Written By Em

Em Morley

Good start to 2017 for Scotland’s rental market

Published On: March 10, 2017 at 9:49 am

Tags: Buy-to-Let,landlords,rents in Scotland,Scotland,scottish rental market

The lettings market in Scotland has enjoyed a positive start to 2017, according to the latest Your Move Scottish buy-to-let index.

Average rents north of the border currently stand at £571 per month, with Edinburgh and the Lothians seeing the strongest growth. Rents rose year-on-year here by 3.3%.

Rental Regions

Regions in the East of Scotland, including Fife, Dundee and Perthshire, remain the cheapest places to rent.

The highest rents were evident in the Highlands and Islands, with average rents totalling £584. However, rents here are down by 4.3% in comparison to twelve months ago. In the South, typical rents rose by 2.7%.

One other region that saw a year-on-year fall was Glasgow and Clyde, where prices have gone down by 0.9% since January 2016 to hit £566.

Taking Scotland as a whole, the £571 average rent seen in January 2017 was £2 cheaper than in December 2016 and £23 more expensive than the £548 recorded in January 2016.

Good start to 2017 for Scotland’s rental market

Yields

During January 2017, the average rental yield in Scotland was 4.9%, the same as in January and December 2016. This yield is particularly strong in comparison to other regions of the UK.

Average rental yields in England and Wales in January stood at 4.6%. Only landlords in the North East and North West regions of England saw stronger returns, of 5.3% and 5% respectively.

Brian Moran, lettings director of Your Move, said: ‘It was a strong start to the new year for many landlords across Scotland as rents continued to perfom well. Edinburgh and Lothians is the best performing region with prices growing faster than anywhere else in Scotland.’[1]

‘Despite new Government rules which cut tax relief on buy-to-let properties, yield levels have remained strong in the past 12 months. Yields are exactly the same as a year ago and this suggests the Scottish rental market continues to attract quality investment into its housing stock,’ he added.[1]

[1] http://www.propertywire.com/news/uk/positive-start-2017-scottish-rental-market-latest-buy-let-index-shows/

Londoners Splashing Out on Home Improvement Jobs

Published On: March 10, 2017 at 9:11 am

Author: Em Morley

Categories: Property News

Tags: DIY,home improvements,London,maintenance,refurbishment,tradespeople

Many Londoners are splashing out on home improvement jobs, with 82% of homeowners in the capital conducting DIY tasks each month in 2016, according to new research by Portico London estate agents.

Londoners Splashing Out on Home Improvement Jobs

Almost 20% of Londoners spent over £1,000 on home improvement jobs during the year, with B&Q voted the number one place to buy their materials, closely followed by Homebase.

However, despite the capital being full of keen DIYers, 70% of Londoners said they also paid for work to be done around their homes in 2016, with over half spending more than £1,000 on tradespeople or maintenance services last year.

Although plumbing and electrical work – the most specialist tasks – were the most common home improvement jobs that Londoners forked out for, one in three homeowners in the capital also paid to have painting and decorating work done, while 28% paid for gardening or outside work.

Interestingly, the study also found that Londoners would also pay a tradesperson to complete a number of relatively straightforward and small jobs around the home – 21% would pay for someone to fix or change a light, and 11% would splash out for a tradesperson to hang up their shelves.

This could be put down to the growth in availability of tradespeople for smaller home improvement jobs on new online sites, with Londoners rating recommendation as the number one thing they look for in a tradesperson, over price, expertise and good reviews.

The Managing Director of the estate agent, Robert Nichols, comments: “In today’s market, if you’re thinking of selling, it’s imperative your house is looking its best, whether that’s with a fresh lick of paint, a new bathroom or kitchen, or improved kerb appeal. Home improvements will not only boost the value of a property, they’ll also lead to a quicker sale, so hiring a handyman is certainly not a false economy.

“In fact, if you find a competitive day rate and get all your DIY jobs in one sweep, hiring a handyman or tradesman can actually be very cost-effective.”

Landlords, do you pay someone to complete small home improvement jobs in your properties, or do you do them yourself?

Property supply rose by 13.3% in UK during February

Published On: March 9, 2017 at 2:32 pm

Author: Em Morley

Categories: Property News

Tags: Buy-to-Let,housing,new property listings,property market

There are encouraging signs that the lack of supply in the UK property market might just be easing, if the latest report from HouseSimple is anything to go by.

