Search Results For: buy to rent sector

Emerging Prime Hotspots in London Lead Growth

Published On: July 8, 2015 at 4:53 pm

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Property prices in the emerging prime hotspots of London recorded a slight increase of 1.3% in the second quarter (Q2) of 2015, down by 0.84% compared to Q2 2014, revealed new data.

Emerging Prime Hotspots in London Lead Growth

Emerging Prime Hotspots in London Lead Growth

Demand in South West London has continued to be fuelled by sales, particularly of flats under £937,500, following Stamp Duty changes at the end of 2014, according to the latest quarterly report by real estate company Douglas and Gordon.

Contrastingly, larger houses priced over £1.3m in emerging prime markets were less promising, due to Stamp Duty issues and concerns over the mortgage market. In some areas, such as Battersea and Battersea Park, prices were down 10% annually.

In the sector, Clapham and Southfields experienced the strongest price growth, of 3.5% and 3.9% respectively. A weak second-half of 2014 has led prices in these areas to catch up to where they were a year ago.

Rental growth is also strong, up 1.7% in Q2, continuing this market’s strong performance during a difficult year in the sales sector. However, this is expected to slow once sales pick up.

Total returns, capital and rental growth remain attractive to professional investors in emerging prime areas. Capital values are also forecast to increase by 10% in the next 12 months.

Douglas and Gordon’s Executive Director, Ed Mead, says: “Whereas there is some evidence of a post-election bounce, unsurprisingly, many are taking their time to make decisions and a continuation of the anticipated bounce needs to be tempered with a dose of realism.”1

His predictions for the next 12 months regarding family homes is that the market will remain firm, due to there no longer being a threat of mansion tax.

However, he also notes that there is a lack of supply and the firm’s emerging prime index is only back to levels seen a year ago.

He expects fringe areas to perform best, as buyers look for new areas to purchase a property in.

1 http://www.propertywire.com/news/europe/london-prime-emerging-markets-2015070710717.html

NLA Warns of Higher PRS Costs

Published On: July 8, 2015 at 12:50 pm

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The National Landlords Association (NLA) has warned that costs in the private rental sector (PRS) could increase by £2.6 billion if buy-to-let mortgage interest payments are made non tax-deductible.

NLA Warns of Higher PRS Costs

NLA Warns of Higher PRS Costs

In a letter to the Chancellor ahead of today’s Budget, NLA CEO Richard Lambert said that non tax-deductible mortgage interest payments would not be good for the UK economy and would put added pressure on the cost of housing.

The letter also detailed the influences of landlords on the UK economy through their support of the housing industry and direct contributions in the form of tax.

Lambert wrote: “It has been suggested that private landlords receive too many ‘perks’ or reliefs which give them an unfair advantage compared to owner-occupiers, but this ignores the fact that letting residential property for profit is a business.

“No business pays tax on their gross turnover alone so why should landlords be treated any differently? Removing their ability to deduct legitimate costs before declaring their taxable profit would essentially force them to suck up one of the most significant expenses they face in being able to provide homes for others.”

Using data from the Council of Mortgage Lenders (CML), the NLA predicts that costs in the PRS could grow by up to £2.6 billion if mortgage interest payments were reclassified as non tax-deductible. It believes that this would leave landlords with no other option than to increase rents.

Lambert concluded by pursuing “an unequivocal reassurance that the Government will continue to regard buy-to-let mortgage interest payments as a legitimate business cost and give landlords the confidence and certainty to invest for the future.”1

1 http://www.propertyreporter.co.uk/landlords/warning-issued-over-mortgage-interest-payments.html

NLA warns over changes to mortgage interest payments

Published On: July 8, 2015 at 12:43 pm

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Ahead of today’s first Conservative only budget in over twenty years, the National Landlords Association has issued a warning that costs could spiral in the private rented sector.

The NLA’s concern surrounds the issue of buy-to-let mortgage interest payments possibly being made non tax-deductible. The firm believes that this means costs could rise to as much as £2.6bn.

Detrimental

In a letter addressed to Chancellor Osborne, Chief Executive of the NLA Richard Lambert said that any move to make mortgage interest payments non tax-deductible would be detrimental to the UK economy. Lambert believes that the proposed changes would only put increased pressure on the value of housing.

‘It has been suggested that private landlords receive too many ‘perks’ or reliefs which give them an unfair advantage compared to owner-occupiers, but this ignores the fact that letting residential property for profit is a business,’ said Lambert. ‘No business pays tax on their gross turnover alone so why should landlords be treated any differently? Removing their ability to deduct legitimate costs before declaring their taxable profit would essentially force them to suck up one of the most significant expenses they face in being able to provide homes for others.’[1]

NLA warns over changes to mortgage interest payments

NLA warns over changes to mortgage interest payments

Rise in rents

Having used figures compiled by the Council of Mortgage Lenders from the back end of 2014, the NLA suggests that costs in the private rented sector could increase by up to £2.6bn, should mortgage interest payments be reclassified as non-deductible. The firm warns that should this become law, landlords would be left with no option but to raise rents.

