Search Results For: buy to rent sector

Buy-to-let landlords call for change in Autumn Statement

Published On: November 21, 2016 at 10:05 am

Author:

Categories: Landlord News

Tags: ,,,,

A new investigation has revealed that the overwhelming majority of buy-to-let landlords in the UK want to see more support from the Chancellor in Wednesday’s Autumn Statement.

Research conducted by Martin & Co found that 92% of investors feel the Government is now anti-landlord and is calling for changes.

Tax alterations

Certainly, the recent alterations have made life much more difficult for investors. In some cases, the 3% stamp duty surcharge, changes to mortgage interest tax relief and scrapping of wear and tear allowance have driven some landlords from the sector.

Last week’s announcement that the Bank of England is to get new powers to regulate lending to buy-to-let investors is another blow.

Further data from the research shows that 74% of investors want to see Stamp Duty scrapped in the Autumn Statement, while more than 50% want proposed changes to mortgage interest tax relief abolished.

Difficulties

Ian Wilson, chief executive of Martin & Co, observed: ‘The Government seems to be set on making life as difficult as possible for property investors, while ignoring the fact that landlords provide essential rental properties in locations where there are housing shortages and no realistic ability to buy.’[1]

‘People are relying on the private rented sector to supply property, so we need the Chancellor to back our landlords and encourage them to continue to invest and provide a vital pipeline of homes for people who simply cannot afford to buy,’ he continued.[1]

Buy-to-let landlords call for change in Autumn Statement

Buy-to-let landlords call for change in Autumn Statement

Pivotal

Eddie Goldsmith, chairman of The Conveyancing Association, believes that the Autumn Statement is a pivotal moment for the housing market in the UK. He feels that former Chancellor George Osborne’s policies has created a, ‘perfect storm.’ If this continues, Goldsmith feels that this could, ‘reduce transaction levels to rubble for many months to come.’[1]

‘It may be too much to hope that the 3% extra charge on additional property stamp duty will be abolished, but such a move-as well as a u-turn on next year’s mortgage interest tax relief changes-would be most welcome,’ he added.[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2016/11/investors-are-fed-up-with-governments-anti-landlord-policies-want-chang

Around 25% of investors will quit sector following tax changes

Published On: November 15, 2016 at 9:41 am

Author:

Categories: Landlord News

Tags: ,,,

A new survey of 1,000 buy-to-let landlords has revealed that around one quarter are thinking of quitting the sector as a result of recent and forthcoming tax changes.

The research conducted by the Residential Landlords Association highlights stamp duty surcharges and restrictions on mortgage interest tax relief as the main features.

Rising rents

This follows a previous study that showed that 56% of landlords plan to raise their rents, in order to cope with the tax alterations.

David Smith, policy director at the Residential Landlords Association, said: ‘The RLA’s findings are a worrying sign of the potential trouble ahead for tenants as a result of the previous Chancellor’s tax rises. Any reduction in supply is going to make it more difficult for them to find a place to live and will inevitably drive rents up.’[1]

‘Ahead of the Autumn Statement (next week), we are calling on the new Chancellor to consider the evidence, reverse policy and support growth in the rented sector,’ Mr Smith added.[1]

Around 25% of investors will quit sector following tax changes

Around 25% of investors will quit sector following tax changes

Tax burden

The call from Mr Smih and the Residential Landlords Association comes on the heels of another call from Laura Lamb, director of The Mortgage Company.

Lamb feels that the stamp duty surcharge should be aimed at portfolio landlords, as opposed to amateur ones.

‘Responsible lending is very important and I fully support that but stress-testing mortgages rates at 5.5% interest rates with a rent cover of 145% is just ridiculous and will massively limit lending,’ Lamb observed.[2]

‘I would focus more attention on offering more assistance to those trying to buy. The Government has introduced the Help to Buy ISA but it’s only available if you are purchasing a property under £250,000. Most first-time buyers in London and the south are looking at purchase prices in excess of this so they instantly lose out,’ she concluded.[2]

 

[1] https://www.lettingagenttoday.co.uk/breaking-news/2016/11/a-quarter-of-buy-to-let-investors-will-quit-warns-grade-body

[2] https://www.lettingagenttoday.co.uk/breaking-news/2016/11/hands-off-buy-to-let-mortgage-chief-tells-the-government

 

Private rental sector thriving…for now

Published On: November 11, 2016 at 9:44 am

Author:

Categories: Landlord News

Tags: ,,,,

The ongoing political and economic uncertainty is doing little to halt the private rental market, according to a new report.

