Posts with tag: Buy-to-Let

Buy-to-let rates slow, but products increase

Published On: August 1, 2017 at 8:41 am

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New research from Moneyfacts indicates that the average two-year fixed buy-to-let rate has slipped by 0.31% in the last year. However, it is only down by 1 basis point in 2017, from 2.92% in January to 2.91% in July.

Despite the slow pace of decline in recent months, the market has now recovered from the significant fall in products evident at the beginning of the year.

Indeed, the number of products now available on the market has increased from 1,408 at the beginning of the year, to 1,610 today.

Bolstered

Charlotte Nelson, Finance Expert at MoneyFacts, observed: ‘The BTL market has seen some turbulent times, with significant tax changes, tougher affordability rules and more changes to come into force in September. It is little wonder many thought the BTL mortgage market might show signs of strain. And yet, rates have continued on a downward path. Since the introduction of new regulation in January, however, the pace of the reductions has slowed considerably.’

‘Product numbers have been bolstered since the dramatic fall that occurred in January, giving landlords looking for a mortgage deal today more choice. This shows that after the initial shock of the changes in January, providers are keen to recover and keep the market buoyant,’ she continued.[1]

Buy-to-let rates slow, but products increase

Buy-to-let rates slow, but products increase

Nelson went on to say that providers are beginning to gear up for more legislation changes, levied by the Prudential Regulation Authority.

‘Providers are now starting to gear up for further regulatory changes. From 30 September, lenders will have to apply stricter standards for landlords with four or more properties. Given that 89% of the mortgage deals on the market today are available for borrowers with four or more properties in their portfolio, these changes will affect a large chunk of the market.’

‘Faced with these changes, it is likely that competition among providers may start to ebb initially, with the providers instead focusing on their core range and getting their criteria up to date. With the added uncertainty in the economy, landlords looking for a mortgage deal are likely to face a bumpy road for a while. Anyone unsure of their options should seek out independent financial advice,’ she concluded.[1]

[1] http://www.propertyreporter.co.uk/finance/buy-to-let-rates-plateau-but-products-soar-ahead-of-pra-changes.html

 

Sharp rise in buy-to-let investment in UK hotels

Published On: July 28, 2017 at 9:37 am

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Categories: Landlord News

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Buy-to-let investors are being driven to invest in UK seaside hotels, according to an interesting new report from Property Frontiers.

Returns of around 10% are proving a draw to many investors, moving away from more traditional buy-to-let.

Seaside Visitors

Britain enjoyed record visitor numbers during 2016, with Visit Britain reporting 37.6 million visitors during the course of the year. This represented a rise of 4.14% on 2015.

Figures from travel marketing company Sojern suggests that there has been a 23.8% rise in the number of Brits planning a UK break for 2017. Brexit is thought to be a key influencing factor on many families’ decisions to stay in Britain.

As a result of this, hotel investment in the UK is forecasted to grow by 28% in 2017.

Sharp rise in buy-to-let investment in UK hotels

Sharp rise in buy-to-let investment in UK hotels

Brexit

The pound has recovered somewhat since the result of the EU referendum, but it is still struggling, remaining 16% lower against the dollar and 14% lower against the Euro than before the vote.

Savvy investors are taking advantage of this to increase their stock of UK hotel rooms, with sizeable returns tempting many.

Savills reports that investment in UK hotels has already hit £2bn during the opening half of 2017. Should projections from the firm prove correct, investment for the whole year will reach £5.1bn – a rise of 28% from 2016.

Ray Withers, CEO of Property Frontiers, observed: ‘UK hotel rooms are hot property right now when it comes to investments that offer impressive returns. They outshine buy-to-let in several ways – there’s no stamp duty, no buy-to-let tax issues and a comparatively low entry point. For investors from overseas, there’s also the ongoing favourable exchange rate, with the pound not yet fully recovering from the UK’s decision to leave the EU.’[1]

[1] http://www.propertyreporter.co.uk/property/oh-we-do-like-to-invest-beside-the-seaside.html

 

 

Landlords’ concerns and positives outlined in new survey

Published On: July 27, 2017 at 1:43 pm

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Categories: Landlord News

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Interesting new research has revealed that Brexit is no longer the top concern for British landlords, with taxation and economic uncertainty now more pressing worries.

Other features causing investors sleepless nights include regulation and increased competition, according to new data released by Direct Line for Business.

Landlord Concerns

Taxation and economic uncertainty came out on top in the list of top landlord worries, both accounting for 41% of responses.

Investors concerned about unwittingly breaking legislation and ending up on the wrong side of the law made up 40%. In addition, landlords concerned about the rate of inflation accounted for the same percentage.

The top 5 concerns highlighted by landlords in the report were:

Factor % Negative impact
Taxation 41 %
Economic uncertainty 41 %
Inflation 40 %
Regulation 40 %
Competition bringing rental process down 38 %
Landlords' concerns and positives outlined in new survey

Landlords’ concerns and positives outlined in new survey


Positives

On the other hand, landlords were found to be most positive about the prospect of increasing house prices. In addition, demand for rental accommodation, interest rates and surprisingly, the triggering of article 50 were also found to be positive for landlords.

The table below indicates the top 5 short-term positives for landlords:

Factor % Positive impact
House prices 31 %
Interest rates 29 %
Domestic demand for rental properties 28 %
Brexit / Triggering Article 50 28 %
Foreign demand for UK rental properties 27 %

Christina Dimitrov, Business Manager at Direct Line for Business, observed: ‘It’s great to see landlord’s being resilient towards the ever-changing property marketplace and it’s really positive to hear they don’t appear to be worried about Brexit and the impact on demand.’

