Posts with tag: buy-to-let landlords

What do students require from their rental accommodation?

Published On: March 12, 2016 at 12:04 pm

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A new survey has uncovered what students really want from their rental accommodation.

Investing in student property is still popular amongst buy-to-let landlords, who are enticed by the thought of substantial rental yields, low void periods and manageable tenants.

Students Needs

Research conducted from 500 tenants by the Mistoria Group revealed students’ top requirements from their housing to be:

  • Safe and secure accommodation-89%
  • Fast broadband connection-88%
  • A washing machine-76%
  • Close proximity to university campus-72%
  • High-quality accommodation-59%
  • Good proximity to local amenities-47%
What do students require from their rental accommodation?

What do students require from their rental accommodation?

Worries

The cost of going to university is currently at its highest ever level. It comes as little surprise then to learn that students’ greatest concerns are to do with financial issues.

These top financial worries were found to be:

  • Cost of food-66%
  • Public transport fees-42%
  • Mobile Phone bills-40%
  • Energy costs-14%

Accommodation

Mish Liyanage, Managing Director of the Mistoria Group, said, ‘our data shows the vast majority of students want to live in high quality, shared accommodation, with good internet access and affordable bills. We also know from previous research that the overwhelming majority of students (80%) want to live in shared accommodation with friends. Only 5% want halls of residence and just 3% of students want to live in a self-contained room or flat.’[1]

‘If landlords and investors provide the right type of property, they will be able to attract lucrative students,’ Liyanage continued. ‘Student accommodation offers investors a number of attractive features such as high yields as students settle for less space than other tenants; high occupancy; and it is neatly counter-cyclical, as more people go to university during economic downturns.’[1]

[1] http://www.propertyreporter.co.uk/landlords/what-do-students-actually-want-from-their-rental-accommodation.html

 

Could the Buy-to-Let Sector Harm the UK Economy?

Published On: March 12, 2016 at 8:21 am

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The buy-to-let sector has boomed in recent years, fuelled further by landlords rushing into the market since the start of the year. But could this surge harm the UK economy?

The Deputy Governor for Financial Stability at the Bank of England (BoE), Sir Jon Cunliffe, recently told a House of Lords committee that a huge rush of buy-to-let landlords may sell en masse if tax rates rise or higher interest rates reduce their profits.

He believes that this could cause significant house price declines and subsequent threats to the UK economy.

Could the Buy-to-Let Sector Harm the UK Economy?

Could the Buy-to-Let Sector Harm the UK Economy?

Lending data from the BoE shows that buy-to-let mortgages have risen from 11.3% of all new loans in the third quarter (Q3) of 2007 to 15.6% in Q3 2015.

Cunliffe says that if any changes are made in the economy to tax or interest rates, landlords may suffer dismal returns or even losses. This could then cause a mass of landlords to leave the buy-to-let sector and cause instability throughout the UK economy.

In last year’s Budget, the Chancellor announced several changes to landlord finances.

From April 2017, buy-to-let landlords will lose the ability to offset all of their mortgage interest against income tax on rent.

Two landlords have been leading a legal challenge against the change, and HMRC is expected to respond by 16th March.

Additionally, the automatic 10% Wear and Tear Allowance will be replaced from 1st April. Landlords will only be able to claim back on work that has actually been completed.

And while significant figures such as Cunliffe have expressed concerns over these additional costs, research among landlords suggests that rents will be forced up as a result, and many are thinking of leaving the sector. In fact, a recent study from the National Landlords Association (NLA) has found that the number of landlords thinking of leaving the buy-to-let sector has quadrupled in six months in central London.

However, economic analysts expect any interest rate rises to be postponed until 2020.

Indeed, the buy-to-let sector is proving buoyant at the present time. Since the beginning of the year, there have been many reports of a booming market, as landlords look to expand their portfolios ahead of the 1st April Stamp Duty deadline.

As of 1st April, buy-to-let landlords and second homebuyers will be charged an extra 3% in Stamp Duty on properties worth over £40,000. Conveyancers have recently called for the plan to be scrapped.

Although it is expected that buy-to-let investment will decline after the surcharge is introduced, the booming market suggests that landlords are confident in the sector and do not expect the forthcoming tax changes to be much of a threat to their finances. If landlords stick with the sector, perhaps the economy will not fare too badly.