Research from letting agency Belvoir however suggests that this situation could change, unless the Government changes plans to alter mortgage interest tax relief. In addition, the agency wants to see new measures that will help boost supply of rental homes on the market.

Policy reversal

Dorian Gonsalves, chief operating officer at Belvoir, stated: ‘If there is no reversal in Government policy with regards to mortgage relief taxation and no measures are introduced to increase the supply of rental properties then landlords are likely to come under increasing pressure to raise rents.’[1]

‘If they subsequently start selling off properties, this will clearly have a negative effect on the availability of good quality accommodation. We await the chancellor’s Autumn Statement on 23rd November with great interest,’ Gonsalves continued.[1]

Data from the Belvoir report reveals that rents rose slightly in the third quarter of 2016. 88% of Belvoir offices reported a rise in demand for house, while 63.5% saw an increase in demand for flats.

In terms of rental price movement, Belvoir agents do not foresee a big change in the lead up to the festive season.

Private rental sector thriving...for now

Private rental sector thriving…for now

Vacant

Continuing, Gonsalves said: ‘Historically Q2 and Q3 tend to show an increase and Q4 tends to be when there might be a decrease, as landlords don’t want properties to be left vacant at this time of year and so it is an opportunity for tenants to pick up a bargain.’[1]

‘Two to three bedroom houses remain top of the list for stock shortages, with 81% of offices reporting a shortage of three-bed semi-terraced houses, 68% reporting a shortage of three-bed detached homes and 66.5% of offices reporting a shortage of two-bed houses.’[1]

Concluding, Gonsalves observed: ‘’Our analysis of rental periods in Q3 versus Q2 showed that almost half of franchise owners (46.3%) reported that the average time for tenants to rent was 13-18 months and over a quarter (27.78%) reported the average time in a rental property was over two years.’[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2016/11/buy-to-let-market-continues-to-thrive

 

New rental listings rise by 11% in October

Published On: November 9, 2016 at 11:11 am

Author:

Categories: Property News

New research from crowdfunding platform Property Partner indicates that the rental market experienced a rebound during October, with a rise in listings.

According to the platform, there was a 11.4% rise in new buy-to-let properties being advertised.

Listings growth

After a slow September, almost two thirds (66.3%) of the UK’s major towns and cities saw growth of new rental property listings.

The study assessed 89 UK towns and cities and analysed the number of new rental properties listed between the 1st and 28th October, then compared them to the same period in September.

Swansea led the way with a magnificent rise of 210.9% in new buy-to-let properties listed during the last month. In actual terms, there were 314 new homes listed, in comparison to 101 in September.

Newcastle-upon-Tyne (194%), Sheffield (134.6%) and Leicester (125,4%) also saw significant rises in rental property listings.

On the other hand, new rental stock in London slipped by 3%, following a rise of 1.4% in September.

The overall figures come as a boost to the sector, after a separate report suggested new buy-to-let activity was down 13.3% in the year to October.

New rental listings rise by 11% in October

New rental listings rise by 11% in October

Reassurance

Dan Gandesha, CEO of Property Partner, observed: ‘After last month’s lower than expected figures, October’s surge in new buy-to-let listings is reassuring. Instead of September, heralding in a new era for depressed rental levels-as some predicted-it’s instead starting to look like the market was caught by a prolonged summer lull.’[1]

‘A quarter of homes bought over the summer months were either BTL or second homes, according to the HMRC, and this new rental stock is now finally hitting the market. But landlords have had to grin and bear a barrage of bad news – a hike in stamp duty, cuts in mortgage interest tax relief from next year, and tougher lending criteria. Profits have shrivelled especially in the South East, and a recent forecast by a leading high street agent of rents across the UK rising faster than house prices over the next five years, is hardly surprising,’ he continued.[1]

Negative affect

Mr Gandesha went on to say that: ‘Many traditional landlords though will be feeling the pinch and perhaps doubting if it’s worth the hassle, particularly in the South East. If significant numbers of investors start selling up then rental supply could be negatively affected.’[1]

