Posts with tag: buy-to-let landlords

Put rogue tenant list in Housing and Planning Bill-AIIC

Published On: April 27, 2016 at 11:49 am

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The Association of Independent Inventory Clerks (AIIC) has called for amendments to the Housing and Planning Bill, to address the issue of problem tenants.

With the ‘Bill already including features to tackle rogue landlords and letting agents, the AIIC is now calling for measures aimed at rooting out rogue tenants to be included.

Alterations

Proposals already existing in the Bill include those to both ban and fine criminal landlords and letting agents. What’s more, there are also proposals to introduce rent repayments orders and create a database of blacklisted agents and landlords.

It has been mooted than this blacklist will be created and maintained by local authorities, with them also having to apply for offenders to be included on this register.

Currently at the report stage, the Bill will have to pass through a third reading and consideration of amendments before finally reaching Royal Assent and becoming law.

Put rogue tenant list in Housing and Planning Bill-AIIC

Put rogue tenant list in Housing and Planning Bill-AIIC

Work to be done

Despite welcoming the measures aimed at rooting out so called rogue landlords, the AIIC said there is much more to be done to underline the problem of rogue tenants.

Patricia Barber, chair of the AIIC, stated, ‘we’re well aware that there are criminal landlords and letting agents out there and blacklisting them and banning them from letting property is a necessary step. That said, the measures in the Housing Bill are very one-sided and suggest that it is only landlords and agents that cause problems during tenancies. We know from experience that this is not true and I personally have come across many horror stories in my time where tenants have trashed a landlord’s property or refused to pay rent for long periods of time.’[1]

‘It would only be fair if troublesome tenants who repeatedly offend could be blacklisted in the same way as landlords or agents. The threat of being blacklisted or a fine would hopefully discourage a minority of tenants from misbehaving and help to improve the relationship between landlords, agents and tenants.’[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2016/4/housing-bill-should-also-include-rogue-tenants-list-says-aiic

Homeowners Welcome Stamp Duty Surcharge for Landlords

Published On: April 22, 2016 at 9:44 am

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More than twice as many homeowners (47%) support the 3% Stamp Duty surcharge for buy-to-let landlords and second homebuyers than oppose it (18%), according to a recent survey.

The study, conducted by YouGov on behalf of HomeOwners Alliance and BLP Insurance, found that the change is seen to support first time buyers and owner-occupier properties.

Those in the South West, where there is a serious shortage of affordable homes, are most in favour of the higher tax rate, with six in ten (59%) supporting the change.

Homeowners Welcome Stamp Duty Surcharge for Landlords

Homeowners Welcome Stamp Duty Surcharge for Landlords

On 1st April, the Government introduced a 3% Stamp Duty surcharge for those purchasing buy-to-let properties and second homes. The change was initially met with opposition from many groups.

Supporters of the surcharge believe the measure will help create a level playing field between those buying homes to live in and those purchasing an investment property.

One respondent to the survey says: “The buy-to-let market is slowly destroying the overall housing market and making affordable properties less available for those wanting to own a home as their principal place of residence.”

Some have witnessed a shortage of homes available for first time buyers, and hope that the Stamp Duty change will make it harder for landlords to purchase similar properties.

Additionally, buy-to-let landlords have been blamed for pushing up house prices and pricing local residents out of the housing market.

Some also believe that those able to afford a second home or investment property should be able to afford to pay a higher rate of Stamp Duty.

Those who oppose the surcharge suggest that the measure could have unintended consequences, such as higher rent for private tenants. Landlords also feel that the Government is making another tax grab at the buy-to-let sector.

One respondent states: “I have been saving for some time (five years) to be able to afford to purchase an investment property. This change has now meant that it is not feasible for me to do so. It is unfair to penalise people who work hard and save.”

Stamp Duty reforms for all buyers, introduced in December 2014, were also well received, with one third saying the changes make buying their first home or moving up the property ladder more affordable.

Furthermore, concerns over Stamp Duty have subsided significantly. In March 2014, it was found that two-thirds of UK adults (64%) said Stamp Duty was a serious problem, while the latest survey shows that just half (52%) regard Stamp Duty as a serious issue.

The Chief Executive of HomeOwners Alliance, Paula Higgins, comments: “The British public believe that homes are for living in and not speculating with. The Stamp Duty surcharge might be bad for landlords, but it will allow more young people to realise their dream of owning the roof over their head. This is why we initially called for the tax system to differentiate between aspiring homeowners and property investors. However, we must see the money raised ploughed back into building more affordable housing.”

