Posts with tag: buy-to-let landlords

New tool lets landlords compare rents online

Published On: October 5, 2016 at 2:27 pm

Tags: buy-to-let landlords,landlords,Rent Check,rents

A new tool allowing buy-to-let landlords to snoop on rents being charged by their peers online has been launched by Landbay.

The lenders’ Rent Check service permits landlords to make sure that they are receiving sufficient rent from their tenants, by comparing their own rental income with competitors.

Trends

Using UK wide figures, the postcode widgets take the data from Landbay’s monthly Rental Index. This Index maps both monthly and annual trends in rents, by geographic location and by number of bedrooms.

In addition, this new tool allows users to access data which shows how rental movements for a specific property type have altered over time. These figures give unique insights into both movement in the market and social mobility.

New tool lets landlords compare rents online

John Goodall, CEO and co-founder of Landbay, noted: ‘The UK is in the midst of a housing crisis and a severe supply/demand imbalance, meaning the rental property market is buoyant. Together, Landbay’s Rental Index and the Rent Check tool will give both tenants and landlords a simple way of accessing data from across the UK, not only providing an in depth view of the market, but helping inform their next move.’[1]

‘In times of low interest rates and a lack of home ownership and affordability, we’re pleased to be able to offer people a way of affirming the rent they are paying in their region,’ he added.[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2016/10/new-tool-enables-landlords-to-compare-rents-online

Industry Professionals Support RICS’s Call for More Rental Homes

Published On: October 5, 2016 at 8:32 am

Author: Em Morley

Categories: Property News

Tags: buy-to-let landlords,housing crisis,property market,rental homes,rental properties,Stamp Duty

Following yesterday’s call from the Royal Institution of Chartered Surveyors (RICS) for the Government to address the shortage of rental homes, industry professionals have spoken out in support.

The RICS insisted that the Government should reconsider its 3% Stamp Duty surcharge for buy-to-let landlords, as the additional tax is hindering investment in the private rental sector.

Industry Professionals Support RICS’s Call for More Rental Homes

Finance specialist Paul Mahoney, of Nova Financial, agrees: “RICS has taken the words out of my mouth in recommending that the Government reverse the recent Stamp Duty changes for second properties and in fact incentivise build-to-rent supply in a vastly under supplied market. I will go one step further and call on the Government to incentivise buy-to-let investors to buy new build and off-plan properties and further boost supply.

“The Australian government has implemented depreciation tax benefits on new build properties, which has successfully boosted investment and supply driven by both local and overseas investors. Furthermore, the Australian government has restricted overseas investment in property to only new builds; why has this not been considered in the UK? We need to stop vilifying landlords and recognise them as a key part of the funding required for new housing supply.”

Additionally, London chartered accountant Blick Rothenberg LLP has detailed the changes it believes the Government should introduce in order to increase the supply of rental homes.

It believes that a temporary capital taxation relief should be implemented in order to incentivise landowners and developers to increase the supply of affordable housing.

A partner at Blick Rothenberg, Frank Nash, explains: “RICS is pushing to loosen tax rules on the buy-to-let market, and go even further by suggesting pension funds could be engaged to provide large scale housing schemes. This added pressure puts the Government in a difficult position, given their pledge to ensure younger generations become owner-occupiers rather than renters.

“We could use the tax system to boost the supply of affordable housing by temporarily reducing Capital Gains Tax, Corporation Tax and Stamp Duty Land Tax on development land, where affordable housing quota is met. Housebuilders and landowners are motivated to achieve competitive returns, and tax savings would incentivise them to work with local authorities and meet their affordable housing targets without degrading the competitive returns provided through private house sales.”

Just days after the Chancellor and Communities Secretary pledged to put housing ahead of the deficit, Nash added: “There are too many prospective homeowners chasing too few properties and competing with the private rental sector.

“Temporary tax exemptions on the disposal of land for housing should inject a new supply dimension into the housing market, but these reliefs should be conditional upon achieving a minimum percentage of affordable homes within a given timeframe, in line with each local authority’s own affordable housing targets.”

The Property Ombudsman reveals annual information

Published On: October 4, 2016 at 9:55 am

Author: Em Morley

Categories: Property News

Tags: buy-to-let landlords,deposit disputes,lettings,rental market,The Property Ombudsman

The Property Ombudsman scheme has today released its most recent annual figures, which show a rise in the number of consumers contacting the scheme for assistance.

