Posts with tag: Buy-to-Let

Stamp Duty has raised £2bn already from investors

Published On: August 25, 2017 at 10:02 am

Tags: Buy-to-Let,landlords,Stamp Duty,tax

New figures from Blick Rothenberg has revealed that to date, The Treasury has so far made around £2bn as a result of the 3% Stamp Duty surcharge on additional homes.

The latest statistics released by HMRC to 31^stJuly 2017 show that the number of property transactions is now 1,204,730 which is largely the same as the figures released two years ago. However, the greater rate of tax on additional properties means that Stamp Duty Land Tax receipts have risen by 20% in the same period. This works out to an extra £2bn in tax.

Stamp Duty

Originally, forecasts estimated the changes would make half as much from the policy between the years 2016-2020.

Robert Pullen, Director at Blick Rothenberg noted: ‘Some of this increase could relate to general property price increases, but it is likely that the majority relates to the changes from 1 April 2016, which added an additional 3% SDLT for purchases of additional residential properties.

Stamp Duty has raised £2bn already from investors

“The policy intention was always stated to be to realign the residential property market to make it fairer for first time buyers. It is becoming clearer, however, that as prices continue to rise the measure has succeeded only in generating extra tax for HMRC as well as a sluggish property market evidenced by the number of property transactions falling. The government will need to urgently consider whether the additional 3% SDLT policy is helping achieve fairness in the property market, or if it is creating more problems than it is solving.’[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2017/8/landlord-tax-raises-2bn-from-buy-to-let-investors

Buy-to-let mortgages defy July slump

Published On: August 22, 2017 at 11:51 am

Author: Em Morley

Categories: Finance News

Tags: Buy-to-Let,mortgage,mortgage sales,sales

The most recent analysis conducted by Equifax Touchstone has revealed that UK mortgage dales fell by £1.8bn in July- a fall of 10.8% on the previous month.

More positively, buy-to-let figures were more resistant to the general decline, falling by only 0.2% (£3.9m) to £2.6bn. Residential sales fell by 12.8% (£1.8bn) to £12.2bn. Overall, mortgage sales for July totalled £14.8bn, up by 10.8% year-on-year.

Falls

All regions of the UK suffered a significant fall in sales during the month. Scotland saw the largest falls of 19.8%, followed by Northern Ireland (-18.5%) and the South East (-15.4%).

Buy-to-let mortgages defy July slump

John Driscoll, Director at Equifax Touchstone, noted: ‘These figures show how volatile the mortgage market can be. Sales have tumbled in July, with every region suffering substantial declines as buyers are put off by continuing political and economic uncertainty, coupled with the worrying gap between inflation and wage growth. These circumstances may be further compounded by the potential for an interest rate hike as early as September, driven by continued pressure on the pound.’

‘On a more optimistic note, mortgage sales are up over 10% year-on-year and a dip in sales for July is not uncommon; however, as the summer period comes to a close, the long-term outlook for the market still remains very unclear.’[1]

[1] http://www.propertyreporter.co.uk/finance/buy-to-let-sales-defy-july-mortgage-slump.html

Where are the best University locations for buy-to-let investment?

Published On: August 21, 2017 at 9:09 am

Author: Em Morley

Categories: Landlord News

Tags: Buy-to-Let,student buy-to-let,students,yields

Interesting new research conducted by online estate agent eMoov.co.uk has assessed the top 50 universities in the UK, in terms of providing the most affordable options for those looking to get a foot on the student buy-to-let ladder.

In addition, the agent looked at which University towns represent the best investment in the long-term, based on the rental yield of a property in that region. Finally, eMoov looked at which lender provides the most affordable options that came in both top 10 tables – offering both an affordable price tag and high rental yield.

Affordability

Within the top 50 universities assessed by the investigation, the average house price is £318,267, with the average stamp duty cost reaching £17,476.

The best university town for making a first-step on the student buy-to-let ladder is Durham, with an average house price of only £102,347 and stamp duty cost of £3,070.

When taking additional stamp duty costs into account, the rest of the top ten locations based on affordability is:

Dundee University – £122,317
Queen’s University, Belfast – £123,961
Glasgow University – £127,317
Nottingham University – £137,376
Swansea University – £144,888
Keele University – £150,198
Lancaster University – £153,630
Sheffield University – £157,045
Derby University – £157,253

Where are the best University locations for buy-to-let investment?

Yields

In terms of rental yields, rather than the initial cost of getting onto the student buy-to-let ladder, the average return was found to be 5.51%. The average yearly rent has reached £15,822.

Nottingham University was found to be the number one buy-to-let option, with an average house price of £133,215 and average annual rent of £11,400. Nottingham offers a rental yield of 8.56%.

The rest of the top ten in terms of yields was found to be:

Leeds University – 7.80%
Queen’s Belfast – 7.50%
Coventry University – 7.43%
Glasgow University – 7.31%
Manchester University – 7.16%
Swansea University – 7.08%
Birmingham University – 6.82%
Aston University – 6.82%
Portsmouth University – 6.59%

For the best of both worlds, Nottingham University, Queen’s Belfast, Glasgow University and Swansea University offer the best investment options for both affordability and yields.

Lucrative

Russell Quirk, founder and CEO of eMoov.co.uk, observed: ‘“Despite the buy-to-let market receiving a bit of a kicking over the last year, it still remains a very lucrative business and one that is only marginally soured by the additional 3% in stamp duty tax.

The presence of a top university nearby is one way of ensuring a consistent stream of income to sweeten the recent changes in buy-to-let dis-incentivization. What’s more, the UK has an abundance of top universities spread far and wide and so it provides a whole host of more affordable options for getting on the buy-to-let ladder, other than the usual go to option of an over inflated London market.

