Posts with tag: buy-to-let landlords

Tax changes in buy-to-let sector will remove ‘dinner party’ landlords

Published On: September 15, 2016 at 9:07 am

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

Alterations to tax measures, including the increased stamp duty and changes to mortgage interest tax relief, will lead to more professional landlords in the sector, according to a leading industry peer.

Adrian Moloney, of One Savings Bank, expressed his views at the Financial Services Expo (FSE) London exhibition. Moloney was one of an industry panel debating a wide range of issues.

Changing nature

When asked for his opinion of the changing nature of buy-to-let and the impact on landlords, Moloney said, ‘we are seeing a move towards a more professional sector and we’re going to see less of the dinner party landlord. This is very much an era of professionalism and I don’t think that’s necessarily a bad thing for the private rental sector.’[1]

However, Moloney was not as keen to welcome alterations to mortgage interest tax relief- to be introduced from April next year. Moloney said, ‘my hope is that the Chancellor will change the tax rules for buy-to-let landlords in the Autumn Statement but that’s probably not going to happen.’[1]

Mr Gary Salter, of Nationwide Building Society, believes, ‘we will see a change. This is the direction of travel we are going in-we moved to a 145% rental calculation earlier this year. Lenders will need to be much more prudent.’[1]

Tax changes in buy-to-let sector will rid ‘dinner party’ landlords

Actions

The panel was also asked what action they would like to see Chancellor Philip Hammond take in his first Autumn Statement.

John Coffield, of Paradigm Mortgage Services, has proposed changes to stamp duty land tax, in London and the South East primarily. He argues that estate agents are not welcoming enough properties to market, as people are deterred by the costs of moving.

Mr Moloney agreed that stamp duty in these regions could be changed, stating, ‘I would like to see some help for home movers,’ adding, ‘perhaps we could relax stamp duty in that area.’[1]

[1] http://www.propertyreporter.co.uk/landlords/will-changes-in-the-prs-signal-the-end-of-dinner-party-landlords.html

Cleaning costs most common cause of student deposit deductions

Published On: September 14, 2016 at 1:46 pm

Author: Em Morley

Categories: Landlord News

Tags: buy-to-let landlords,deposits,student deposits,student landlords,students

Fresh research from independent comparison website money.co.uk has revealed the most common reasons why students’ deposits are withheld by landlords.

Results from the survey show that cleaning costs and damage to fixtures and fittings are the most common reasons why landlords hold some or all of a student’s deposit.

Holding

With young adults across the British Isles heading to University this month, many will have to face up to not getting their full deposit back at the conclusion of their agreement. In fact, data from the report shows that 38% of students will not receive their deposit in full.

Of those students, landlords typically keep 29% of their deposit, amounting to an average deduction of £164 each.

Cleaning amounted to over half of landlords’ reasons for not returning a deposit (52%), with students failing to return a property in an acceptable state of cleanliness for a full deposit return.

24% of landlords cited damage to fixtures and fittings as a reason for not returning deposits. Excessive wear and tear (22%) was also a popular reason. However, only 5% cited unpaid bills.

Cleaning costs most common cause of student deposit deductions

Unfair

Unsurprisingly, two out of three students felt that their tenancy deposit was retained unfairly. Alarmingly, roughly one-quarter of students did not receive prescribed information on the tenancy deposit scheme their deposit was registered with. One in ten claimed that their landlord did not even protect the deposit!

Despite, two-thirds of students claiming that their deposit was held unfairly, only 15% disputed the decision and got money back.

Hannah Maundrell, editor in chief at money.co.uk, observed that this is the first time that many students will have lived alone and rented out a property.

She noted, ‘landlords are not the enemy-students must make sure they keep the property in a decent state so there’s no reason for their landlord to keep their cash-this is money they’ll be relying on getting back.’[1]

‘With over half a million students in private rented accommodation the scope for problems is huge,’ she added.[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2016/9/cleaning-costs-biggest-cause-of-deductions-to-student-rental-deposits

Private Rental Sector growth continues, says TDS

Published On: September 14, 2016 at 9:53 am

Author: Em Morley

Categories: Property News

Tags: buy-to-let landlords,deposits,rents,tenancy deposit scheme

New figures released from the Tenancy Deposit Scheme indicate that there has been a substantial rise in the number of deposits taken on assured shorthold tenancies in England and Wales.

This underlines the increasing popularity of buy-to-let as an investment opportunity, the firm claims.

Increasing investment

Data from the TDS report shows that at the end of March 2016, there were around 3.42 million deposits protected in England and Wales. This is a rise of over 360,000 over the course of the year.

The total value of deposits protected now stands at £3.56bn, which is an increase of £379 since last year.

Steve Harriott, chief executive of the Tenancy Deposit Scheme, noted: ‘these figures demonstrate the continuing growth of the private rented sector, which is now larger than the social housing sector in England and Wales.’[1]

However, the average value of deposits protected stayed fairly consistent. On the 31^st March 2016, the average deposit was £1,041. Four years, this figure stood at £979.

Mr Harriot went on to say, ‘the huge number of deposits being paid by tenants at a value of some £3.5bn demonstrates the need for tenancy deposit schemes to ensure that deposits are protected for tenants.’[1]

Private Rental Sector growth continues, says TDS

Cooling

These figures from the Tenancy Deposit Scheme come just days after a report from Countrywide which suggests rents on new tenancies cooled in August.

The most prominent rental declines were noticeable in central London, the South East, South West, Midlands and Wales.