In her first yearly report following her appointment early in 2015, Katrine Sporle revealed some interesting data concerning the scheme.

Advice

In 2015, The Property Ombudsman received 16,265 enquiries from consumers looking for advice. In addition, it resolved 3,304 formal complaints, a substantial increase of 32% from the previous year. What’s more, the Ombudsman instructed agents to pay awards worth £811,134.

With regards to lettings, some key figures were revealed to be:

1,965 formal complaints were resolved, 33% more than in 2014
83% of complaints were supported
50% of complaints were made by landlords
47% of complaints were made by tenants
The greatest award for a lettings dispute was £16,954
The average lettings award was £522
The highest volume of complaints were in the South East (24%), Greater London (24%) and the South West (9%).

The top three causes of lettings complaints were found to be:

Management (including repairs, maintenance)
Communication & record keeping
End of tenancy issues (deposits, damages etc)

The Property Ombudsman reveals annual information

Raises

Katrine Sporle noted: ‘The number of agents joining The Property Ombudsman has grown by 82% in the last 5 years. 35,374 offices are now signed up and following our approved Codes of Practice. Importantly, these figures show that more and more consumers are able to access The Property Ombudsman to have their disputes resolved.’[1]

‘Being the largest government-approved property redress scheme does mean that we receive a commensurately large number of enquiries every year. In the vast majority of cases, those enquiries are dealt with satisfactorily through TPO intervention to facilitate early resolution between agents and consumers.’[1]

Concluding, Sporle said: ‘Last year, out of 16,265 enquiries, 3,304 complex complaints required formal review and, a high percentage of those complaints were supported (83%). Overall, this is good news for consumers and redress, but not so great for the reputation of agents who collectively paid out over £800,000 in awards.’
‘My message for those agents is simple; pay more attention to TPO’s Codes of Practice and raise your standards.’[1]

[1] http://www.propertyreporter.co.uk/landlords/the-property-ombudsman-reveals-32-increase-in-complaints-resolved.html

New Underwriting Standards to Maintain Discipline in Buy-to-Let Mortgage Market

Published On: October 4, 2016 at 9:09 am

Author: Em Morley

Categories: Finance News

Tags: buy to let mortgages,buy-to-let landlords,Mortgage lending,mortgages

The Prudential Regulation Authority’s (PRA’s) new underwriting standards will maintain discipline in the buy-to-let mortgage market, according to Paragon Mortgages, one of the UK’s leading specialist buy-to-let lenders.

New Underwriting Standards to Maintain Discipline in Buy-to-Let Mortgage Market

Paragon has welcomed the PRA’s Supervisory Statement, which will introduce more comprehensive and uniform affordability testing for buy-to-let mortgages.

The standards will introduce new rules to ensure that lenders undertake a thorough assessment of mortgage affordability based on a more standardised review of rental income and property costs, alongside a full understanding of each buy-to-let landlord’s wider economic circumstances.

This will include a requirement for lenders to consider how buy-to-let applicants are affected by the tax changes announced last year, including the Stamp Duty surcharge and reduction in mortgage interest tax relief.

Importantly, the new standards also require lenders to tailor their underwriting approach to distinguish between landlords with small property portfolios of no more than three buy-to-let properties, and those with more extensive and complex investments.

The Managing Director of Paragon Mortgages, John Heron, comments: “As an experienced specialist in the buy-to-let sector, Paragon is already well-aligned with the PRA’s requirements.

“A thorough affordability assessment, together with a full understanding of the characteristics of each property and landlord that we lend to has always been central to our approach and instrumental in maintaining our strong credit metrics.”

He explains: “By requiring a more consistent approach across the market, the PRA should be able to ensure that the strong credit performance of buy-to-let lending is maintained and that lending remains sustainable.

“We would, however, expect these measures to restrict the level of growth in the buy-to-let market going forward, by cutting out more marginal business. We also expect a larger proportion of the market to be specialist in nature, consisting of more professional portfolio landlord business. We believe that Paragon is particularly well placed to capitalise on the opportunities this presents, given its unparalleled experience in this sector.”

Do you believe that the PRA’s new underwriting standards will benefit buy-to-let landlords looking to invest?

Buy-to-let landlords to increase rents to offset charges

Published On: October 3, 2016 at 9:19 am

Author: Em Morley

Categories: Landlord News

Tags: buy-to-let landlords,landlords,private rental sector,rents,tax changes

New research has revealed that many tenants are likely to be hit with rental price hikes, following recent alterations to tax regimes.