According to the firm’s data, the number of properties for sale was up by 13.3% in towns and cities of Britain during February.

In all, supply rose in 83.7% locations.

Supply Rises

Warwick led the way, with new listings increasing by 76.2% over the course of the month. In Edinburgh and Carlisle, supply rose by 59.7% and 54.6% respectively.

Other regions to see a soar in supply were Lancaster (48.1%), High Wycombe (42.2%), Darlington (40.8%), Grimsby (40%) and Chester (39.5%).

However, supply fell most prominently in Bottle (-12.6%). Guildford (-12.4%), Salford (-8.5%), Chelmsford (-7.9%) and Nuneaton (-7.5%).

Apart from High Wycombe in the South East and Warwick in the Midlands, all main rises in new listings are located in the North. On the other hand, the locations where supply is falling most are in the South and East.

Property supply rose by 13.3% in UK during February

Capital Gains

At 4.7%, the rise in supply in the capital was less than half of that recorded in the UK as a whole. This said, some areas did see some sizeable rises in new listings. Kensington and Chelsea saw a rise of 23.1% and Lambeth saw rises of 20.4% during February.

Alex Gosling, Chief Executive of HouseSimple, said: ‘The market needs a boost in supply and it’s encouraging to see that new listings are up in February, albeit that we would typically expect numbers to rise in the coming months as sellers list their properties in time for the Spring market.’[1]

‘What’s more encouraging is that new stock levels are higher than October 2016 and only slightly short of September 2016, both traditionally strong months for the property market. Now we need to see buoyant listings figures in March and April because the buyers are definitely there and thanks to the continued competitive mortgage deals still on offer, they are committed to purchasing,’ he added.[1]

[1] http://www.propertywire.com/news/uk/property-supply-13-uk-towns-cities-last-month/

Tenant demand increases for third straight month

Published On: March 9, 2017 at 12:29 pm

Author: Em Morley

Categories: Property News

Tags: Buy-to-Let,landlords,private rental sector,tenant demand,tenants

The most recent report from the Residential Institute of Chartered Surveyors (RICS) reveals that new buyer enquires remained flat during February.

However, in the lettings market, tenant demand rose for the third consecutive month, with 15% more respondents to the RICS survey seeing an increase.

Increased Demand

However, this rise in demand is more modest than at the same period 12 months ago, when 29% respondents cited a rise.

New landlord instructions also fell, with a net balance of -10%. This is the slowest reading in over two years. This negative trend is likely to persist in the next couple of months, with changes to mortgage interest tax relief starting to take effect in April.

As a result, rental expectations remain positive, with 24% more people asked feeling good about the coming months. The survey reveals that respondents predict rents to rise by 2.7% in the next year.

During the next five years, this growth is expected to rise to 4.4% per year.

Tenant demand increases for third straight month

Challenges

Stephen Wasserman, Managing Director of West One Loans, noted: ‘The persistent supply vs. demand challenge plagues the property market, with landlords looking to capitalise on strong demand having to overcome sustained supply-side issues. The changes to buy-to-let taxation are likely encouraging some to put the brakes on their investments but, with many hungry renters, landlords shouldn’t walk away completely. Perseverance is likely to deliver results, and we’ve seen both in the BTL market and the linked bridging finance market a significant switch by professional landlords, to buying through limited companies and other methods to mitigate the tax changes.’[1]

‘The government and private sector are working to rectify the supply issue, but this will take time and there are opportunities for investors in the interim too. Indeed, at the end of last year we saw a significant recovery in the bridging loan market after stutters provoked by the summer’s economic storms. We anticipate this trend will continue as the housing supply is squeezed and investors are ever more likely to need quick and flexible financing options to enable them to move quickly and push deals across the line. The industry has to respond, there are opportunities out there and pace is key,’ Wasserman added.[1]

[1] http://www.propertyreporter.co.uk/property/tenant-demand-rises-for-third-consecutive-month.html

Tax Changes Restricting Access to Homes for Vulnerable Tenants

Published On: March 9, 2017 at 10:38 am

Author: Em Morley

Categories: Landlord News

Tags: landlord taxes,mortgage interest tax relief,rent prices,tax changes,tenants

The Government’s tax changes for landlords are restricting access to rental homes for vulnerable tenants, warns new research.

