroom condo was $2,182 across the Toronto region.
Demand for rental units has increased owing to a number of factors. Would-be buyers are either continuing to rent or looking for a place to rent because they no longer qualify for a home loan now the cost of borrowing has spiked. As well, international students and Toronto workers have been returning to the city as most government COVID-19 restrictions have been lifted.
The Hastings district has seen a big drop in average house sale prices for August. Pictured is a residential street in Hastings. Photo / Warren Buckland
The average house sale price across the Hastings district has dropped to its lowest amount in 19 months, according to the Real Estate Institute of NZ.
However, one real estate expert says because the district
Bayleys Whanganui’s principal agent and sales manager Michael Bourne says the downturn in the city’s housing market began in late December. Photo / Bevan Conley
Property prices in Whanganui have dropped significantly in recent months, causing dilemmas for vendors and buyers alike.
Property Brokers’ Whanganui branch manager Ritesh Verma said that traditionally, the winter months were a little more difficult in real estate.
“Covid-19 reached its peak again within the last three months as well, and that has affected a lot of people in buying and selling. There is a trickle-down effect there.
“Obviously the rise in interest rates is a factor on top of that.
“When all those things come at once, it’s the perfect storm to drive down prices.”
According to OneRoof’s September House Price Report, the average property price in Whanganui is currently sitting at $578,000, down from $604,000 three months ago.
In Rangitīkei, average prices fell from $564,000 to $554,000.
Ruapehu jumped to $462,000, up from $458,000.
Verma said he couldn’t see the decreases going too much further in Whanganui.
“There is an increasing population, and still not enough houses.
“I also think vendors with high expectations and last year’s mindset probably need to realign themselves with the current market.”
Bayleys Whanganui’s principal agent and sales manager Michael Bourne said the turning point in house prices occurred in late December last year, with interest in properties starting to decline.
Now was a good time for first-home buyers, with far more properties for sale, and average days on the market for vendors “stretching out”.
“As such, more vendors are potentially willing to enter into negotiations,” Bourne said.
“Vega [financial advisers], who are part of the Bayleys team here, are seeing an uplift in applications from first home buyers. That is happening across the country.”
Shorter term interest rates – 12 to 18 months – remained quite stable and had been dropping in some instances, Bourne said.
“Interest rates were put up to slow the housing market, and that’s exactly what’s happened.
“That FOMO [fear of missing out] disappeared, and was replaced by the fear of overpaying instead.
“For those that want to sell, they’ve had to become conditioned to the market by pricing their property more attractively.”
OneRoof editor Owen Vaughan said there had been an 11 per cent decrease in purchases by first-home buyers in Whanganui for the first half of the year compared with 2021.
The Manawatū-Whanganui region had experienced a drop of 20 per cent.
The “biggest plunges” in house prices had been in rural and higher-value areas, Vaughan said.
First-home buyers were typically paying around $570,000 for property in the region.
That number stood at $350,000 in the first half of 2019.
“While that might be seen as bargain territory in Wellington or Auckland, it’s still a lot of money for that market, Vaughan said.
“That’s more mortgage debt to take on, more of a deposit, and the rising interest rates have made the costs of borrowing that much more expensive.”
In comparison, first-home buyers in Auckland were paying a median price of $1.05 million in 2022.
Holding off for too long to see if prices dropped further could be dangerous, Vaughan said.
“The market might start to pick up again, so first-home buyers are in a bit of a bind at the moment.
“The frantic situation they were finding themselves in last year, where prices were accelerating at an enormous rate – that factor is no longer there, though.
“It’s unlikely we’ll see that kind of price-rise again any time soon.”
No-one had a crystal ball, so it was hard to tell when prices would be at their lowest, Verma said.
“You can only know that when things start moving up again.
“I think the best thing is to be in the market, because then you’ve got a chance.
“If you don’t have to sell any time soon, then you just ride the waves of the ups and downs.”