Written By Em

Em Morley

Retired Homeowners Continue to Cash in at the Expense of First Time Buyers

Published On: March 22, 2017 at 9:57 am

Tags: first time buyers,homeowners,housing crisis,property wealth,retirement

Retired homeowners are continuing to cash in at the expense of the country’s hopeful first time buyers, shows new research from KeyRetirement.com.

Retired Homeowners Continue to Cash in at the Expense of First Time Buyers

The firm found that retired homeowners have earned £1.7m in property wealth in the last three months alone, with the property wealth of over-65s who have paid off their mortgage reaching a record high of £1.072 trillion in February.

Since KeyRetirement.com started its index in 2010, average retired homeowners have enjoyed an added £66,000 of property value – a 37% increase.

While the firm has been quick to praise the latest figures as a success story, online estate agent eMoov.co.uk doesn’t believe this is a positive story, particularly for those who are struggling to buy their own homes.

Nationwide figures show that the average first time buyer house price to earnings ratio across the UK is 5.3 – the highest since 2007. This is, of course, considerably higher in the nation’s pricier markets, peaking at 10.1 in London.

On top of that, recent house price indices from Rightmove and Halifax show that UK property values have continued their upward trend, despite the current turbulence in the market.

The CEO of eMoov, Russell Quirk, believes that this highlights a severe dysfunctionality in the property market and is a key contributor to the current housing crisis.

He explains: “Whilst those lucky enough to have climbed the UK property ladder continue to see their assets increase in value, beleaguered first time buyers continue to struggle, due to the constant inflation of UK house prices.

“This is by no means an attack on previous generations and anyone who has worked hard enough to earn their own piece of our pleasant land, regardless of what they paid at the time, should be commended for doing so, not ridiculed.”

He continues: “Most of us rely on our property investment for retirement and to leave a legacy to our children, but now it has reached a point where inheritance is the only viable method for the majority to get on the ladder, and many are holding out to maximise the amount they can make on their property.

“As a result, whilst they remain in large family houses years after their children have fled the nest, young families elsewhere are unable to get on the ladder due to a severe shortage of stock. This is undoubtedly a contributing factor behind today’s housing crisis and should be addressed and rectified, not celebrated as these latest figures seem to do.”

Tenants are spending half of their pay on rent

Published On: March 22, 2017 at 9:49 am

Author: Em Morley

Categories: Property News

Tags: mortgage interest tax relief,rent,rental payments,tenants

New research on the so-called Generation Rent has revealed that UK rents amount to almost half of tenants’ average take-home pay.

The investigation was undertaken by the University of Bristol, on behalf of financial services innovator Momentum UK. Data from the report shows that the typical renter is financially worse off than someone who owns their own property.

Tenant Traits

Further analysis of the report shows that private renters take fewer holidays and are able to save less money. In addition, they are more likely to make cutbacks due to larger affordability restrictions.

Momentum UK’s Index shows than 31% of private renters have less than £100 in savings. This is in comparison to 15% of people with a mortgage on their home. 37% of mortgage borrowers view their income as sufficient, in comparison to 16% of private renters.

Researchers revealed that renters send around half of their salary to their landlord every month. This is only likely to rise, given the fact that many landlords will be left with little alternative to increase rents to recoup losses caused by recent tax alterations.

These include alterations to stamp duty, scrapping the wear and tear allowance and upcoming changes to mortgage interest tax relief, scheduled for next month.

Tenants are spending half of their pay on rent

Growing Sector

Over four million households in the UK now rent from a private landlord, with this figure almost doubling in the last ten years.

Dominic Baliszewski, director of Consumer Strategy for Momentum UK, commented: ‘The average private renter loses around half of their pay cheque on rent at the beginning of each month, and for those living in London, it can be even higher. This not only limits their ability to save, but also means they have to cut back on expenses such as gym memberships, holidays and socialising just to get by.’[1]

‘With home ownership in decline, the number of people facing these financial challenges and seeing their living standards fall is only going to grow. That’s why it’s so important that the government delivers on the pledges made in its housing white paper,’ he added.[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2017/3/tenants-spend-half-their-pay-on-rent

The Front Door Colour that Could Help you Let your Property

Published On: March 22, 2017 at 9:20 am

Author: Em Morley

Categories: Landlord News

Tags: decor,interiors,lettings,property maintenance,property viewings,tenants

Competition in the lettings market becomes particularly fierce at this time of year, as tenants often look to move home during the spring. If you’re thinking of ways to better your chances of letting your property, it could be as simple as your front door colour.