Gross mortgage lending hits biggest level for 9 years

Published On: April 21, 2016 at 11:41 am

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Latest figures released from The Council of Mortgage Lenders show March saw gross mortgage lending total £25.7bn.

This was driven by buy-to-let landlords rushing to complete deals before the additional 3% stamp duty surcharge came into play on April 1st.

Increases

The surge amounted to a 43% month-on-month increase in comparison to February. What’s more, mortgage lending was up 59% greater than in March 2015 and the highest figure seen in the month since 2007, where lending hit £30.9bn.

Gross mortgage lending in the first quarter of 2016 was approximately £62.1bn. This is 39% higher than in the first three months of last year.

Economist at the Council of Mortgage Lenders, Mohammed Jamel, said, ‘against a backdrop of a recovering market, the substantial jump in lending in March was significantly influenced by a late surge of activity to beat the Government’s stamp duty change on second properties, which came into effect at the start of April. The distortion caused by this stamp duty change appears to be larger than any previous stamp duty change we’ve seen.’[1]

‘As a result, we expect there will be about 10,000 fewer mortgage transactions each month in the second quarter of 2016 than would otherwise have been the case, offsetting the increase in activity seen in March,’ Jamel added.[1]

House price spike

Jeremy Duncombe, Director at Legal & General Mortgage Club, commented, ‘whilst these latest figures from the CML may seem to suggest that more people are securing mortgages, this rise in lending is actually the result of ever-increasing house prices.’ He feels, ‘the reality is that today’s buyers are being forced to borrow more to cover the cost of their home, which is artificially inflating lending figures.’[1]

Duncombe went on to say, ‘if we want to see lending grow correctly and help more people afford their dream home, the Government and the construction industry must work together to alleviate the housing crisis by building at least 250,000 homes a year.’[1]

Gross mortgage lending hits biggest level for 9 years

Gross mortgage lending hits biggest level for 9 years

Encouraging

‘Driven by the changes to Stamp Duty that kicked in from April, the mortgage market was firing on all cylinders in March as landlords, brokers and lenders shifted into top gear to complete on purchases,’ noted John Eastgate, Sales and Marketing Director of OneSavings Bank.

‘Whatever the cause, the effects of the Stamp Duty changes saw lenders, brokers and conveyancers burning the midnight oil to keep borrowers happy and this was reflected in mortgage activity,’ he continued.[1]

Henry Woodcock of IRESS, observed, ‘February’s gross mortgage lending figures were lower than January’s, so it’s very encouraging to see such a big pick-up in March. A month-on-month decline would have been concerning given the extremely favourable borrowing conditions.’[1]

‘We may we see a further uptick in April, however, looking to the next few months, there are a few factors I think will have a levelling-off effect on gross mortgage lending. The looming EU referendum may mean borrowers will wait and see the result before proceeding. The newly introduced stamp duty land tax surcharge, targeted at prospective private landlords and the Bank of England’s proposed new tighter lending rules to make it harder for landlords to get a mortgage, is bound to have a dampening effect on the buy-to-let market. Lastly, while remortgaging appears to be on the rise, I’d caution that increases may be limited for many interest only borrowers, as lenders now require credible repayment vehicles to be in place first,’ Woodcock concluded.[1]

[1] http://www.propertyreporter.co.uk/finance/market-booms-as-gross-mortgage-lending-hits-highest-levels-for-9-years.html

Housing Minister defiant on tax changes

Published On: April 21, 2016 at 10:32 am

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With the buy-to-let sector reeling from a raft of legislation and tax changes, Housing Minister Brandon Lewis has moved to defend these measures during a question and answer session.

Speaking to FT.com yesterday, Mr Lewis backed alterations in regulation, such as the additional 3% stamp duty and mortgage interest tax relief for buy-to-let landlords.

Defiance

In the session, Mr Lewis was asked:

‘Why does the Government want to cut down on landlords and how much do you think the recent measures against them (cuts to mortgage relief etc) will reduce the number of buy-to-let owners?’

Responding, Lewis replied:

‘The changes create a fairer system where buy-to-let investors do not have as much advantage over owner occupiers (who will not have 0 per cent mortgages or the mortgage tax relief, which buy-to-let had). Plus institutional investment (Build To Rent) will be able to continue to grow and I fully support the professionalism of the sector as it grows with more institutional investment.’ [1]

Rogue-landlords

Also in the question and answer session, Mr Lewis was pressed on whether or not he would give his backing to a public database of so-called rogue landlords.