‘The continued low interest rate environment can only benefit landlords and tenants. However, experts are predicting an interest rate rise in the future and the Prudential Regulation Authority’s tougher underwriting rules for buy-to-let mortgage lenders may bring some challenges for landlords wanting to expand their portfolios.’[1]

 

[1] http://www.propertyreporter.co.uk/landlords/landlords-reveal-their-biggest-fears-in-new-survey.html

 

 

Nearly one in five MPs are landlords

Published On: July 24, 2017 at 11:39 am

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Interesting new research has revealed that nearly one-fifth of MPs are landlords.

Some of the 123 MPs that have invested in property include chancellor Philip Hammond, Boris Johnson, Emily Thornberry and Speaker of the House of Commons, John Bercow.

MP Landlords

The research was conducted by Channel 4’s FactCheck, with the issue of landlord MPs coming to prominence again in the wake of the Grenfall Tower tragedy.

Some critics suggest that those who have a financial stake in the private rental sector could have a conflict of interest when it comes to making important decisions.

During the last Parliament, a law that would require private landlords to make their properties, ‘fit for human habitation’ was rejected by 312 votes to 219. However, it transpired that 72 of the MPs that voted against the Private Members Bill were landlords themselves.

Laura Pidcok MP told the press that, in her opinion, ‘anyone who is a landlord should not be able to vote on legislation affecting landlords,’ as, ‘it is a complete conflict of interest.’[1]

‘The people of Grenfall Tower have had their concerns repeatedly ignored and it is part of our long history as working class people to have our concerns ignored,’ she added.[1]

view of the city life with the big ben as background

Nearly one in five landlords are MPs

Conflicts

A FactCheck statement said: ‘Clearly, there is the potential for a conflict of interests. MP landlords can vote on housing legislation, speak in debates and hold ministerial positions, so long as they declare their interests. But are MPs actually swayed by their financial affairs in any sizeable numbers? Putting figures to this is incredibly hard.’[3]

[1] https://www.landlordtoday.co.uk/breaking-news/2017/7/almost-a-fifth-of-mps-are-landlords

 

NLA concerned about number of people investing for retirement

Published On: July 24, 2017 at 8:49 am

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It has been suggested that the recent alterations to the way that buy-to-let properties in the UK are taxed could lead to a pension crisis, with individuals becoming too reliant on property to fund their retirement.

The National Landlords Association warns that 77% of landlords, equating to roughly 1.8 million, are reliant on their buy-to-let investment in order to fund their retirement.

Retirement Planning

Findings from recent consumer market research from Mintel indicate that buy-to-let is still a safe way to save for retirement years, with 68% of people of this opinion.

This said, figures from the Office for National Statistics suggest that the average retired household spends £21,770 each year. This leaves a shortfall of over £15,000 after taking the full basic state pension of £6,359.60 into consideration.

In order for this shortfall to be made up, one would require savings of around £300,000. The National Landlords Association feel that this is why so many people are turning to property.

Richard Lambert, Chief Executive Officer of the National Landlords Association, observed: ‘As a consequence of government policy over recent decades almost two million people are reliant on their property to fund their later years. But the changing tax regime will substantially reduce the income they receive from these investments and so compromise the retirement plans of a significant number of hard working people.’[1]

NLA concerned about number of people investing for retirement

NLA concerned about number of people investing for retirement

Retiree Landlords

Mr Lambert went on to say: ‘Some 27% of UK landlords are already retired and 37% are aged 55 or over, so there is a pressing need to tackle these issues without delay.’[1]

As a result, the National Landlords Association is calling on the Government to assist those affected to adjust their financial plans by tapering the total amount of capital gains tax landlords pay when selling their property. This, the NLA hopes, will be based on how long they have owned and let their property out for.

Lambert explained: ‘Landlords who have invested in residential property for the long term are different from short term speculators who buy and develop properties, and this should be recognised when it comes to how much capital gains tax they pay when they decide to sell.’[1]

‘It is not always in the best interests for landlords to continue to manage residential property into later life. A capital gains relief like we propose would provide an incentive to sell, allowing people to sell poorly performing properties and potentially purchase an annuity or invest in more liquid, lower risk assets to fund their retirement instead,’ he concluded.[1]

[1] http://www.propertywire.com/news/uk/uk-landlords-body-voices-concerned-number-relying-buy-let-retirement/

Landlords remain confident over future of sector

Published On: July 21, 2017 at 8:56 am

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Categories: Landlord News

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A high-number of landlords remain confident about the future of the buy-to-let sector, despite recent tax alterations impacting on the market.

57% of landlords have not changed their view on the future of the sector, despite cuts to mortgage interest tax relief and alterations to stamp duty, according to research from buy-to-let investment platform Property Partner.

Investment

The survey discovered that many landlords seeking to minimise risks choose to invest in property, as they feel long-term trends will continue. They are hopeful that property prices will remain resilient despite economic and political upheaval.

Despite this bullishness surrounding property investment, experts at Property Partner expressed their surprise at how few investors are actually diversifying into property.

Only 19% of investors see property as a good way of diversifying their assets and only one in ten would-be landlords see investing in property is simple. 51% said that they were deterred by the thought of having to manage tenants.

Landlords remain confident over future of sector

Landlords remain confident over future of sector

Confidence

Dan Gandesha, founder at CEO at Property Partner, observed: ‘This research underscores the confidence being shown in the buy-to-let sector across the UK. It really highlights that, despite efforts to increase the tax-take from landlords, investors continue to be bullish and see property as a secure, long term investment.’[1]

‘With no end in sight to the acute shortage in housing stock, there is an inevitability to the continuing upward pressure on prices. In the long-term, prices are expected to rise faster than the rate of inflation, economic growth and wages, despite recent political uncertainty,’ Mr Gandesha added.[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2017/7/landlord-confidence-bullish-despite-higher-buy-to-let-taxes