A survey of nearly 3,000 private landlords from the Residential Landlords Association showed that 56% of buy-to-let investors plan to increase taxes in the short-term. This follows the changes to stamp duty and caps on tax relief, scheduled for next year.

Portfolios

In addition, the study found that nearly two-thirds of landlords do not plan on buying any more properties to add to their portfolio. Nearly one-third of landlords are thinking about leaving the market for good.

Following last year’s general election, then Chancellor George Osborne announced plans to cut the rate at which higher rate taxpayers can claim relief on their mortgage payments. These changes are to be phased on from next April and by 2021, all buy-to-let landlords will only receive relief of up to 20%.

54% of landlords said that they did not have full confidence in the future of the sector. 70% feel that the Government will outline new policies affecting landlords in the near future.

More pleasingly, 86% of landlords said they had a good relationship with their tenants. 82% of landlords questioned said that their tenants pay their rent on time.

Buy-to-let landlords to increase rents to offset charges

Review

The Residential Landlords Association is now calling on the Chancellor Philip Hammond to review changes made by Mr Osborne. The firm believes that he should get behind the country’s landlords and encourage more homes to be developed for rent, to meet growing demand.

David Smith, policy director at the Residential Landlord Association, said: ‘these results show how perverse recent tax changes have been. By implementing policy that will increase rents and choke off the supply of homes to rent, the Government is making it more difficult for tenants to save for a home of their own.’[1]

‘We are calling on the Chancellor to use the Autumn Statement to hit the reset button,’ he added.[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2016/10/buy-to-let-landlords-likely-to-increase-rents-to-offset-higher-costs

Fresh Taxes on Landlords May Leave Bitter Taste

Published On: October 3, 2016 at 8:43 am

Author: Em Morley

Categories: Landlord News

Tags: buy-to-let landlords,landlord taxes,mortgage interest tax relief,Stamp Duty

James Davis – Portfolio landlord & property expert

After being a landlord for 22 years and becoming increasingly frustrated with the lack of quality tenant-find services for landlords, James started Upad. Upad has mastered the intricacies of online to provide landlords a service they can rely on. In this article, James walks through the new tax changes for landlords and their potential impact.

Fresh taxes on landlords may leave a bitter taste

Keep abreast of new tax initiatives. It is one way that helps me to anticipate market shifts, making sure that I make the right decisions at the right time.

Fresh Taxes on Landlords May Leave Bitter Taste

I mention this because there has been two key changes recently. Firstly, from April this year, Stamp Duty Land Tax (SDLT) will include an additional charge for residential buy-to-let and second home buyers. Secondly, there has been a careless promise by the Government to introduce mortgage interest relief – something that could impact millions of landlords and tenants.

Stamping out won’t prevent buyers

As of this year, there has been a 3% loading on existing SDLT rates for anyone who is buying an additional property for £40,000 or more. That means anyone who is buying a holiday home, buy-to-let or somewhere extra to live, they will be charged more.

For example, any additional property bought for between £125k – £250k will now be charged SLDT at a rate of 5% instead of 2%.

While this cost mounts up, it shouldn’t deter landlords from buying their second or third property. Many will have already benefitted greatly from increased property prices. Also, landlords can deduct from the sale of their property under Capital Gains Tax.

Mortgage interest is no relief for anyone

In a perceived bid to side with the mass tenant population in the UK, the recently sacked Chancellor of the Exchequer, George Osborne, introduced a restriction on the amount of income tax relief on mortgage interest. That is effectively an additional tax on the cost of owning a buy-to-let property, which is not something we’re used to.

Previously, we have all been comfortable with our predetermined tax on the profit of a property. After taking away mortgage interest and other costs from our rental income, we are left with a taxable amount, usually between 20% and 45%.

Now we are being told that you will no longer be able to deduct mortgage interest in full from your taxable profits/allowable loss, leaving you with a higher taxable profit (or smaller allowable loss). You will then need to deduct 20% of your interest rate in addition.

In short, it means that higher and additional rate taxpayers will be subject to increased tax on their rental income or in the case of loss making portfolios a reduced amount of loss available to offset against future rental income. Moreover, for landlords with highly geared and/or loss making portfolios, the restriction on mortgage interest relief could result in the landlords having to source funds to pay the income tax due on the taxable rental income from other sources. There is still some discussion as to whether or not the tax will come into play. Landlord groups will stand in the way and hopefully the new Government will realise the potential consequences of this law.