Posts with tag: buy-to-let landlords

Tenants prefer short-term lease agreements

Published On: February 25, 2016 at 10:13 am

Author:

Categories: Property News

Tags: ,,,,,

New research has revealed that nearly four out of five tenants would like a rental lease that lasts between six months and two years.

Further data from the report by online letting agent PropertyLetByUs.com shows just one in five tenants preferred leases of between two and five years.

Just over half of tenants said that they hoped to move further up the rental ladder when they could afford to do so.

Homely

The survey found that the majority of tenants want their rental accommodation to feel like home, even if they are letting for a short period. 60% of tenants said they would like to redecorate their property and over 50% said they wanted to alter the carpets or flooring.

23% of tenants expressed their desire to install decking, 18% wanted to install a hot water tub and 13% wished for a patio.

‘Clearly tenants don’t want long leases,’ observed Jane Morris, Managing Director of PropertyLetByUs. ‘For many, longer than two years does not give them the freedom and flexibility they need. They may find a job, then move on to another one, start out living with friends and then want to move in with a partner. However, landlords like longer leases-they get charged fees each time their agent needs to find new tenants. Landlords can save money by using an online lettings agent instead of a high street lettings agent.’[1]

Tenants prefer short-term lease agreements

Tenants prefer short-term lease agreements

Aspirations

Morris said that her company’s research, ‘shows that many tenants do aspire to owning their own home and a large proportion of them want to redecorate their rental accommodation.’ She feels, ‘this can cause a major headache for landlords, with many facing redecorated properties at the back end of the lease, with no prior approval secured by the tenant. The latest Tenant Deposit Scheme report shows that redecoration is a major cause of dispute, taking 32% of the share.’[1]

‘We have seen properties with walls painted in bright colours, despite landlords specifying that the décor must be a neutral and standard lettings property colours, from off-whites and beige to magnolia,’ she continued. ‘One tenant decided to decorate the whole house black and white; removed all the carpets/lino downstairs and upstairs; and painted all the floors/ceilings/kitchen/bathroom tiles in a beautiful shade of black! She did keep the walls white. Another tenant chose a dark burgundy for all the walls, throughout the property.’[1]

Inspections

Concluding, Morris said, ‘even when a tenant repaints in the correct or authorised colour scheme, there are still problems. We have seen instances of bad paint application, patchy walls, paint spills on carpets, curtains, fixtures and fittings, all of which the tenants will be responsible for at the end of the tenancy.’[1]

She stresses that, ‘it is vital that landlords carry out mid-term property inspections and ensure the inventory and check-in stipulates the colour and quality of the decoration. If tenants do want to decorate, they should be given colour swatches to choose from and clear instructions on what can be painted and how.’[1]

[1] http://www.propertyreporter.co.uk/landlords/majority-of-tenants-want-short-term-leases.html

 

The Private Rental Sector Will Continue to Grow, Despite Clampdown on Landlords, Says Savills

Published On: February 24, 2016 at 3:54 pm

Author:

Categories: Landlord News

Tags: ,,,,,,

Over the last few months, landlords have been subject to forthcoming changes to the buy-to-let market, which could dampen future investment. However, Savills believes that the private rental sector will continue to grow, despite the measures.

The Government has announced a series of policies designed to clamp down on buy-to-let investors and increase homeownership in the country. The changes to landlord law and finances are detailed here: /contrary-to-popular-belief-buy-to-let-is-not-dead-insists-finance-firm/

The Private Rental Sector Will Continue to Grow, Despite Clampdown on Landlords, Says Savills

The Private Rental Sector Will Continue to Grow, Despite Clampdown on Landlords, Says Savills

Despite the changes, demand for rental properties appears to be as high as ever, with the latest forecast from Savills suggesting that the sector will continue to grow for years to come.

The country’s strengthening economy and improved employment figures, which have hit an all-time high recently, would usually push up the number of homebuyers. However, the continuing surge in house prices – the average is edging closer to £300,000 – means that many people are still priced out of the property market, leaving the private rental sector in a state of constant expansion.