With the likes of Durham, Nottingham and more providing much lower costs for that first foot on the ladder but equally as appealing rental yields, a buy-to-let in a university town can be a very good investment indeed.’[1]

[1] http://www.propertyreporter.co.uk/property/where-are-the-best-towns-and-cities-to-invest-in-student-accommodation.html

Should rental payments be considered to boost credit score?

Published On: August 17, 2017 at 1:05 pm

Author: Em Morley

Categories: Finance News

Tags: Buy-to-Let,credit score,landlords,RLA

An interesting survey of nearly 3,000 buy-to-let landlords, carried out by the Residential Landlords Association, suggests that 61% would back a link between good private tenants and their credit score.

Over six in ten landlords questioned said private tenants who pay their rent on time should receive a boost of their credit score, to make it easier for them to get a foot onto the housing ladder.

Credit Rating

Routinely, credit rating agencies do not consider rental payment history when calculating credit scores. This can make it difficult for them to obtain a mortgage, even when tenants have not fallen behind on their payments.

The Residential Landlords Association believe that including rental payments in this way would make it easier for landlords to gain a better understanding of a would-be tenants’ credit and rental payment history.

Should rental payments be considered to boost credit score?

Alan Ward, chairman of the RLA, noted: ‘With many tenants wanting to buy a house of their own, it is absurd rent payment is not routinely included when undertaking credit checks for mortgage applications.’

‘Moving to such a scheme would help not just tenants, but also landlords by giving them a clearer sense of whether a prospective tenant has historically paid their rent in full and on time.’[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2017/8/paying-rent-in-full-and-on-time-should-boost-a-tenants-credit-score-says-rla

Buy-to-let mortgage rates are falling

Published On: August 16, 2017 at 8:51 am

Author: Em Morley

Categories: Finance News

Tags: Buy-to-Let,buy-to-let mortgage,landlords,mortgage rates

Good news for landlords has arrived with the news that buy-to-let mortgage rates are falling, with lenders competing with each other in order to provide the cheapest rates.

Recent figures from Mortgage Brain suggest that there have been further rate and cost reductions on many mainstream products during the last three months.

Falls

Data released by the firm shows that the cost of a two-year fixed buy-to-let purchase for both 60% and 70% LTV products is now 4% than it was in May. This amounts to a saving of £342 for a 60% LTV mortgage and £306 for a 70% LTV mortgage.

In addition, 60% and 70% two-year trackers are down by 1% and 2% respectively during the last three months.

A number of longer-term deals are now cheaper, with three and five year fixes at 60% and five-year fixes at 80% LTV, having reduced by 3%.

Buy-to-let mortgage rates of falling

Favourable

Mark Lofthouse, Chief Executive of Mortgage Brain, noted: ‘Despite the forthcoming changes to buy-to-let lending, the outlook for investors at the moment is extremely favourable with buy-to-let mortgage costs coming down yet again.’

‘With changes afoot, however, this could soon change and it will be interesting to see how the buy-to-let story unfolds over the next three months,’ he added.[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2017/8/boost-for-landlords-as-buy-to-let-mortgage-rates-fall

Rental growth in London rises for first time in 8 months

Published On: August 14, 2017 at 9:05 am

Author: Em Morley

Categories: Property News

Tags: Buy-to-Let,landlords,London rental growth,rents

The most recent data released from Countrywide has revealed that the run of eight straight months of falling rents came to a halt in July.

Rents in the capital ended the month up by 2.1% on the same period last year, with the number of properties available to rent in the capital falling sharply. Across Britain, the rate of rental growth rose from 1.1% in June to 2.2% in July.

Rental Rises

Rental growth across the South of the country is beginning to rise, with three of the four English regions boasting the quickest rental growth located here, namely the South West, South East and Greater London.

Across Britain, the number of homes to rent rose by 4% year-on-year. However, the rate of growth slowed in each of the last 10 months. London (-18%), the East of England (-6%) and the South East (-5%) all saw fewer homes on the market than at the same period last year.

In April 2016, when Stamp Duty surcharges of 3% were added on buy-to-let and second homes, the number of homes on the market in Britain was 14% greater than in the previous 12 months.

Rental growth in London rises for first time in 8 months

Capital Pains

A steady fall in the number of properties available to rent in London has been driven by a drop in the number of landlords purchasing since the Stamp Duty changes came into force.

July saw the proportion of London homes purchased by landlords fall to their slowest rates for seven years. Only 10.5% of the homes sold in the capital last month were bought by a landlord – the lowest figure since August 2010.

The drop in the number of homes to rent in London has not been matched by a decline in tenant numbers. The number of would-be renters in the capital was unchanged from last year, meaning that a similar proportion of renters were in fact chasing less homes.

Falling

Johnny Morris, Research Director at Countrywide, observed: ‘The rush to beat higher stamp duty rates in April 2016 caused a spike in the number of homes to rent, but that has now worked its way through the market. The stock of homes to rent is now falling in the more expensive parts of the country because higher tax rates have dissuaded large numbers of landlords from buying. Ultimately this means fewer homes on the market and higher rents.’

‘Across the Midlands and the North, higher rates of stamp duty are much less of a disincentive to investors. Here the number of homes on the market remains up on last year, buoyed by investors living in London and the South East choosing to buy in the Midlands and the North.’[1]

[1] http://www.propertyreporter.co.uk/landlords/rental-growth-up-in-the-capital-for-first-time-in-eight-months.html