[1] https://www.landlordtoday.co.uk/breaking-news/2016/9/private-rental-sector-continues-to-grow-says-tds

Two-thirds of landlords live within ten miles of investment

Published On: September 12, 2016 at 11:32 am

Author: Em Morley

Categories: Landlord News

Tags: Buy-to-Let,buy-to-let landlords,investment property,landlords

An interesting new survey has revealed that 65% of landlords live within ten miles of their buy-to-let investment property. In addition, these landlords manage day-to-day maintenance of the property themselves.

Research into more than 10,000 addresses from Simple Landlords Insurance also shows that around one-fifth of landlords reside within one mile of their buy-to-let property. 46% live between one and ten miles away.

Another 13% live between ten and twenty-five miles from their property. Just 15% of landlords live more than 50 miles away from their investment.

Close comforts

Findings from the report suggest that people prefer to invest in properties in areas that they know well. This is despite advice from some property professionals that they could get higher rents further afield.

Further data from the report indicates that 65% of landlords made the decision to invest in a property, with 17% describing themselves as so-called accidental landlords. 9% said that they had purchased property specifically for family members to live in.

45% said that they own a single rental property, with 40% owning between two and four. 15% said they have a portfolio of 5 or more properties.

Two-thirds of landlords live within ten miles of investment

Manual maintenance

65% of landlords actively manage the property themselves, while 24% use a letting agent to find tenants and then take over. 41% of landlords said that they do everything themselves, while 35% use an agent to do everything.

Alex Huntley, from Simple Landlords Insurance, noted, ‘we are seeing an increasing trend of savvy landlords taking direct control of how their property is let and managed and becoming much more self-sufficient. While it can be easy to bash landlords as faceless investors, these results show they are more likely to be part of the community they invest in and take a personal interest in making sure their property is well maintained and tenancies are long-term.’[1]

‘We are also seeing a growing demand from landlords to be able to manage their insurance policies online 24/7 and to buy flexible and scalable policies as their investments change,’ Huntley added.[1]

[1] http://www.propertyreporter.co.uk/landlords/majority-of-landlords-live-within-10-miles-of-their-investment.html

Buy-to-let mortgage costs fall by 8%

Published On: September 12, 2016 at 8:57 am

Author: Em Morley

Categories: Finance News

Tags: buy-to-let landlords,interest rates,mortgage rates,remortgaging

A number of buy-to-let landlords are continuing to benefit from the ongoing reductions of mortgage costs.

Lenders across the industry are still cutting percentage points off their most generous deals in an attempt to attract more business from buy-to-let landlords looking to remortgage property.

Falls

New market analysis from Mortgage Brain shows that the costs of buy-to-let mortgages have fallen by up to 8% in the last six months.

Data from the report shows that the cost of a typical five-year fixed buy-to-let loan with a LTV of 70% is 8% less than in March 2016.

The current average rate of 2.8% indicates that there is a potential for yearly savings of £738 on a mortgage worth £150,000.

Economists have predicted that the Bank of England is likely to announce a further cut to the base rate in November. Some have forecasted that the rate could be cut to as little as 0.1%, meaning that mortgage costs could fall even further at the end of 2016.

Buy-to-let mortgage costs fall by 8%

Interesting future

Mark Lofthouse, CEO of Mortgage Brain, noted, ‘with further interest rate cuts predicted by the Bank of England it will be interesting to see what happens to mortgage rates and costs over the next few months.’[1]

‘There’s no doubt though that on the whole borrowers and potential buy-to-let investors are in a great position to take advantage of the low rates and cost reductions that we’re seeing,’ he added.[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2016/9/buy-to-let-mortgage-costs-down-by-as-much-as-8

One in five landlords is embarrassed

Published On: September 9, 2016 at 2:53 pm

Author: Em Morley

Categories: Landlord News

Tags: Buy-to-Let,buy-to-let landlords,landlords,national landlords association

An interesting new piece of research has revealed that as many as one in five buy-to-let landlords are too embarrassed to admit they are one!

The National Landlord Association’s Quarterly Landlord Panel quizzed 777 investors. Of these, 21% of landlords said they were too embarrassed to admit their role before.

Regional reluctance

In different regions of Britain, landlords in the East of England and the East Midlands were found to be most reluctant to disclose their role, with 29% and 28% of landlords in these regions respectively.

On the other hand, the English locations with the least embarrassed investors were the South East and Yorkshire and the Humber, with 18%. Only 13% of landlords in Scotland said they were reluctant to tell people, which was the lowest in the UK.

Mr Richard Blanco, a landlord in London and the East Midlands, admitted he hasn’t always been truthful about his role. He said, ‘before becoming a landlord I thought long and hard about it because I had always disliked landlords as a student due to a bad experience I had over my deposit. These days I’m more upfront about it, but I tell people I work in property instead, because I still assume people won’t like me if I tell them what I do.’[1]

‘I always say that I work for the National Landlords Association and that we campaign to improve the private rental sector, which tends to go down a bit better,’ he added.[1]

One in five landlords is embarrassed

Satisfaction

Findings from the report indicate that 400,000 UK landlords avoid telling people what they do. However, the National Landlords Association believes that despite the bad press, the majority of tenants are satisfied with their current landlord and tenancy agreement.

Richard Lambert, Chief Executive of the National Landlords Association, noted: ‘The number of people looking to invest in property is rising all the time yet the stigma attached to being a landlord never seems to diminish. It’s the minority of rogues and criminal landlords that make the headlines and this has a negative impact on everyone else. The majority of landlords are hardworking individuals who put their own money into providing homes for others and they should not be ashamed to say so.’[1]

[1] http://www.propertyreporter.co.uk/landlords/are-you-embarrassed-to-be-a-landlord.html