Conveyancers Urge Osborne to Scrap Stamp Duty Plans

Published On: March 11, 2016 at 12:00 pm

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Conveyancers have spoken out against the Stamp Duty changes that are set to be implemented on 1st April, urging Chancellor George Osborne to scrap or modify the plans.

Osborne is due to reveal the final details of the Stamp Duty changes in next week’s Budget, on 16th March. This would leave conveyancers with just nine working days in which to enforce the new tax system.

Yesterday, the UK’s largest conveyancing firm, My Home Move, revealed further evidence that suggests a boom in the buy-to-let sector and second home market.

Now, the Conveyancing Association has urged Osborne to favour stability over continual change regarding the housing market and mortgage industry.

The association says that there has been a surge in buy-to-let transactions, which has stretched all those involved in the property sector and “placed an unnecessary burden on conveyancers to meet an artificial deadline”.

It also claims that there is a high amount of uncertainty surrounding key parts of the change, such as exemption for larger landlords purchasing 15 or more properties in one transaction.

Conveyancers Urge Osborne to Scrap Stamp Duty Plans

Conveyancers Urge Osborne to Scrap Stamp Duty Plans

From 1st April, buy-to-let landlords and second homebuyers will be charged an extra 3% in Stamp Duty on properties worth over £40,000.

The Chairman of the Conveyancing Association, Eddie Goldsmith, says: “Unsurprisingly, the conveyancing market is looking for a period of stability, but I suspect we won’t be getting that post-next week’s Budget.

“The publication of the final rules for extra Stamp Duty charges on additional properties will be made available, and one can’t help think there is likely to be some considerable confusion around them, not forgetting that the conveyancing industry will have to cope with these changes from the start of April.

“The small amount of time this provides firms to ready themselves and to ensure all stakeholders in the market are clear on these new rules is, quite frankly, ludicrous.”

He continues: “Not only would we like to see these additional Stamp Duty charges dropped, or at the very least watered down, but we feel any further change in the UK housing market, unless positively focused on areas like helping to increase property supply or supporting first time buyers, will only add to the instability we – and many others – will have to cope with.

“We believe the Chancellor should allow the market time to breathe; in our view, it is much better served by supporting steady transaction numbers, rather than the artificially-created spikes that have been far too prevalent.

“The last three months of increased buy-to-let transactions have been a case in point.”

He concludes: “Instead, we would like to see the status quo post-April maintained and allow us to plan and prepare our resources adequately based on the market itself, rather than deal with further uncertainty generated by ongoing intervention.”1 

Conveyancers have previously expressed concern over the short timeframe between the Budget and the implementation of the Stamp Duty surcharge: /conveyancers-express-concern-over-short-timeframe-between-budget-and-stamp-duty-change/

Additionally, Paul Saunders, the Head of Residential Conveyancing at Conveyancing Association member firm Shakespeare Martineau, has expressed his thoughts.

He believes: “The conveyancing industry and indeed buy-to-let landlords need some clarity from the Government on the Stamp Duty changes for buy-to-let properties.

“There remain many unanswered questions and the benefits/burden is difficult to interpret for all parties. On a similar vein, I hope that the Government will not continue its trend to disincentivise buy-to-let landlords, as we do not know until after 1st April what damage this could cause to the housing market.”

He adds: “One key subject I would like to see addressed is the huge shortage of housing. The National Housing Federation estimated 974,000 homes were needed between 2011 and 2014, with figures from councils showing only 457,000 actually built.

“With over 11m people over the age of 55, new housing needs to reflect the changing demographic and I look forward to hearing concrete plans from the Government regarding housing development.”1 

1 http://www.todaysconveyancer.co.uk/conveyancing-association-hopes-for-stability-for-in-next-week-s-budget-cms-16054

79% of tenants happy with their landlord

Published On: March 10, 2016 at 10:24 am

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A new survey of over 800 Private Rented Sector tenants has returned pleasing results for buy-to-let landlords.

According to the investigation by BDRC Continental, 90% of those questioned said that they felt their rental accommodation is their home.

Satisfied

Further data from the survey indicates 79% of tenants are satisfied with their current landlord. 13% replied that they had rented from a rogue landlord in the past, down from 15% in the previous quarter.

Surprisingly, average rents decreased amongst respondents, sliding from £660 in quarter three of 2015, to £607 in quarter four.

As a result, those believing their rent to be either good or very good value increased from 18% and 48% in quarter three to 20% and 49% respectively n quarter four of last year.

