Written By Rose



Chancellor Urged to Scrap Stamp Duty in this Month’s Budget

Published On: November 7, 2017 at 4:13 pm


Categories: Finance News

The Chancellor, Philip Hammond, has been urged to scrap Stamp Duty in this month’s Autumn Budget on Wednesday 22nd November 2017.


The Adam Smith Institute says that axing Stamp Duty would help to solve the housing crisis and deliver a £10 billion boost to the economy.


The think tank believes that the tax is putting people off moving to new jobs and keeping households living in homes that are too large for their needs.


It says that Stamp Duty does so much damage that it is “almost as bad as setting fire to the money instead of raising it in tax”. Instead, the institute suggests raising Council Tax on the most expensive properties.


The institute’s Sam Bowman says: “Stamp Duty is the worst tax we’ve got. It is gumming up the housing market and keeping people trapped in the jobs that aren’t best for them.


“Scrapping it should be a no-brainer.”


Last year, Stamp Duty raised a record £11.7 billion for the Treasury – up from £10.7 billion in the previous year.


Steven Cameron, the Pensions Director at Aegon, looks at the generational impact of the controversial tax: “Hailed as the country’s most damaging tax by the Adam Smith Institute and swelling the Government’s coffers by as much as £12 billion last year, the property tax, Stamp Duty, has been in the spotlight this week.


“Seen as the root cause of our clogged up housing market, controversy is raging with what to do to make the system fairer. We’re very familiar with the situation first time buyers find themselves in, struggling to get on the property ladder, but we also need to reflect on Stamp Duty costs as a deterrent to downsizing. At the heart of the issue is older people in family homes, too large for their needs, discouraged from downsizing because of Stamp Duty, which is, in turn, preventing growing families from moving up the ladder.”


He continues: “But the impact goes beyond just the housing market, affecting those approaching and in retirement as well. It’s also a matter of fairness across the generations – a consideration that the Government has stated will shape future policies – and an issue that receives endorsement from the financial adviser community.


“The removal of Stamp Duty would help to encourage pensioners to downsize, freeing up family homes. For those pensioners who are property rich but cash poor, this would also offer a new means of funding their retirement. This could become increasingly important, as future generations of retirees will no longer benefit from the generous defined benefit pensions of today’s retirees.”


Cameron concludes: “For most people, whether in the younger or older generations, their two greatest financial commitments are their house and their pension. The Government needs to make sure its policies in these areas complement one another.”


Separately, an accountancy firm is calling for the Chancellor to make it more attractive for landlords to sell up if they want to.


Bishop Fleming’s Head of Tax, Andrew Browne, says that the Government is taxing landlords out of the rental market, through a reduction in mortgage interest tax relief, the 3% Stamp Duty surcharge and the withdrawal of the Wear and Tear Allowance. Landlords have also recently been subject to more stringent mortgage lending criteria.


Browne explains his concerns: “These recent changes are designed to hit private landlords, but what the Government has not done is to make it easier for those landlords to downsize their portfolios, or leave the sector completely, without incurring massive tax penalties. It has been all stick and no carrot from the Chancellor.


“Landlords face a Capital Gains Tax bill of up to 28% on any gains they make on the selling of properties, without any relief for the time a property has been held, or for inflation.”


He continues: “In the past, any gains would have been tapered depending on the length of ownership, and any increase in value purely through inflation would have been removed with an indexation allowance. Both these reliefs have been removed by successive governments, though indexation relief continues to be available to companies.


“The removal of taper and indexation reliefs has created a punitive retrospective tax on private landlords, who may have bought their properties many decades ago. Inflationary pressures are outside the control of landlords, so it is unfair that they should not get some measure of relief from gains that have arisen simply through inflation.”


What are you hoping to hear from the Chancellor in the Autumn Budget statement?




Interest Rate Hike won’t Affect Average Homeowner

Published On: November 1, 2017 at 9:03 am


Categories: Finance News

Tags: ,,,

An interest rate hike won’t affect the average UK homeowner, according to a leading property market expert.

The Founder and CEO of online estate agent eMoov.co.uk, Russell Quirk, claims that UK homeowners have little to worry about if an interest rate hike is introduced this week.

Property owners have enjoyed record low interest rates since they were slashed to 0.5% in 2009 and then further squeezed to 0.25% after the EU referendum last year.

But, with the economy outperforming wider predictions, it is highly likely that an interest rate hike will be brought in this Thursday (2nd November 2017), after the Bank of England (BoE) indicated that it was coming in the next few months back in September.