Concluding his letter to the Chancellor, Mr Lambert said that his firm was seeking, ‘an unequivocal reassurance that the Government will continue to regard buy-to-let mortgage interest payments as a legitimate business cost, and give landlords the confidence and certainty to invest for the future.’[2]

[1] http://www.propertyreporter.co.uk/landlords/warning-issued-over-mortgage-interest-payments.html

 

 

 

RLA’s Plea to George Osborne

Published On: July 8, 2015 at 11:51 am

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The Residential Landlords Association (RLA) has spoken about what it would like to see in today’s Budget.

RLA's Plea to George Osborne

RLA’s Plea to George Osborne

Alan Ward, Chairman of the RLA, says: “The private rented sector is now the only housing tenure growing, with demand set to increase further.

“As the Financial Secretary to the Treasury has alluded to, encouraging growth in the sector is good for jobs and good for all those looking for a home.”

Last month, the Financial Secretary to the Treasury, David Gauke MP, responded to a parliamentary question by saying that private rental housing “supports the economy through improved labour market flexibility.”1

As most landlords are individuals renting out just a small number of properties, the RLA believes that the Government should recognise this as a business activity through the tax system.

The RLA is hoping for an end to tax rules that mean VAT can be reclaimed when a new home is built for owner occupation, but not for renting.

The RLA is also supporting the Government’s plans for growing homeownership, by calling for rollover relief on capital gains tax (CGT) when the sale of a rental property is to a first time buyer, with controls such as a maximum limit on price.

Ward adds: “The Chancellor has a golden opportunity to go for growth, which we urge him to seize.”1

1 http://www.mortgageintroducer.com/mortgages/253025/5/Industry_in_depth/Landlords’_plea_to_Osborne_ahead_of_budget.htm

Landlords seeing rise in demand from youngsters

Published On: July 7, 2015 at 11:45 am

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Over 40% of landlords have experienced an increase in tenant demand during the last twelve months, according to new research from Paragon Mortgages.

43% of landlords questioned said that they had noted a rise, with this growth being driven by young people and small families. In addition, 51% of landlords said that they expected growth to continue during the next year.[1]

Young renters

The survey revealed that 47% of landlords rent to young couples, 43% to young singletons and 42% to small families.[1]

‘It is no surprise that rental demand is steadily increasing,’ said John Heron, Managing Director of Paragon Mortgages. ‘With continued stress on the housing stock driving prices up, tough affordability hurdles for would be buyers and a social rented sector under pressure as a result of renewed interest in right to buy, a steady increase in rental demand was practically inevitable.’[1]

Landlords seeing rise in demand from youngsters

Landlords seeing rise in demand from youngsters

Heron belives that,’ it is important that landlords continue to expand the supply of rented property in order to maintain balance and so avoid unsustainable increases in rents. A healthy, competitive and innovative buy to let market is critical to this.’[1]

[1] http://www.propertywire.com/news/europe/uk-landlords-tenant-demand-2015070610714.html

 

 

Landlords Positive About Tenant Demand

Published On: July 2, 2015 at 1:00 pm

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Landlords Positive About Tenant Demand

Landlords Positive About Tenant Demand

Tenant demand in the second quarter (Q2) is continuing to grow, as 43% of landlords believe demand is either growing or booming, revealed research by specialist buy-to-let lender, Paragon Mortgages.

The study found that the trend for high tenant demand is strong, with continuous steady growth for the past three consecutive quarters.

This level of growth is expected to continue over the next 12 months, with over half of landlords (51%) predicting a further rise in demand.

The research also highlighted the tenant groups that landlords are most frequently renting to: Around half of landlords (47%) let to young couples, 43% to young singles and 42% to families with children.

Managing Director of Paragon Mortgages, John Heron, explains: “It is no surprise that rental demand is steadily increasing. With continued stress on the housing stock driving prices up, tough affordability hurdles for would-be buyers and a social rental sector under pressure as a result of renewed interest in Right to Buy, a steady increase in rental demand was inevitable.

“It is important that landlords continue to expand the supply of rented property in order to maintain a balance and so avoid unsustainable increases in rents. A healthy, competitive and innovative buy-to-let market is critical to this.”1

1 https://www.landlordtoday.co.uk/breaking-news/2015/6/landlords-upbeat-about-tenant-demand