Posts with tag: buy-to-let landlords

NLA’s Latest Campaign Will Help Landlords

Published On: December 15, 2015 at 12:14 pm

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NLA's Latest Campaign Will Help Landlords

NLA’s Latest Campaign Will Help Landlords

The National Landlords Association (NLA) has launched a new campaign that hopes to help landlords in making their lettings businesses more profitable.

Reinventing Renting is designed to identify opportunities for buy-to-let investors.

The campaign includes many useful resources, including guides and presentations, on various topics. They will help landlords:

  • Choose the right investment.
  • Improve financial planning
  • Expand their portfolios and maximise gains.
  • Reduce their exposure to a range of risks associated with renting out property, including: imminent interest rate rises, rent arrears and rogue tenants.

Reinventing Renting focuses on the landlords that are struggling to make a profit, by exploring different business approaches and tenant markets, while offering assistance to landlords hoping to make their business more profitable.

The campaign arrives after announcements in the summer Budget and Autumn Statement, which could seriously hit profitability within the sector.

The NLA has also identified some of the good and bad characteristics of being a landlord in its Vogue or Rogue section.

Chairman of the NLA, Carolyn Uphill, says: “As the leading landlord association, we’re here to provide landlords with all the tools and information needed to make a success of letting.

“Over the next few months, Reinventing Renting will look at some of the key issues for landlords and provide support and tips to improve the way they run their business.

“The campaign has something for both new and experienced landlords and will be particularly useful for those who are struggling to make things work or worried about how the changes to mortgage interest taxation will affect them in the future.”1

For more landlord advice, look here: http://www.landlords.org.uk/reinventingrenting

1 http://www.landlords.org.uk/news-campaigns/news/nla-launches-new-campaign

Keep your property safe this Winter

Published On: December 14, 2015 at 12:51 pm

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Categories: Property News

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As Autumn turned to Winter, there were precious few people looking forwards to the months of cold, dark nights.

However, November and December typically see burglars licking their lips. During this time period, burglaries across Britain rise by an average of 25% each year, with Christmas gifts their main target.

Homeowners and tenants alike then must make sure they follow key guidelines in order to keep their properties safe from these mindless few.

Keeping your property safe

‘As the night’s draw in, burglars are likely to try and take advantage of the darkness,’ observed Steve Coyle, Operations Director at Edinburgh based property management specialist Cullen Property. ‘To prevent the upset and damage caused by break-ins, both owners and tenants can take a few simple measures to make their home safer, especially if they are planning to go away for a few days.’[1]

8 top-tips for keeping property safe during the dark nights are:

  • Lock up properly

This sounds obvious but a surprising number of burglaries occur as a result of a homeowner or tenant not fully locking doors or windows. Yale or mortice locks should be used where possible. In addition, leaving keys out under a doormat or plant pot are also leading to more break-ins. Police figures show 6,000 burglaries during 2014 involved intruders using keys to enter a home.

  • Don’t assume

Those living in top floor flats or above the ground floor could assume that their property is safe. However, burglars are undeterred by location and go to often extreme measures to target certain homes. Regardless of location, owners and tenants should make sure their homes are secure.

  • Safeguard Valuables

If a householder or tenant knows that they are going to be away from a property for a considerable period, they should look at taking jewellery, laptops and other expensive items with them.

Keep your property safe this Winter

Keep your property safe this Winter

  • Secure windows

By closing all property windows and making sure all latches are attached, people can drastically reduce the chance of burglars being able to gain access to the home.

  • Let there be light

People living in a property should put lamps on a timer when they are out to give the impression there is someone in, particularly in the afternoons and evenings.

  • Store inside

Things such as bikes that are commonly left outside or in a communal stair should be brought inside the property. Landlords should also check their landlord insurance to check what things are covered on their policy.

  • Get a little help from friends

When away from a property for a considerable amount of time, people should ask their landlord, a neighbour or friend to check on the property while they are away.

  • Don’t broadcast that you aren’t there!

Another obvious one but don’t broadcast holidays or trips away on social media, unless you are confident your posts can only be seen by trusted friends!