The Front Door Colour that Could Help you Let your Property

It turns out that property viewers can sometimes be just as picky about the exterior of the home as they are about the interior, so making a good first impression with the front door colour is essential.

If you’re struggling to let your property or need to make some updates, simply giving the front door a fresh lick of paint could do the trick.

With the front door often being the natural route into a property, it is one of the most important external features to a prospective tenant, and one that they are likely to notice.

So which front door colour is the most popular choice?

According to a study by Westbury Windows & Joinery, painting your front door white could boost your chances of letting your property quickly.

As expected, stained and varnished finishes came in as the second most popular choice, with classy black in third.

Other popular front door colours include Oxford blue, post-box red and racing green – all very tasteful and timeless.

However, if you want to go for something more fashionable and on trend, paler tones such as grey, duck-egg blue and celadon green were also highly rated.

So which colours should you avoid? Painting your front door yellow, pink or lilac may well put potential tenants off!

When deciding on a front door colour for your rental property, remember to stick to classic colours or neutral shades – if in doubt, go white.

The research arrives following news that many first time buyers believe that it’s only possible to buy a home with a partner, meaning that around half of young people are living in rental homes.

Spruce up your front door colour in time for new tenants now!

More landlords diversifying to avoid tax increases

Published On: March 21, 2017 at 2:44 pm

Author: Em Morley

Categories: Landlord News

Tags: Buy-to-Let,landlords,property,tax,tax changes

According to Roma Finance, the specialist bridging finance lender, an increasing number of buy-to-let landlords are diversifying their portfolios by investing in semi-commercial property.

This is in order to protect their investments from higher rates of taxation.

Exemptions

Mixed-use property is presently exempt from tax increases coming into force next month. Landlords are looking to diversify their portfolios in order to offset stamp duty tax rises.

For example, a £500,000 residential buy-to-let property would command stamp duty of £30,000. However, stamp duty on a commercial or semi-commercial property of the same value would be only £14,000.

Investing in mixed-use property also gives investors two types of property, with potentially multiple source of rental income.

Recent lets from Roma include on a retail unit with flats above and pubs with houses attached.

More landlords diversifying to avoid tax increases

Diversify

Scott Marshall, managing director at Roma Finance, commented: ‘We’re seeing many landlords looking to diversify their portfolios and some are investing in semi-commercial units for the first time. They are keen to take advantage of tax efficient property types and also have another string to their bow when it comes to spending tax risk.’[1]

‘With a residential unit and a residential flat above, they are getting longer tenancies for the shop and good rental prices for the flat. We’ve funded conversions where separate entrances have been created for the different parts of the property and occasionally the exit route for the bridging loan has been to sell one of the units and retain the other,’ he continued.[1]

Concluding, he said: ‘Landlords and property investors are putting in place a variety of strategies to protect their portfolio from increasing taxation and semi-commercial property has a definite role to play in this as they look for new opportunities.’[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2017/3/more-landlords-diversifying-their-portfolios-to-avoid-increasing-taxation

Where are the best and worse places to sell property in the UK?

Published On: March 21, 2017 at 11:46 am

Author: Em Morley

Categories: Property News

Tags: Buy-to-Let,landlords,property,property market

A new investigation has revealed where the twenty best and worst places to buy and sell a property are located in England and Wales.

Quick Move Now has partnered with Home.co.uk in order to compile the list, which makes interesting reading.

Location, Location, Location

The property market in the UK has been seeing turbulence for several months. Tax changes implemented by then Chancellor George Osborne and the impending threat of Brexit has lead to much uncertainty in the sector. With Article 50 set to be triggered next week, this is likely to rise.

At present there is a feeling of positivity on the market, but the research shows this is dependent on location. Some regions are seeing an average property sale time of 76 days but others are seeing 295!