If rates do rise, eMoov reassures UK homeowners that they have little to worry about, as the result is unlikely to affect them financially.

Quirk explains: “If interest rates do increase this week, it is likely to be marginal to say the least and probably no higher than a return to 0.5%, which is actually the norm.

“This slight hike is designed to counter the rising level of inflation and will increase the monthly cost of some mortgages, in particular, variable rate loans and tracker deals.”

He continues: “But any increase in monthly payments, like interest rates themselves, will be marginal and manageable for those impacted. On the typical £150,000 loan, homeowners will be out of pocket around £15 to £30 a month, certainly no grounds to shout financial meltdown.

“I’m old enough to remember the unprecedented cost of money at a whopping 15% in 1989, resulting in homeowners posting their keys back to banks through their letterboxes. We’re leagues away from such a suffocating level and must not mistake this week’s likely tweak with anything more sinister or prohibitive.”

Quirk concludes: “House price growth and the market’s overall stability have been incredibly resilient despite the EU vote and a snap General Election. A few quid added to the average mortgage repayment will not deter this growth in the medium to long-term.”

Although you can be reassured by this news, it is always worth considering how an interest rate hike would affect you. Seek expert financial advice if you are concerned.

Landlords Urged to Prepare for Revenge Eviction Claims

Published On: October 31, 2017 at 10:29 am


Categories: Law News

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Landlords are being urged to set up basic procedures to protect themselves against revenge eviction claims.

Danielle Hughes, a solicitor at Kirwans law firm, says that many landlords are leaving themselves wide open to revenge eviction claims and property disrepair, by failing to put clear processes in place to deal with tenant issues.

The introduction of laws against retaliatory evictions – in which landlords are accused of evicting a tenant solely because they have made a complaint about the condition of the property – were brought in as part of the Deregulation Act 2015. The laws currently only apply to Assured Shorthold Tenancies (ASTs) entered into since 1st October 2015, but will apply to all ASTs from 1st October 2018.

According to Hughes, landlords are now at an increased risk of seeing their claims for possession defeated in court, as tenants gain a greater understanding of the new retaliation eviction legal defence.

She explains: “Landlords may be shocked to discover that tenants could potentially successfully fight a claim for possession based on what has until recently been known as the non-fault eviction process.

“This defence can not only invalidate a Section 21 Housing Act notice and lead to the judge striking out a claim, but can also prevent a new Section 21 notice being served for six months.”

She continues: “There is a particularly strong chance of this happening in cases where landlords have failed to deal effectively with complaints and have had an improvement notice or an emergency remedial action notice served on them by the local authority.”

Hughes advises landlords to actively encourage tenants to report any problems with the property to them in writing at the earliest opportunity, to avoid the issue escalating to the point where the local authority becomes involved.

“The law sets out that landlords must provide an adequate response to complaints within 14 days of receipt,” she says. “The belt and braces approach is to inspect the property regularly and undertake any work required within a reasonable timeframe, depending on the works required.”

Hughes adds: “Most landlords pride themselves on being responsible, and are keen to be made aware of issues with a property so that they can both protect their asset and continue to provide safe and secure homes for their tenants.

“Keeping properties in good repair is not only preferential, it’s also essential to avoid other legal action being taken, such as housing disrepair claims, a hazard notice being served by the local council, and investigations into a breach of licence conditions, with the latter two carrying risk of criminal sanctions.”

There are cases in which landlords carrying out genuine evictions will be legally protected, including situations where the tenant has caused the disrepair, if the property is genuinely for sale on the open market (not to family, friends or business partners), and if, at the date of the Section 21 notice, the mortgage lender requires vacant possession to sell the property.

“However,” Hughes continues. “It goes without saying that the best approach is for landlords to be proactive in managing their property to ensure they’re not accused of a retaliation eviction in the first place.”

Hughes has her key tips for landlords to protect themselves against revenge eviction claims:

  1. Be aware of your repair obligations as set out in the AST and under Section 11 of the Landlord & Tenant Act 1985.
  2. Make open channels of written communication available so that tenants are able to report any problems.
  3. Implement a system whereby you respond to any written complaint within 14 days of receipt. If you will be away, then arrange for someone to monitor this for you. If a letting agent manages the property, ask them about their process for responding, to ensure they are doing so in a timely manner, as ultimately the landlord bears the overarching responsibility for repairs and responses.
  4. Put in place a schedule for any works to be completed within a reasonable timeframe, depending on the nature of the work needed.
  5. Keep records of your responses to the tenants in case the details are ever needed in court.
  6. Keep a log of any repair work you have undertaken.
  7. Retain any evidence you might have of occasions on which tenants have refused to allow access to the property for inspections or for repair work to be undertaken. This could prove vital.
  8. Most importantly, check whether there are any outstanding complaints with the property and address any such issues before service of notice under Section 21.