 

[1] http://www.propertyreporter.co.uk/landlords/tips-to-keep-your-property-safe-during-burglars%C3%A3%C2%A2%C3%A2%E2%80%9E%C2%A2-busiest-weeks.html

 

 

Stamp Duty rises amount to 11 months net income

Published On: December 14, 2015 at 10:55 am

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Categories: Finance News

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New research has found that the cost of the forthcoming 3% stamp duty on buy-to-let properties will be equivalent to 11 months income for the average mortgaged landlord.

An investigation by property services group Countrywide suggests that most private sector landlords looking to buy after April 2016 will attempt to offset this cost by offering less when buying.

At present, rents on newly let properties increased by 2% year on year. This rise was led by markets in the East of England.

Rises

In this year’s Autumn Statement, Chancellor Osborne announced plans to introduce a new 3% stamp duty tax rate for buy-to-let landlords and second home owners.

Research from Countrywide shows that should that larger tax burden not be factored into the purchase price of a property, this would lead to a reduction in gross yield of 0.2%. This is the same as 11 months income for the typical buy-to-let landlord, when borrowing costs are taken into account based on the average LTV of 68%.

Buy-to-let landlords in the South West and the North of England will experience the greatest cost relative to their rental income, with the extra tax burden equivalent to 14 and 12 months rental income respectively. Landlords in the North West of the country will see the least cost hike, accounting for 8 months of income.

The majority of buy-to-let purchases were found to take place in London, the South and East of England. 60% of homes sold in this market during the past year were in these regions. Landlords within these areas face the greatest cash increase in stamp duty of £6,000 on average.

Stamp Duty rises amount to 11 months net income

Stamp Duty rises amount to 11 months net income

Great expectations

It is hoped that the widely anticipated house price growth during 2016 will take some of the sting from the tax increase. Should prices increase at the same rate as in the last five years, the next year will see the cost of additional stamp duty offset.

In the Midlands and the North of England, 16% and 12% of sales are to landlords. What’s more, data from the Countrywide report indicates that the average property purchased in these regions would previously have not faced a stamp duty bill, but will now face a £3,200 tax charge from April.

These changes in stamp duty come as the number of homes available to rent continues to dwindle, with numbers down by 5% year on year.

‘The stamp duty increase will impact landlords’ purchasing power,’ observed Johnny Morris, research director at Countrywide. ‘Many entering the market will be faced with a choice between making a lower offer when buying of having to cover the additional costs themselves, impacting yields.’[1]

Morris went on to say, ‘most landlords view property as a long term investment, on average holding a property for 17 years and larger investors will be exempt from the higher stamp duty rate. This means over the long term the private rented sector will continue to grow, but there’s likely to be a few lumps and bumps along the way as landlords get to grips with and adapt to the changing environment.’[1]

‘It’s unlikely the change to stamp duty will see an immediate impact on rents. Landlords are rarely able to pass on increasing costs to tenants, as rental prices are set by market forces. But if less landlords choose to invest in the sector in the short term, a fall in homes available to rent could put pressure on prices,’ he concluded.[1]

[1] http://www.propertywire.com/news/europe/uk-rental-market-landlords-2015121411312.html

 

Landlords urged to add to portfolio quickly

Published On: December 12, 2015 at 2:15 pm

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Categories: Landlord News

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Buy-to-let landlords have been urged to act quickly to avoid the 3% stamp duty hikes announced by the Chancellor in the Autumn Statement, which come into force on 1st April 2016.

Lender Together said it has already seen record levels of lending since Mr Osborne altered conditions for landlords earlier on in the year. The rise was recorded following the Chancellor’s move to reduce the amount of tax relief property investors are able to claim back on their mortgages.

Increases

The latest upcoming changes have led the lender to urge landlords keen to add to their portfolio to complete their next purchases in Q1 of 2016, or face considerable tax rises.

Mr Osborne is trying to address what he calls, ‘the growing crisis of home ownership,’ in Britain by raising £1bn by 2021, to fund the construction of new homes.