Lewis answered by stating:

‘Our Housing and Planning Bill currently in the House of Lords will introduce bigger fines and banning orders as part of the biggest crackdown on rogue landlords by any Government ever. And we will introduce a database of rogue landlords.’[1]

Housing Minister defiant on tax changes

Housing Minister defiant on tax changes

Capital Pains

Finally, Lewis was asked:

‘Why does the Government allow homeowners to sell their houses and pay no capital gains tax?’ 

Lewis answered:

‘We have halved the time a property can sit empty before capital gains tax is due and we have tightened the rules about buying residential property through a company. Additionally, we will support families buying their own home through a three percentage point surcharge on rates of stamp duty land tax on purchases of additional properties, like buy-to-lets and second homes.’[2]

A full transcript of the questions can be found be visiting the Financial Times website.

[1] https://www.lettingagenttoday.co.uk/breaking-news/2016/4/housing-minister-claims-buy-to-let-changes-create-a-fairer-system

[2] http://www.ft.com/cms/s/0/9bf91dee-071a-11e6-9b51-0fb5e65703ce.html#axzz46SGeH610

 

 

BTL mortgage rates cut to boost market

Published On: April 15, 2016 at 11:35 am

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Mortgage lenders are cutting rates on products intended for buy-to-let landlords in a bid to give the market a boost in the wake of the stamp duty deadline passing.

Cuts

Comparison website Moneyfacts says that the average two-year fixed buy-to-let mortgage rate currently stands at 3.32%. This is down on the 3.59% recorded at the same time last year and substantially lower than the 4.03% average shown in April 2014.

The average five-year fixed rate deal for buy-to-let landlords is presently 4.0%, in comparison to 4.37% in April 2015 and 4.76% two years ago.

Charlotte Nelson, a spokeswoman for Moneyfacts, said, ‘while the new tax rules and stamp duty changes could potentially take the shine off buy-to-let investment, property is often seen as a safe bet and with rental properties in demand and rent high, buy-to-let remains an attractive proposition.’[1]

‘A year on from pension freedoms, almost £3bn has been paid out in cash lump sum withdrawals, so it’s highly likely that some of this money has been accessed with buy-to-let in mind,’ she added.[1]

BTL mortgage rates cut to boost market

BTL mortgage rates cut to boost market

Downwards

Analysts from Moneyfacts have noted that savings rates are so low that many retirees investing in buy-to-let following changes to pension rules are starting to look elsewhere. A separate investigation underlines how the majority of retiree landlords are dependent on their rental income.

Lenders are keen to avoid this group of investors to consider their options, therefore are offering some of the best rates the sector has witnessed. What’s more, rates were already low in the run up to the stamp duty changes, which has further aided the downward spiral of rents.

Concluding, Nelson said, ‘while the current pressures on the market are not yet causing rates to rise, borrowers should remember that they will now be facing tighter lending rules, including stricter affordability checks, so it is even more important for potential to seek financial advice to see if buy to let really is the right option for them.’[1]

[1] https://www.lettingagenttoday.co.uk/breaking-news/2016/4/lenders-try-to-bolster-flagging-buy-to-let-market

Buy-to-let mortgage products rise in Q1

Published On: April 15, 2016 at 8:51 am

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The total number of buy-to-let mortgage products available in Britain rose substantially in the first three months of 2016.

Data from the latest Mortgage for Business index reveals that residential landlords with a limited company were particularly spoilt for choice.

Increases

An increase in product numbers aimed at limited company mortgage seekers saw the total of buy-to-let mortgages rise from 963 in Q4 of 2015 to 1,105 in the opening quarter of this year.

In addition, figures from the report show that remortgages outstripped purchases for all property types, except HMO’s, where purchase numbers were marginally higher.

Unsurprising

David Whittaker, managing director of Mortgages for Business, noted, ‘with tenants looking for less expensive accommodation and landlords looking for higher yields it is no surprise that the number of HMO purchases has risen in the last quarter.’[1]

‘Even though remortgage transactions were higher this is not to say purchase numbers were down,’ Whittaker continued. ‘All types of residential investment showed a marked increase in the number of purchase transactions as investors rushed to beat the 3% stamp duty surcharge deadline.’[1]

Buy-to-let mortgage products rise in Q1

Buy-to-let mortgage products rise in Q1

The Index also shows that rental yields for semi commercial property also increased in the opening quarter of 2016. This made it the second biggest yielding property category.

Mr Whittaker forecasts that the number of buy-to-let landlords buying semi-commercial property will rise in the upcoming months. He believes this is due to the fact mixed-use properties are classed as commercial premises and will not be subject to the increases in Stamp Duty surcharges.

[1] http://www.propertywire.com/news/europe/uk-buy-let-mortgages-2016041411796.html