Scottish Landlords Achieving Strong and Stable Rental Yields

Published On: October 31, 2017 at 9:51 am


Categories: Landlord News

Tags: ,,,

The rental yields achieved by Scottish landlords remain highly competitive when compared to other asset classes, according to the latest index from Your Move Scotland.

The average rent north of the border reached £574 per month in September, which is broadly in line with the price recorded in August and in the same month last year.

Four of the five Scottish regions experienced rent price growth in the 12 months to September, led by increases in the Highlands & Islands, where prices are 5.6% higher than last year, hitting an average of £610 a month, which is significantly higher than the £576 seen in September 2016.

Scottish Landlords Achieving Strong and Stable Rental Yields

Scottish Landlords Achieving Strong and Stable Rental Yields

The next highest growth was recorded in Edinburgh & the Lothians, where the average rent rose by 4.5% in the past year to reach £669 a month, which is the highest average rent price in Scotland.

Glasgow & Clyde was the only region to witness a year-on-year rent price drop, with the average value down by 6% to £541 in September, from £579 in the same month last year.

According to Your Move, Scottish landlords achieved an average rental yield of 4.8% in September, which, although down slightly from the 4.9% recorded in August, is a significantly higher return than the majority of properties in England and Wales achieve, which is an average of 4.4%.

Only landlords with properties in the North East and North West of England enjoyed higher average yields than those in Scotland.

The Lettings Director of Your Move Scotland, Brian Moran, says: “With four of the five regions of Scotland showing price growth in the last 12 months, things are looking up for Scottish landlords. Returns remain highly competitive and landlords are enjoying greater stability from their tenants.”

However, Moran is urging all landlords in Scotland to prepare for upcoming changes to legislation.

From 31st January 2018, the Letting Agent Code of Practice will come into force, and agents will have to declare themselves compliant with the new scheme.

Letting agents will be legally required to join a register of agents, and Your Move Scotland is calling on landlords and property investors to enquire with their current agent as to whether they are complying with the new rules.

Letting agencies must have submitted an application to join the Code of Practice by 30th September 2018. From that point, it will be a criminal offence to conduct letting agency work if you are not on the register.

Those breaking the rules, which are intended to increase professionalism in the sector and ensure that agents are able to handle money from landlords and tenants effectively, could face a fine of up to £50,000 and up to six months’ imprisonment.

“The upcoming introduction of the Letting Agent Code of Practice means landlords should ensure their agent is ready for the changes,” Moran adds.

The UK’s Top 10 Spookiest House Price Drops of the Year

Published On: October 31, 2017 at 9:01 am


Categories: Property News

Tags: ,,

It has been a particularly spooky year for some UK property owners, with Brexit and a snap General Election bringing an uncertain market. Some property owners have seen the price of their homes drop in line with a lack of buyer demand.

In light of Halloween and all the ghastly things that come along with it, hybrid estate agent eMoov.co.uk has compiled a list of the top ten areas of the UK that have suffered the scariest house price drops of the past year…

The UK's Top 10 Spookiest House Price Drops of the Year

The UK’s Top 10 Spookiest House Price Drops of the Year

  1. Aberdeenshire: -5.69% 

Topping the list is Scotland’s Aberdeenshire, which suffered the frightening price drop of 5.69%. Although property values in Scotland remain lower than the UK’s average, this part of northern Scotland has been hit hardest over the last year, with a typical house price of £188,876 – largely dye to the continued economic slump from a decline in the oil industry.

  1. City of London: -5.59%

Prices in the capital have taken a spine-chilling turn over the last 12 months – not because of ghosts or zombies – but instead because of the inflated price of property. The City of London has endured a decrease of 5.59%, although prices still average £800,802.

  1. Hartlepool: -5.35%

Durham’s Hartlepool follows closely behind, with a drop of 5.35%, taking the average property value to £100,957.

  1. City of Aberdeen: -4.81%

Keeping up with the wider area, the largest city in the region has seen a spooky dip in house prices, down by 4.81% over the year to an average of £167,903.

  1. Halton: -4.62%

Heading back to England, Cheshire’s Halton has suffered a haunting fall in average values of 4.62%, taking prices to £127,003.