Savills reports that the Government’s statistics reveal the private rental sector has grown by around 17,500 homes per month for the ten years to the end of 2014. The firm believes that this growth will continue over the next few years, with Government policies designed to dampen the market having only a minimal impact.

Despite continued demand, private tenants may start to feel the pinch, as landlords are forced to raise rents in response to changes to their finances.

At present, there are 4.6m households in the private rental sector, with 260,000 added each year, says Savills.

But even with the Government trying to push for increased homeownership, it is only expected to bring around 40,000 new homeowners per year from the private rental sector, meaning that rental market growth will still continue, rising by only 15% less than the current level, at 220,000 per year.

With constant high demand expected for the sector, institutional investors are seeking clarity from the Government regarding their exemption from certain policies.

Originally, it was stated that institutional investors (those purchasing 15 or more properties in one transaction) would be exempt from the Stamp Duty surcharge arriving in April, but this has not been confirmed.

Additionally, landlords that operate as limited companies will not be subject to the cut in mortgage interest tax relief, set to be implemented gradually from 2017. Over 40% of landlords are looking at forming a limited company to avoid the change.

If large-scale investors are not exempt from the Stamp Duty surcharge, there is a risk of a lack of money, and therefore shortage of supply, coming into the private rental sector.

Where are Buyers and Tenants Moving to? (So Where Should You Invest?)

Published On: February 18, 2016 at 11:27 am

Author:

Categories: Property News

Tags: ,,,,

reform of leasehold

New research from Urban.co.uk has revealed the top places that people in different age groups are moving to in the UK. By analysing the data, landlords may be able to work out where they can buy a profitable investment.

Online estate agent Urban.co.uk has evaluated Office for National Statistics (ONS) internal migration statistics to find out which cities in England and Wales are the most popular to move to.

Birmingham was the only area included in the top ten destinations for all age groups – 18-21, 22-29, 30-64 and over-65s.

Alongside Birmingham, Manchester, Nottingham and Leeds are all becoming increasingly attractive locations compared to London for those aged 18-21.

The 22-29 age group is also heading north, with many favouring Birmingham, Manchester and Leeds over the more traditionally popular London boroughs of Islington and Hackney.

Birmingham was the most popular area to move to for those aged 30-64, while the over-65s prefer greener regions, such as Wiltshire and Cornwall.

The main finding from the study is that young people are increasingly leaving the capital.

The figures found that Birmingham is London’s biggest rival for all of those aged under 65. In the over-30 category, 12,500 home movers relocated to Birmingham during the past year.

For 22-29-year olds, Birmingham was the third most popular city to move to, coming in ahead of previously popular London boroughs such as Tower Hamlets and Southwark.

Birmingham was also in the top five cities for 18-21s, with Leeds, Nottingham and Manchester making up the top three. Over 45,000 youngsters moved to these areas in the last 12 months, indicating affordability pressures and a definite trend of migration towards the north. This may be due to the quality of educational facilities and the student populations of these cities.

The co-founder of Urban.co.uk, Adam Male, says: “The range and quality of educational institutions north of London, in places such as Leeds, Nottingham and Birmingham, have undoubtedly played a large part in attracting more and more young people away from London and its surrounding regions.

Where are buyers and tenants moving to?

Where are buyers and tenants moving to? (So where should you invest?)

“The interesting trend here is that young people appear to be staying in these regions after university and this is something we can expect to see more of in the coming years, due to their lively culture, increasing job opportunities and a competitive property market.”1 

Older generations are choosing more peaceful and greener spots, such as Wiltshire, Cornwall and the East Riding of Yorkshire over London. Birmingham was also included in the top ten for over-65s.

Visit Birmingham’s Emma Gray believes: “People are increasingly seeing our region as an obvious choice to build a career and raise a family, thanks to excellent schools, outstanding connectivity and affordable homes and amenities.”1 

Indeed, compared with London, Birmingham offers a competitive property market.

As first time buyers continue to struggle getting onto the property ladder, house hunters in Birmingham will find that the average house price is a huge £300,000 cheaper than in the capital.

The Birmingham suburb of Moseley Village was even named the best place to live in the UK by the Sunday Times, beating Mayfair in London.