According to the report, the 20 worst places to sell a property in England and Wales by average days spent on the market are:

Sunderland-295
Rochdale-292
South Shields-275
North Shields-269
Bangor-269
Darlington-259
Oldham-254
Knightsbridge-249
Charing Cross-248
Vauxhall-246
Strand-244
Rotherham-243
Batley-243
Broadgate-243
Bootle-242
Westminster-241
Southwark-238
Mayfair-238
Belgravia-237
Grimsby-231

Where are the best and worse places to sell property in the UK?

On the other hand, the 20 best places to sell by average days spent on the market are:

Bedford-76
Bristol-79
Swindon-81
Waterlooville-83
Northampton-84
Portslade by Sea-85
Basildon-85
Rochester-87
Sutton-90
Watford-91
Reading-91
Milton Keynes-93
Gloucester-93
Woking-94
Luton-95
Cambridge-96
Redhill-97
Bracknell-97
Hove-100
Eastbourne-100

Slowdown

Danny Luke, Managing Director of Quick Move Now, commented: ‘In the last quarter of 2016, we have seen a significant shift of property slowdown from the north to the south. Increased time on market figures continue to highlight the slowdown in the Greater London and the South East.’[1]

Doug Shephard, director of Home.co.uk, also said: ‘It’s really Central London that’s suffered the worst slowdown to date, but it seems to be spreading. The property market in the South East has also slowed but not yet by the same extent. What’s more is that rents are following house prices and in Greater London: they are now going down. Buy-to-let lest investment, wary of overbought London and SE, is heading North in search of better yields. So if the trend continues we are going to be seeing fewer Northern locations in the worst 20 and more in London and the South East.’[1]

[1] http://www.propertyreporter.co.uk/property/where-are-currently-the-best-and-worst-places-to-sell-a-property-in-the-uk.html

Bath Named as next Spot for Legal & General Build to Rent Homes

Published On: March 21, 2017 at 11:36 am

Author: Em Morley

Categories: Property News

Tags: Bath,build to rent,housing supply,property investment,rental property

Legal & General has today announced that Bath is the next spot for its Build to Rent homes scheme.

Over 170 new Build to Rent homes will be built in Bath on the £47.5m city centre development site, as part of the firm’s wider approach to address the UK’s housing shortage.

Bath Named as next Spot for Legal & General Build to Rent Homes

This is Legal & General’s fourth Build to Rent homes scheme, with existing sites progressing well in Bristol, Salford and Walthamstow. It has £1 billion of firepower to invest in developing new large-scale rental development properties, which will provide rental income for pension funds to pay their pensioners, and create an economic stimulus for UK urban regeneration areas, delivering new jobs and growth.

The Roseberry Place development is ideally located on brownfield land in the Bath City Riverside Enterprise Area on the river, which represents the best opportunity to accommodate new development growth in the city.

The site will include 171 apartments, 126 car parking spaces and 17,000 square feet of retail space. It already benefits from outline planning, and Legal & General will be working closely with the developer to provide high quality Build to Rent homes within a city in need of additional housing supply.

The Bath scheme has been acquired by LGIM Real Assets on behalf of its Build to Rent fund, together with its joint venture partnership between Legal & General Capital (LGC) – the group’s principal investment arm – and PGGM – the Dutch pension fund manager.

The Build to Rent Fund Manager at LGIM Real Assets, Dan Batterton, says: “This acquisition is a prime example of the type of compelling opportunities there are in the market at the moment, as we continue to build our pipeline. We are targeting well-located sites where there is the opportunity to influence all aspects of design and construction from the start to create a best-in-class product that will provide a positive lifestyle choice for elective renters. We remain on track to deliver on the growth plans for our major Build to Rent platform, focused on holding assets for the long-term on behalf of investors.”

The Director of Housing at LGC, James Lidgate, also comments: “This latest acquisition is in line with our strategy of increasing our direct investment exposure to housing and establishing Build to Rent as an institutional asset class – investing Legal & General’s balance sheet capital, alongside other third party capital, to achieve high-quality risk adjusted returns.

“This scheme is an excellent example of the partnership’s asset acquisition strategy – investing in long-term, sustainable urban schemes that support wider urban regeneration by better utilising the local existing infrastructure, and maximising land density in areas where there is a shortage of housing supply.”