Tax Changes Restricting Access to Homes for Vulnerable Tenants

Following yesterday’s Budget that failed to address the housing crisis, the Residential Landlords Association (RLA) is highlighting figures that show that surveyors believe private sector rents will rise by more than 20% over the next five years, severely restricting access to homes for vulnerable tenants.

The forecasts arrive just weeks before changes are introduced that will mean landlords are taxed on their turnover rather than profit, and mortgage interest tax relief will be reduced to the basic rate of Income Tax.

The new research confirms assertions by David Miles, a former member of the Bank of England’s Monetary Policy Committee, that rents will be pushed up by between 20-30% in order for landlords to offset the impact of the measures, alongside the Stamp Duty surcharge on the purchase of investment properties.

Research by both the Council of Mortgage Lenders and Paragon Mortgages has, in recent weeks, suggested that landlords are already raising rents. This echoes concerns first raised by the RLA in its own study conducted shortly after the tax changes were announced.

According to the research released by the Royal Institution of Chartered Surveyors, around one third of those who responded believe vulnerable tenants are finding it more difficult to access rental housing.

Last year, Dame Kate Barker, who authored an independent review of UK housing supply for the Government, issued a warning that the tax changes risked vulnerable tenants losing their homes, “because the buy-to-let landlord no longer finds the yield acceptable or can’t afford it”.

The Policy Director of the RLA, David Smith, responds: “Today’s survey is a reminder that it is tenants who will ultimately suffer as a result of the Government’s punitive tax changes.

“We need a tax system that supports rather than hinders housing growth, but yesterday’s Budget did nothing to achieve this, despite repeated warnings from the RLA and others over the last 18 months that these changes would have negative effects on landlords and tenants.”

He adds: “Even at this late stage, we call on all sides to work with the RLA as it develops its own blueprint for a sector that provides the homes to rent we so desperately need.”

Is the Government, ‘wiping out the buy-to-let economy?’

Published On: March 9, 2017 at 10:08 am

Author: Em Morley

Categories: Finance News

Tags: Budget,buy to let market,landlords,mortgage interest tax relief,tax

The Chancellor’s failure to add any further or amend any existing tax reforms will only serve to have far-reaching consequences for the buy-to-let market, according to one industry peer.

Plans to remove landlords of mortgage interest tax relief will have a ‘detrimental impact’ on households throughout the country, according to David Hannah, principal consultant of Cornerstone Tax.

Tax Relief

From April, landlords, will begin to lose the right to deduct their entire mortgage interest costs at the rate they pay income tax, which is currently up to 45%. When the changes are fully implemented by 2020, the maximum will be 20%.

Mr Hannah has criticised the move, claiming it will only result in higher rents for tenants across the UK.

In response to yesterday’s Budget, Hannah said: ‘With real estate representing 21% of the UK economy, it is a mystery as to why the Government persists in hindering a crucial sector, by creating an unnecessary burden on tenants, landlords and homeowners.’[1]

He describes the changes to mortgage interest tax relief and the 3% additional Stamp Duty as a ‘double-blow effect wiping out the buy-to-let economy.’ He feels that this, ‘doesn’t chime with the current socio-economic needs of the UK.’[1]

Is the Government, ‘wiping out the buy-to-let economy?’

Demand

Continuing, Mr Hannah observed: ‘The demand for rental accommodation is set to rise by one million households in the next five years-a combination of restricted access to mortgage finance, unaffordability created through eye-watering SDLT rates and a shift in labour market trends towards a more mobile workforce.’[1]

‘Yet the government continues to breakdown the very sector that has absorbed change and provided homes for those who simply either cannot afford or do not wish to commit to homeownership. With the sector currently in its fourth consecutive quarter of decline, paired with a fall in homeownership rates, we are fast approaching a new type of housing crisis.’[1]

Obsession

Moving forwards, Mr Hannah wants to see the Government stop, ‘their obsession with homeownership’ and to, ‘think carefully’ about what the country needs.

He wants to see, ‘an accessible, flexible and affordable housing supply’ and feels, ‘the private rental sector, where buy-to-let landlords are a major contributor, provides just that.’[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2017/3/the-government-is-wiping-out-the-buy-to-let-economy