Gary Bailey, sales director at Together said, ‘this is a double-whammy for buy-to-let landlords who feel they’re being penalised for being entrepreneurial. The hike in stamp duty, together with the previous announcement that reduced landlords’ ability to offset mortgage interest costs against rental income, will certainly have a major impact on the buy-to-let market.’[1]

Landlords urged to add to portfolio quickly

Landlords urged to add to portfolio quickly

‘That said, this might well fuel opportunities,’ he continued. ‘For example, we could see a rise in demand for semi-commercial properties, since this latest levy is specifically for residential. Keen property investors will look at the alternatives or will simply build these new costs into their model.’[1]

‘As a lender, we’re likely to see an increase in demand as a result of this announcement. We’ve already seen a significant upturn in lending since the Summer Budget and this is set to increase in Q1 of 2016 as savvy investors aim to avoid the new 3pc levy that will kick in on 1 April 2016,’ he concluded.

[1] http://www.propertyreporter.co.uk/landlords/btl-landlords-must-grasp-window-of-opportunity.html

 

 

 

Best Locations for Buy-to-Let Returns to Change Under New Stamp Duty

Published On: December 8, 2015 at 3:34 pm

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Categories: Finance News

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Best Locations for Buy-to-Let Returns to Change Under New Stamp Duty

Best Locations for Buy-to-Let Returns to Change Under New Stamp Duty

The best areas for buy-to-let returns are likely to change when the new Stamp Duty rules come in from April, warns Countrywide.

Landlords seeking the highest returns will have to look to different parts of the country when they are charged an extra 3% Stamp Duty on new property purchases. Find out more about the change here: /16883-2/

Chief Economist at Countrywide, Fionnuala Earley, states: “The effect of the new Duty will be to effectively increase the price investors pay and hence reduce the yield they achieve. New landlords must do their sums more carefully to make sure returns on investment add up.”

Countrywide’s latest research found that its West Midlands offices sold 16.7% of their properties to buy-to-let investors – the highest proportion for any region in England.

However, some individual cities have reported much larger percentages of their stock bought by landlords. These areas are most likely to see their markets affected more significantly when the Stamp Duty changes are enforced in April.

In Leeds, 41% of all Countrywide’s sales in the 12 months to October were to landlords. In Southampton, the figure was 38% and in Harrow, north London, it was 35%. Plymouth and Calderdale followed at 34%.

Earley adds: “While the region with the highest proportion of investors is the West Midlands, the highest concentrations of investors are spread more widely across the country.”1

Are you expecting to change the locations you search for new properties in when the changes are implemented? Use our Stamp Duty calculator to work out how the price of your next investment will change: /calculator/

1 https://www.landlordtoday.co.uk/breaking-news/2015/12/new-stamp-duty-may-redraw-buy-to-let-investment-map-says-countrywide

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tenant demand grows in Q3

Published On: December 8, 2015 at 11:52 am

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Categories: Property News

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A report from Paragon Mortgages seems to show that tenant demand has risen further during the third quarter of 2015.

The survey of almost 2,000 landlords also showed that rental yields and annual rental income as a percentage of a property value has remained fairly constant throughout 2015.

Increase

Results from the report indicate good news for buy-to-let landlords, with rental yields averaging at 5.6% across the country in Q3. 17% of landlords reported yields between 3% and 4%, with one in ten landlords recording yields of 10% or more.

Yorkshire and the Humber recorded the largest yields in the period with 6.1%, while London reported the lowest with 4.8%. This was surprising considering the capital has the second largest increase in levels of renter demand.

In the East of England, 52% of landlords reported an increase in demand, which was the highest of any area in Q3. This figure dropped to 31% for the North East. Nationally, an average of 41% of landlords said that demand had risen in the period.

This shows a strong annual increase in demand across the country. Demand in the North East has risen from 23% to 31% and in outer London from 42% to 48%.

Tenant demand grows in Q3

Tenant demand grows in Q3

Strong

‘This research shows that yields and tenant demand have remained strong throughout Q3, in common with 2015 overall,’ said John Heron, director of mortgages at Paragon. ‘The figures reflect a steadily improving economic outlook for the UK as a whole and show that, more and more people are actively choosing the flexibility of making a home in the private rented sector.’[1]

‘Yields too have remained stable throughout 2015. Q3’s data shows London and the South East slowing down somewhat, while yields in the region are growing. This represents a welcome rebalancing of the national economy, with some of the heat from London’s economy escaping the M25 and being distributed around the country,’ he added.[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2015/12/tenant-demand-continues-to-grow-in-q3-while-yields-remain-stable