Finance News

Property Crowdfunding Could Save Buy-to-Let Investors

Em Morley - May 7, 2015

Every political party seems to have it in for buy-to-let landlords, and investors are already suffering from expensive new regulations and tougher taxes brought in by the coalition Government.

Labour has proposed three-year tenancies and rent controls, and the Liberal Democrats are planning to crackdown on landlords with low energy-efficiency properties.

Britain’s landlords are concerned over any new measures when the result of the general election is announced.

Property Crowdfunding Could Save Buy-to-Let Investors

Property Crowdfunding Could Save Buy-to-Let Investors

But what changes have investors already been hit with?

To begin with is the corporate enveloped dwellings tax. If an investor’s portfolio is held through a company and has any property worth £1m or more – the threshold will halve next year – they will be charged an additional £7,000 in annual tax, unless qualifying for an exemption.

If the Conservatives stay in power, the right to rent checks included in the Immigration Act 2014 will roll out nationally and require landlords to check the immigration status of their tenants, or face a £3,000 fine. The scheme is already in place in some parts of the Midlands.

And the law could get tougher regarding problem tenants. It is hoped that there will be a clampdown on revenge evictions – when tenants are asked to leave for requesting improvements on the property.

It is important that tenants’ rights are considered, however, it is feared that some will take advantage of this measure.

Furthermore, there are more local authorities requiring landlords to licence their rental properties. This can cost from £500 to £1,000 for Houses in Multiple Occupation (HMOs).

Not only are landlords dealing with the usual concerns of being a buy-to-let investor: void periods, trouble tenants, and unexpected bills, but new regulations could hit even harder.

James Robinson, of Property Crowd, says: “However, there is another way for investors to get involved in property investment and existing buy-to-let landlords to expand their portfolio without increasing the hassle factor.

“The residential buy-to-let market is booming, and property crowdfunding offers a way in without the need to obtain mortgages, find suitable tenants for the properties, and all of the other usual headaches of being a landlord.”

Property Crowd’s latest project is a £1m offer on luxury new-build flats from a leading residential developer, St James, for a minimum investment of £5,000.

Robinson explains: “Property Crowd investors will receive 100% of the net rental income and will also benefit from 75% of the capital appreciation upon sale, expected to be in five to six years time.”1

1 http://www.telegraph.co.uk/sponsored/finance/property-crowdfunding/11583050/avoid-new-buy-to-let-headaches-property-crowdfunding.html?WT.mc_id=tmgspk_td_605878_11583050&utm_source=tmgspk&utm_medium=td&utm_content=605878&utm_campaign=tmgspk_td_605878_11583