‘By the New Year, we should have a better indication of how buy-to-let investor confidence is faring after the uncertainty of this year, but in the short term, October’s buoyant figures are encouraging,’ he concluded.[4]

[1] http://www.propertyreporter.co.uk/landlords/btl-listings-up-11-in-october.html

 

Only 2 weeks left to register for Rent Smart Wales

Published On: November 8, 2016 at 2:32 pm

Author:

Categories: Landlord News

Tags: ,,,,

Landlords in Wales have just two weeks to sign up for Rent Smart Wales, before the scheme becomes a mandatory requirement.

A new registration and licensing system, Rent Smart Wales represents a large change for the private rental sector. The scheme is intended to push up the quality of rental accommodation in the country and went live last year.

Rent Smart Wales requirements

The scheme obliges all landlords and letting agents to register their investment properties and to undergo training to gain a licence, should an investor wish to self-manage their property.

Now, only 2 weeks remain until the 23rd November deadline, after which it becomes an offence to either let or manage a property without the sufficient licence.

Designed to improve standards in the private rental sector in the principality, Rent Smart Wales offers training courses and information for landlords. In addition, it gives local councils a greater understanding of where properties are located.

Only 2 weeks left to register for Rent Smart Wales

Only 2 weeks left to register for Rent Smart Wales

Registration

David Cox, Managing Director, Association of Residential Letting Agents, observed: ‘The law means landlords in Wales-and those in the rest of the UK who own properties in Wales-need to register themselves and their properties with Rent Smart Wales, as well as being suitably trained and licensed to carry out letting or property management activities.’[1]

‘If landlords do not wish to get trained, they need to arrange for a trained and licensed agent to manage their properties on their behalf,’ he continued.[1]

However, concern is growing that a number of buy-to-let landlords and letting agents in Wales have not signed up for Rent Smart Wales.

Cox notes: ‘Given the 23rd November deadline for registration and licensing is only two weeks away, it’s concerning that it appears only about one quarter of agents are currently licensed.’[1]

‘If landlords and agents find themselves unlicensed when the deadline arrives on 23rd November, they will be unable to practice, so it’s important to act to soon to ensure the necessary qualifications and other regulatory requirements have been undertaken before then, in order to comply with the legislation,’ he concluded.[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2016/11/deadline-looms-for-landlords-to-register-in-wales

 

Rents are set to rise sharply by 2021

Published On: November 7, 2016 at 11:33 am

Author:

Categories: Property News

Tags: ,,,,

A new report has indicated that rents in Britain are likely to rise sharply in the next five years, with more people choosing to rent over purchasing property.

The investigation by estate agency Savills forecasts than rents will increase by 19% between now and the year 2021. During the same period, purchase prices are tipped to only rise by 13%.

Capital pressure

Average rents are tipped to rise by 24.5% in London by the end of 2021, with the cost of buying going through the roof.

More pressure on rental prices is being caused by many would-be buyers who simply cannot afford to buy. Recent tax alterations are serving to deter many buy-to-let landlords from making further investments in the sector

With rents set to rise, Savills believe that home price growth is going to be largely flat over the next two years. This, the agency suggests, is due to Brexit negotiations leaving home buyer sentiment ‘fragile.’

Rents are set to rise sharply by 2021

Rents are set to rise sharply by 2021

Forecasts

Savills estimates UK house price will stay steady in 2017, then increase by 2% in 2018. Growth of 5.5% is expected in 2019 and 3% in 2020, with a fall to 2% in 2021.

Lucian Cook, UK head of residential research at Savills’ said: ‘Brexit has forced the market to change gear and created uncertainty. The period of negotiation with the EU is likely to be a rollercoaster of confidence.’[1]

‘Buyer sentiment across all sectors of the market is likely to be fragile during the period of negotiations to leave the EU,’ he added.[1]

The table below indicates how Savills projects rents to rise per year until 2021:

Rents  
Year Rents
2017 +2.5%
2018 +4%
2019 +5%
2020 +3.5%
2021 +3%
Five year total +19%

 

[1] https://www.landlordtoday.co.uk/breaking-news/2016/11/rents-set-to-rise-significantly