  1. Middlesbrough: -3.21%

North Yorkshire’s Middlesbrough experienced a decline of 3.21% in average house prices over the year, bringing the typical value down to £108,904.

  1. Rhondda Cynon Taf: -3.14%

Wales’ darkest price decline was 3.14% in the south, dropping the average house price to an almost supernatural £101,675.

  1. Carlisle: -2.98%

In Cumbria, the average property value in Carlisle has trickled down by 2.98%, leaving it at £129,425.

9 & 10. City of Westminster & Hyndburn: -2.46%

Another contender in the capital, prime central London’s City of Westminster experienced a grim drop of 2.46% to a devilish average of £962,510. Lancashire’s Hyndburn accompanies it, where property values also fell by a gruesome 2.46% to an average of £93,628.

Russell Quirk, the Founder and CEO of eMoov, comments: “Although the current state of the UK market may appear scary, the haunting uncertainty that came with the snap election and the referendum has begun to slowly vanish, so we should start to see positive price growth creep across the majority of the UK before next Halloween.”

Buy-to-Let Mortgage Rates Rising from Record Lows

Published On: October 30, 2017 at 10:57 am


Categories: Finance News

Tags: ,,

The buy-to-let market has been hit from all sides of late, with tougher affordability rules and key regulatory changes. Now, to make matters worse, buy-to-let mortgage rates are rising from record lows.

According to the latest data from Moneyfacts.co.uk, the average buy-to-let mortgage rate is on the rise. In fact, since 1st October 2017, the average two-year fixed rate has increased by 0.05% and is on target to get back to the rate seen in September, before the latest set of lending changes came into force.

At present, the average two-year buy-to-let fixed rate is 2.84% – up from 2.79% at the start of October, but down from 2.86% in September.

Meanwhile, the average five-year fixed rate is 3.44% – up from 3.43% at the beginning of the month, but down from 3.49% in September.

Buy-to-Let Mortgage Rates Rising from Record Lows

Buy-to-Let Mortgage Rates Rising from Record Lows

Moneyfacts also recently reported that the number of buy-to-let mortgages available has dropped slightly.

The Finance Expert at Moneyfacts, Charlotte Nelson, says: “It has been a turbulent time for the buy-to-let market, thanks to multiple rule changes, and there’s no sign of calmer waters, as rates are starting to creep up from their record lows. While a 0.05% increase appears insignificant, it marks a turnaround in the buy-to-let sector, so landlords are now faced with not only more hoops to jump through, but higher rates as well.

“As in the residential mortgage market, much of the rise in buy-to-let rates can be attributed to base rate speculation causing swap rates to increase significantly. This has given lenders little choice but to increase their mortgage rates, with 18 individual providers so far having upped theirs since the start of September.”

She continues: “The beginning of this month marked another significant change in the buy-to-let mortgage market, as lenders are now required to apply stricter underwriting criteria to portfolio landlords. This has seen the buy-to-let mortgage market shift away from landlords who have three or fewer properties, with a 13% drop in the number of products available to this group since the start of October.

“This portfolio change may have had a more practical effect on rates as well, with lenders not just being a little more cautious; some lenders may have had to change their process behind the scenes to accommodate the new rules, and this extra cost may be impacting these providers’ pricing activity.”

Nelson concludes: “With all the changes and now the rising buy-to-let rates, it is going to be more difficult for individual landlords to make a profit that is worth their efforts. Landlords will have to weigh up the costs to figure out what their best possible option may now be. Anyone who is unsure should seek the advice of a financial adviser.”

Meanwhile, specialist lender Together is further enhancing its offering for landlords and property investors with a new holiday let product, which has been created in response to demand from professional landlords looking to let their properties on a short-term basis.

A growing number of investors are turning to holiday lets as an alternative to traditional buy-to-let, thanks to attractive rental yields and websites like Airbnb, which have revolutionised the holiday let sector.

Market demand for holiday lets is buoyed by record numbers of tourists visiting the UK, estimated to be 40m this year, and more Britons staying at home for their holidays post-Brexit.

Marc Goldberg, the Commercial CEO at Together, comments: “Our aim is to support landlords and investors by providing innovative finance products that are tailored to their needs. Holiday lets can deliver high yields and there’s strong market demand, so we’re delighted to launch this new product, which we believe will complement our existing offering in this sector.”

Loans of up to £2m are available for purchase or remortgage, while terms range from four to 30 years, with a minimum five-year term on fixed rate loans.

The holiday let product is also available on a second charge basis, for landlords looking to raise additional finance on their rental property.