Search Results For: buy to rent sector

BTL mortgage rates cut to boost market

Published On: April 15, 2016 at 11:35 am

Tags: buy to let mortgages,Buy-to-Let,buy-to-let landlords,landlords,mortgage rates,Stamp Duty

Mortgage lenders are cutting rates on products intended for buy-to-let landlords in a bid to give the market a boost in the wake of the stamp duty deadline passing.

Cuts

Comparison website Moneyfacts says that the average two-year fixed buy-to-let mortgage rate currently stands at 3.32%. This is down on the 3.59% recorded at the same time last year and substantially lower than the 4.03% average shown in April 2014.

The average five-year fixed rate deal for buy-to-let landlords is presently 4.0%, in comparison to 4.37% in April 2015 and 4.76% two years ago.

Charlotte Nelson, a spokeswoman for Moneyfacts, said, ‘while the new tax rules and stamp duty changes could potentially take the shine off buy-to-let investment, property is often seen as a safe bet and with rental properties in demand and rent high, buy-to-let remains an attractive proposition.’[1]

‘A year on from pension freedoms, almost £3bn has been paid out in cash lump sum withdrawals, so it’s highly likely that some of this money has been accessed with buy-to-let in mind,’ she added.[1]

BTL mortgage rates cut to boost market

Downwards

Analysts from Moneyfacts have noted that savings rates are so low that many retirees investing in buy-to-let following changes to pension rules are starting to look elsewhere. A separate investigation underlines how the majority of retiree landlords are dependent on their rental income.

Lenders are keen to avoid this group of investors to consider their options, therefore are offering some of the best rates the sector has witnessed. What’s more, rates were already low in the run up to the stamp duty changes, which has further aided the downward spiral of rents.

Concluding, Nelson said, ‘while the current pressures on the market are not yet causing rates to rise, borrowers should remember that they will now be facing tighter lending rules, including stricter affordability checks, so it is even more important for potential to seek financial advice to see if buy to let really is the right option for them.’[1]

[1] https://www.lettingagenttoday.co.uk/breaking-news/2016/4/lenders-try-to-bolster-flagging-buy-to-let-market

Should Landlords Form Limited Companies to Avoid Tax Changes?

Published On: April 15, 2016 at 11:02 am

Author: Em Morley

Categories: Landlord News

Tags: large-scale landlords,limited companies,mortgage interest tax relief,property investors,Stamp Duty

Landlords should weigh up the costs of setting up a limited company in order to avoid tax changes, advises the Managing Director of the Association of Residential Letting Agents (ARLA), David Cox.

Speaking at the ARLA conference earlier this week, Cox told landlords to consider whether the costs of incorporating will create savings compared with the reduction in buy-to-let mortgage interest tax relief and higher Stamp Duty rates.

Should Landlords Form Limited Companies to Avoid Tax Changes?

From April 2017, the amount of mortgage interest that can be offset against tax will be cut for landlords, while buy-to-let investors and second home buyers have been subject to a 3% Stamp Duty surcharge from 1^st April.

Finance expert Paul Mahoney, of Nova Financial, has advice on how these changes will affect you: /contrary-to-popular-belief-buy-to-let-is-not-dead-insists-finance-firm/

At the conference, Cox claimed: “Landlords will make losses. They have to do the maths to see if incorporating would make them better off.”

Those operating as limited companies will be exempt from the mortgage interest tax relief reduction, however, large-scale investors are still subject to the higher rate of Stamp Duty, as confirmed in the Budget 2016.

Cox believes that there is still a great need for letting agents, as the private rental sector is constantly undergoing changes to regulation and legislation.

The conference focused on whether institutional investment in buy-to-let will threaten smaller landlords.

“There is a big shortage of housing stock,” stated Cox. “Even if institutional landlords build 100,000 a year extra, we would still be 150,000 short.”

He insisted: “There will always be a role for private landlords.”¹

Cox expects a flood of rental properties to go onto the market in the second quarter of this year, as landlords rushed to purchase further investments ahead of the Stamp Duty change.

However, he predicts that the market will get quieter in the second half of the year, as landlords struggle to accommodate the financial changes. This forecast arrives as the Royal Institution of Chartered Surveyors says that it expects house prices and sales to fall in the coming months.

Remember to keep up to date with the goings on of the property market and buy-to-let sector at LandlordNews.co.uk.