Investment in the city, including HS2 and the Curzon Street regeneration, has also boosted Birmingham’s reputation as a business centre, making it a hotspot for start-ups and small businesses, in turn creating more job opportunities and investment potential. The city has been named, for the second time, the most investable city, above prime spots like Madrid, London and Paris, in an annual survey by the Urban Land Institute and PwC.

If you are seeking to invest in buy-to-let and beat the 1st April deadline for an added 3% Stamp Duty, could Birmingham be the best place to do it?

1 http://www.propertyreporter.co.uk/property/where-is-currently-the-most-popular-place-to-move-to-in-the-uk.html

The High Price of Missing the Stamp Duty Deadline

Published On: February 17, 2016 at 12:54 pm

Author:

Categories: Landlord News

Tags: ,,

The 1st April deadline for an increase in Stamp Duty for buy-to-let investors and second homebuyers is moving ever closer, and the price of missing this date is high.

The High Price of Missing the Stamp Duty Deadline

The High Price of Missing the Stamp Duty Deadline

Tax specialists are warning that many property buyers could be caught out by the surcharge, as the deadline is 1st April, rather than the start of the new tax year on 6th April.

Missing the deadline by just a day will make buyers subject to the additional 3% Stamp Duty charge. This increases the amount of tax charged on the average property in England and Wales, costing £188,270, by a huge £5,648. In London, the surcharge could add over £15,000 to the cost of buying an average property.

The Director at accountancy firm Smith & Williamson, Chris Springett, insists that anyone looking to purchase a residential buy-to-let, investment property or second home must be sure that they can complete by midnight on 31st March 2016.

This applies unless contracts were exchanged on or before 25th November last year.

Springett adds: “Missing the date by a few days could cost thousands of pounds and I fear many people could inadvertently miss out.”

The Stamp Duty charge on a home costing £188,270 is currently £1,265. However, this will rise fivefold to £6,913 from 1st April for buy-to-let landlords and second homebuyers.

Stamp Duty on the average London property, costing £514,097, will more than double from a current £15,704 to £31,127.

Springett concludes: “The changes are due to apply from April Fool’s Day, so anyone seeking to buy a second home, buy-to-let or residential investment property should keep this in mind.”1

Many landlords are already rushing to buy ahead of the deadline in order to avoid paying the additional tax.

1 http://www.mindfulmoney.co.uk/personal-finance/dont-be-an-april-fool-tax-hike-on-second-home-buyers-comes-into-force-on-april-1st-not-april-6th/

Landlords’ confidence, ‘at all-time low’

Published On: February 14, 2016 at 11:11 am

Author:

Categories: Landlord News

Tags: ,,

An alarming statement by the CEO of the National Landlords Association (NLA) has painted a worrying picture of the current state of the buy-to-let sector.

According to Richard Lambert, confidence in the market is at an all-time low and is, ‘worse than levels witnessed during the financial crash.’[1]

Tumbling

Mr Lambert will address peers at the Building Societies Association’s annual meeting and is expected to say that confidence in landlords’ business expectations have slipped by more than a third in the last year. He believes it is fallen from 67% to a record-low of 43%.

If he is to be believed, the current level of confidence in the BTL sector is 5% lower than levels seen after the financial crash of 2007.

Also in his address, Lambert will highlight how the actions of the Chancellor in the Budget and Autumn Statement has led the NLA to backtrack on predictions of growth in the sector. Originally, the NLA suggested that the sector would grow by more than one million households in the next five years.

Now, the firm suggests that if landlords act as predicted, there will be a sharp sell-off of properties of up to 50,000 in the next year. This will be followed by another 100,000 properties sold every year thereafter to 2021.