The average length of time tenants are staying in the sector for has also risen, from 12 years in quarter three of last year, to 14 in the final quarter. Respondents to the survey were found to have spent an average of 9.5 years in their present rental properties.

79% of tenants happy with their landlord

79% of tenants happy with their landlord

Changing demographic

John Heron, Director of Mortgages at Paragon, noted, ‘our latest tenant survey data highlights the way in which tenure distribution in the UK is continuing to change. In common with the most recent English Housing Survey we are seeing greater numbers of families living the in the PRS and for longer periods of time. This has coincided with improved levels of satisfaction and better value, it is clear that many tenants in the PRS regard the sector as their long term home.’[1]

‘This latest data highlights more clearly than ever, the vital role the PRS now plays in housing Britain and housing policy needs to be applied carefully, to reflect this fact and to avoid impacting those who rely on the PRS for a home,’ Heron added.[1]

[1] http://www.propertyreporter.co.uk/property/90-of-tenants-consider-their-rented-property-to-be-their-home.html

 

Further Evidence of Boom in Buy-to-Let Sector

Published On: March 10, 2016 at 9:41 am

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My Home Move, the UK’s largest conveyancing firm, has found further evidence of a boom in the buy-to-let sector and second home market.

The provider’s data reveals a 46% increase in buy-to-let and second home activity since November, when Chancellor George Osborne announced a 3% Stamp Duty surcharge on buy-to-let landlords and second homebuyers.

Further Evidence of Boom in Buy-to-Let Sector

Further Evidence of Boom in Buy-to-Let Sector

Yesterday, new figures from Connells Survey & Valuation confirmed that landlords are rushing to purchase new rental properties ahead of the additional charge.

The surcharge is set to be enforced in just over three weeks’ time, on 1st April.

Research by My Home Move revealed that 99% of conveyancers have seen a rise in the amount of clients looking to complete purchases before the deadline.

The firm’s CEO, Doug Crawford, says that his earlier prediction – that the property market would experience a boom in the first part of the year – had come to fruition.

My Home Move has also reported a surge in inquiries from those hoping to avoid further tax changes, by buying additional properties as a limited company. Recent data shows that 40% of landlords are considering forming a limited company.

Details of the Stamp Duty surcharge are due to be disclosed in next week’s Budget, on 16th March.

Meanwhile, the Royal Institution of Chartered Surveyors (RICS) has forecast a slowdown in house price growth once the Stamp Duty changes have been implemented.

The RICS has described the current state of the property market as a short-term rush of buy-to-let activity.

LSL/Acadata has also witnessed a boom in buy-to-let sales over the past month. It says that this has helped drive a surge in property sales, up 12% on the month, and 9.3% annually.

We will keep you updated on the announcements in the Budget and continue to offer advice for landlords at a time of change in the buy-to-let sector.

Rush in BTL activity sees FTB enquiries slide

Published On: March 9, 2016 at 1:48 pm

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Latest figures released by comparethemarket reveal that the ongoing buy-to-let surge is seeing many first-time buyers squeezed out of the market.

Many would-be buyers are struggling to make their way out of rental accommodation and onto the housing ladder.

Growth

Data from the analysis shows that the proportion of buy-to-let mortgage enquiries rose by 4.4% to stand at 18.2% of the total number of enquiries during the last year. Annually, the proportion of enquiries for initial buyers fell by 3.7% to hit 23.5%.

In January of this year, there was little sign of the market reducing. Year-on-year growth for the month stood at 16%, with a 62% increase in comparison to December.

Despite buy-to-let investors rushing to beat the new stamp duty deadline on all purchases from April 1st, comparethemarket said there is, ‘little expectation’ of buy-to-let enquiries outstripping the number of first-time buyer enquiries.

Rush in BTL activity sees FTB enquiries slide

Rush in BTL activity sees FTB enquiries slide

Risk to stability

Jody Baker, Head of Money for comparethemarket.com noted, ‘the buy-to-let market has been subject to both extensive discussion and criticism over the past year with even the Bank of England’s Financial Policy Committee labelling it a risk to the UK’s financial stability.’[1]

Baker feels that, ‘this data only reinforces the view that over the past year, families and others looking to get a foot on the housing ladder are being priced out by landlords.’ Concluding, Baker said that it was, ‘great to see the Government take action in the Autumn Statement, but time will tell as to what the material impact will be on the market after 1st April.’[1]

[1] http://www.propertyreporter.co.uk/landlords/btl-boom-sees-ftb-enquiries-dr0p-37.html