¹ http://www.propertyindustryeye.com/26801-2/

Prices and Sales May Fall Due to Stamp Duty Changes and EU Referendum

Published On: April 15, 2016 at 10:16 am

Author: Em Morley

Categories: Property News

Tags: EU referendum,house prices,property sales,Stamp Duty

The EU referendum and changes to Stamp Duty for landlords have caused uncertainty in the housing market, which could lead to a fall in house prices and property sales, according to the Royal Institution of Chartered Surveyors (RICS).

For the first time since 2008, more property professionals are expecting sales to drop rather than rise in the near future, says the latest monthly report from the RICS.

Prices and Sales May Fall Due to Stamp Duty Changes and EU Referendum

The expected decline in activity comes after a busy start to the year, as buy-to-let landlords rushed to complete sales ahead of the 3% Stamp Duty surcharge on 1^st April. The RICS reports that agreed sales have increased for the fourth consecutive month as a result.

The organisation says that most UK regions experienced house price growth in March, while property prices have increased every month for the past three years on a national level.

However, London has not followed the trend, with prices falling in some areas. The RICS believes that uncertainty over the EU referendum and the London mayoral election will continue to contribute to decreasing prices. Of the surveyors working in central London, 38% more predict that house prices will fall rather than rise in the next three months.

The Chief Economist at the RICS, Simon Rubinsohn, says: “Elections inevitably bring with them periods of uncertainty in the market, and our figures would suggest that May’s devolved elections are no exception. Likewise, the EU referendum is likely to be an influence in terms of the damper outlook, for London in particular.”¹

John King, of London-based estate agent Andrew Scott Robertson, reports that activity picked up ahead of the Stamp Duty change. He comments: “The outcome is likely that we will see a slowdown in sales occurring while outside events surrounding currency rates and employment levels undermine confidence.”¹

The latest Credit Conditions Survey from the Bank of England found that banks and building societies are also expecting buy-to-let mortgage lending to drop significantly in the coming months.

Additionally, the Council of Mortgage Lenders has reported that buy-to-let landlords seeking to complete purchases before being hit with the higher tax rate boosted activity in the first three months of the year.

Property sales in England and Wales were at a nine-year high in March, says LSL Property Services. It is therefore unsurprising that sales levels will come down from this peak in the coming months.

¹http://www.theguardian.com/business/2016/apr/14/house-prices-sales-fall-stamp-duty-brexit-election-rics

Many Tenants Experiencing Problems with Their Landlord

Published On: April 12, 2016 at 2:44 pm

Author: Em Morley

Categories: Landlord News

Tags: bad landlords,housing,London,private rental sector,tenants

More than half of all tenants in London and the South East have experienced problems with their landlord, according to a new study. One of the most common issues is failing to have repair work completed on their rental properties.

The survey by Tenants Plus found that having to deal with bad landlords is the biggest worry of tenants, beating sky-high letting agent fees and rent rises.

Many Tenants Experiencing Problems with Their Landlord

The research also found that around 40% of hopeful tenants have to view up to five properties before finding a home due to fierce competition in the private rental sector.

The process of finding a rental property is also becoming increasingly stressful, with four in ten tenants worried about the cost of moving home. More than half of the 597 members of generation rent surveyed are worried about problems with their landlord.

Additionally, 4% of tenants in London and the South East said they fear being evicted from their properties. This is the highest rate in Britain and double the national average.

London’s private rental sector has boomed in recent years, as spiralling house prices push the capital’s prospective first time buyers out of homeownership.

At present, around a quarter of Londoners rent from private landlords. It is believed that by 2025, just 40% of those living in the capital will own their own home, compared to 60% in 2000. Shockingly, three quarters of young Britons believe they will live in the private rental sector forever.

In the last ten years, the rental market has been growing by an average of 17,500 households per month.

Research by housing charity Shelter found that around half of those living in private rental accommodation have had to borrow money to cover their rent.

Data from the Government shows that rent prices rose by 19% in London over the last five years, with the typical two-bedroom flat now costing over £1,600 per month.

Tenants Plus’s Wayne Treveil comments on the findings: “It is not agents and landlords that are the main offenders here, but successive governments that do not deliver on new housing promises.

“There is an obvious need for the Government and next mayor to prioritise more stable tenancies and commit to building the genuinely affordable homes young Londoners are desperate for.”¹

The Residential Landlords Association (RLA) has recently released its London mayoral manifesto, which details the changes it hopes to see under the new mayor. It includes the call for the mayor to take action on the number of empty homes across the capital.