Landlords' confidence, 'at all-time low'

Landlords’ confidence, ‘at all-time low’

Bleak findings

Lambert will also present findings from the NLA Quarterly Landlord Panel survey, which shows:

  • The number of landlords looking to sell in the next year has doubled from 7%-19%
  • 28% of landlords do not plan to add to their portfolio
  • 10% plan to reduce their housing stock
  • 5% intend on selling their entire property stack

‘Two speeches from the Chancellor in 2015 have led to a crisis in confidence greater than when all but a few BTL products were immediately withdrawn from the market following the 2007 financial crash,’ Lambert said. ‘Up to half a million properties could come onto the market as a result of the Summer Budget and Autumn Statement, which the Chancellor will no doubt deem a success.’[1]

Continuing, he said, ‘there is no guarantee that these will be the one or tow-bedroom flats of small houses that will appeal to first time buyers, especially as landlords are more likely to offload less desirable stock in less desirable areas.’[1]

‘We’ve always said that Mr Osborne is blinded to the impact of his decisions by his commitment to homeownership. He may have intended to focus on the small-scale part-time investor, but it’s the larger and more professional landlords who will be hit worst by cuts to mortgage tax relief and increases to stamp duty and who appear most likely to leave the sector,’ he concluded.[1]

[1] http://www.propertyreporter.co.uk/landlords/landlord-confidence-crashes-to-all-time-low.html

 

Swipe Right for the Perfect Property!

Published On: February 14, 2016 at 10:43 am

Author:

Categories: Landlord News

Tags: ,,,,,

Some of us might take to our smartphones to find the perfect partner this Valentine’s Day, but for property lovers, there’s another app that will deliver more promises than any stuffed animal or box of chocolates.

Knocker is the smartphone app that connects prospective homebuyers and tenants with their dream property. Simply swipe left or right to shortlist a selection of possible properties.

“This may sound brutal, but it’s the first stage in a selection process,” explains Jon Grant, one of the app’s founders. “What you then do with a shortlist is really up to you.”

Grant believes that Knocker has “changed the way that people look at properties, and made the whole process more immediate and responsive”.

It seems that the majority of buyers and renters already use the internet to search for their next home. So what does Knocker do differently?

To start with, you can simply walk down the street, spot a house for sale, load up the app and find out how much it costs – ideal for those who know exactly where they want to live and want to find out about prices in the area.

Swipe Right for the Perfect Property!

Swipe Right for the Perfect Property!

The Tinder-esque app will also help the over 50% of us that buy a property because we’ve fallen in love with it.

“I think most people know whether the property is for them within ten seconds of stepping into a place,” says Grant. “If the stars align, you’ll know if the property is just right, and feelings grow from there.”

So what makes us fall in love with a property?

Grant explains: “The key things are whether the property meets their need and their mental image of what they want from a home. I think if anything exceeds that even slightly, they could be hit by Cupid’s arrow.”

And it seems viewing a property really can be as romantic as that. Grant has found that how the property is presented, how the viewer is feeling, and factors such as the general environment and the weather that day can all play a part.

Although we may assume younger buyers are more likely to use an app like this, Knocker’s largest demographic ranges from 22-44, with most spending time to browse properties, shortlist their favourites and contact agents.

Landlords are also catching onto the trend. Grant has heard from numerous buy-to-let investors who “love using the app and have made purchases as a result of finding properties”.

He believes the benefit for landlords is being able to identify a particular street, understand prices in the area based on experience or what they see on the app, and find investment opportunities that they know will make them strong returns.

But should a landlord do what other buyers do and fall in love with a property? “Probably not,” says Grant. “It would be like a farmer naming his livestock!”

He continues: “I don’t think there’s anything wrong in having strong feelings towards an item in your portfolio, but a polarised emotion – such as love – might cloud overall objectivity.”

Knocker is most commonly used in fast-paced cities, where affordability and availability make it vital to be able to find a property quickly and efficiently. 20% of Knocker users have a property to sell, but are yet to appoint an estate agent. “We’re planning to do something about that really soon,” says Grant.

With changes to landlord taxes fast approaching, could now be the time to take the plunge and enter the speed-swiping trend?

Knocker might just be right up your street, as it’s proved to cast its matchmaking spell for many. “We know that users of our app absolutely love it, because they tell us, and then we blush a little,” adds Grant.

Visit the website and download the app here: http://knockerapp.com/?utm_source=Landlord%20News&utm_medium=Blog&utm_term=knocker%2C%20app%2C%20&utm_campaign=Landlord%20News