¹http://www.standard.co.uk/news/london/bad-landlords-are-biggest-bugbear-for-private-tenants-a3222376.html

CEO of lettings agency in scathing attack on the government

Published On: April 11, 2016 at 10:54 am

Author: Em Morley

Categories: Property News

Tags: Buy-to-Let,landlords,private rental sector,reforms,rental market

A chief executive officer of a leading lettings agency has slammed the Government’s performance for its first year in office.

Writing in the property magazine Estates Gazette, Ian Wilson, chief executive of Martin & Co, gave David Cameron just two out of ten in a ‘scorecard exercise.’

Performance

Mr Wilson’s analysis focused on how policies implemented or announced in the last twelve months have impacted on the residential property market.

In the last year, cuts in landlords’ mortgage interest tax, the rises in stamp duty on buy-to-let transactions, Right to Rent immigration checks and alterations to Wear and Tear allowance have all had impacts on the sector.

Wilson is particularly damning in his assessment, noting, ‘the Conservative government has failed the private rental sector. Unintended consequences of the reforms are emerging, with residential landlords fighting to complete on properties before April, pushing first time buyers aside. House prices are artificially high in the UK because of restrictions on land use dating back to World War 2.’[1]

CEO of lettings agency in scathing attack on the government

Solutions

Continuing, Wilson said, ‘the private rental sector has been superb in providing housing solutions for those unable to buy a home and as such, the sector has doubled in the last 20 years, organically and with no government support. Individuals have invested in the buy-to-let sector out of their own pocket, made feasible by allowing the interest on a Buy to Let loan to be offset as a business expense.’[1]

‘The changes the Conservative are imposing have not only caught people off guard, undermining confidence in a highly valuable sector of the market, but have deliberately penalised small time landlords, the stalwarts of the sector. Meanwhile corporate organisations, who have offered little in the way of housing solutions, retain in all tax benefits. The government needs to think hard before using a blunt instrument in a fragile housing market as it could have far longer term implications,’ Wilson added.[1]

[1] https://www.lettingagenttoday.co.uk/breaking-news/2016/4/agency-chief-gives-cameron-2-out-of-10-for-lettings-sector-performance

Making Landlord Admin Quicker for You and Your Tenants

Published On: April 11, 2016 at 9:37 am

Author: Em Morley

Categories: Landlord News

Tags: landlord admin,landlord responsibilities,tenancy agreements,tenants

With so many changes affecting the buy-to-let sector and a heap of regulations to adhere to, wouldn’t making landlord admin that bit quicker be more effective for your lettings business?

While there are certain circumstances where you must provide a paper copy (for example, with section 21 notices), there are instances when mounds of paperwork can be avoided.

If you’re looking to take on new tenants and will soon be issuing a tenancy agreement, wouldn’t it be easier to have documents returned within minutes without having to organise a face-to-face meeting with tenants and print off copies of contracts?

Making Landlord Admin Quicker for You and Your Tenants

Now, there is an online application that could help you make the lettings process more time and cost effective.

Signable is an electronic signature application, which already helps many UK landlords save time, money and become more secure. Signable allows documents to be signed on any device, meaning that tenancy agreements can be signed securely on the move at any time of day. This way, tenants can get everything back to you quickly and efficiently – Signable reports that documents are returned under 30 minutes on average.

Electronic signatures, or e-signatures, allow someone to agree the contents of an electronic message, such as an emailed copy of a tenancy agreement. With Signable, all documents are securely stored.

And don’t fear – Signable complies with the latest electronic signature laws in the UK and EU. Under the Electronic Communications Act 2000, documents signed electronically are just as legally binding than paper-based signatures.

Signable can be used for a variety of documents, including tenancy agreements and inventories. They can be created, signed and filed electronically, all from the Signable app, making the whole process easy for you and your tenants.

The firm’s Rob Bluck explains: “Along with saving time and money, landlords who use Signable are able to make the complete document-signing process easier for tenants.”

Landlords are currently using the service for the following: AST documents, application forms, guarantor forms, holding fee forms, direct debit/payment forms, deposit forms and feedback forms.

If you are an HMO landlord, it is also good to know that you can have various tenants sign the same document using Signable.

If you’d like to find out about more ways to save time and money, visit https://www.signable.co.uk