Posts with tag: commercial landlords

Residential Landlords Moving Away from Traditional Buy-to-Let

Published On: May 10, 2016 at 8:27 am

Tags: commercial landlords,commercial property,residential landlords,Stamp Duty

An increasing number of residential landlords are moving away from traditional buy-to-let and investing in property types with a more favourable tax condition, according to Clever Lending.

The master broker has seen a rise in landlords investing in retail units and small commercial developments, rather than rental properties.

Residential Landlords Moving Away from Traditional Buy-to-Let

Clever reports that many property investors are leaving the traditional buy-to-let market, choosing instead to invest in commercial units, which are not subject to the 3% Stamp Duty surcharge.

As of 1^st April, buy-to-let landlords and second homebuyers are now charged an extra 3% in Stamp Duty.

Ahead of the Stamp Duty deadline, a rush of landlords flooded the property market in order to expand their portfolios. However, it now appears that many are choosing to invest in different sectors.

Clever Lending also reports that with permitted development rights being made permanent and relaxed rates on business and retail units, more residential landlords are now considering purchasing commercial property.

The Sales and Operations Manager at Clever Lending, Sonny Gosai, believes that tax reforms for commercial property have put a focus on small to medium sized investment opportunities.

With a 0% band up to £150,000 and just 2% up to £250,000, residential landlords are now applying for finance for this type of investment as an alternative way to expand their existing property portfolio.

Gosai explains: “The Chancellor’s increases on buy-to-let taxation and the relaxation of tax on other property types has resulted in a shift of focus for the entrepreneurial landlord. Becoming a commercial landlord has some distinct advantages over the residential sector and it may not be that big a step if the property is a mix of retail and residential. Industrial and office units can also be acquired to grow a portfolio on terms that may be more beneficial with higher income and asset value.

“We’re still seeing the post-Budget market evolve, but the trends are starting to appear and it’s an exciting time in commercial bridging finance.”¹

Are you thinking of investing in the commercial property market?

¹https://www.landlordtoday.co.uk/breaking-news/2016/5/landlords-eye-commercial-deals

Landlords urged to let out empty shops

Published On: February 8, 2013 at 9:23 am

Author: Em Morley

Categories: Property News

Tags: commercial landlords,rent arrears

On the whole, it can be said that commercial landlords have had a difficult year. A rising number of high-street shops have entered administration and some landlords have experienced rent arrears.

A growing number of landlords are now relying on their unoccupied property insurance to get them through financially while they look for another tenant. With this in mind, the chief executive of a town business group has said that landlords and letting agents can do more to find new inhabitants.

More effort

Mark Cordell from Bid4Bury has ordered Edmundsbury Borough Council to meet with landlords within the community in order to persuade them to fill their empty commercial properties. Mr Cordell highlighted one particular unit that has been empty for over 12 months. He said that the unit, ‘costs £48,000 a year in rent and £28,000 in business rates. You have to be making at least £100, 000 before you can make that work.’[1]

Cordell says that figures such as these suggest that commercial landlords, ‘need a reality check.’ He goes on to say, ‘the council, the landlords and the agents need to work harder to get these units back in use. At the moment there seems to be a policy of let’s sit and hope for the best. I am not comfortable doing that.’

Landlords urged to let out empty shops

Argument

Commercial landlords however can argue that by reducing their rent prices, they will lose a substantial part of their income. With unoccupied property insurance covering void periods, some landlords feel that there is no reason to actively seek new buyers.

Cordell argues that large empty commercial properties are an eyesore and makes towns unattractive to suitors and warns the situation can easily get worse. He said that, ‘they(visitors) feel that part of the town is run down. It then becomes difficult to attract new tenants here. That is our Achilles heel.’[1]

Solutions

Mr Cordell said that a possible solution could be for commercial landlords to let out their unoccupied properties for a short-term basis, suggesting they become pop-up shops. This, Cordell believes, will generate landlords some income, improve the image of a town and defy the risk of defaults on long-term arrangements. In addition, he says that shops should consider doing more themselves, like staying open later in the evenings or opening later on Sundays

[1] http://www.justlandlords.co.uk/news/Landlords-urged-to-find-new-Tenants-for-Empty-Shops-1625.html

Government Proposes Changes to Bailiffs

Published On: February 1, 2013 at 5:09 pm

Author: Em Morley

Categories: Property News

Tags: bailiff regulations,commercial landlords

The Government has proposed changes to the regulations of bailiffs, meaning that they will no longer be able to visit properties late at night to take debts, and will have tighter regulations regarding the type of property that they can seize.

Additionally, bailiffs will no longer be permitted to enter a property if just children are present, and they will not be able to set their own fees. Some landlords are worried about one of the new rules: that they will have to alert their tenants seven days before sending bailiffs.

Government Proposes Changes to Bailiffs

The new plans will give tenants an opportunity to pay their debts before bailiffs arrive, says a spokesperson for the Ministry of Justice. They say: “If the landlord believes the debtor is likely to avoid enforcement, for a small fee, they can apply to the court to reduce or waive this notice period.

“Commercial landlords will now have to serve a notice of enforcement on the tenant, giving the tenant the benefit of seven day warning before bailiffs can turn up.

“The short, sharp shock of distress will therefore be lost and will enable tenants to remove goods from the property. The court can reduce the period of notice if there is concern that the tenant will avoid enforcement if given too much notice, but this will increase the landlord’s legal costs.

“In the current distressed market, these changes will force commercial landlords to consider more expensive routes of recovery such as litigation or insolvency.”¹

Normally, a landlord can call bailiffs if their tenant constantly does not pay rent, to collect possessions as payment. The new rules may allow tenants to hide their possessions before bailiffs arrive, however. This would leave landlords without income if they do not have rent guarantee insurance.

Leeds law firm Clarion’s’ Paul Burkinshaw says: “One of the primary concerns is that the tenant may take steps to dispose of stocks that the landlord is aware exist during that period of notice, so preventing seizure of the same.

“In the draft regulation, mechanisms did exist for steps to be taken more quickly, however this would simply add cost to the landlord who is already inappropriately out of pocket.”1

¹http://www.justlandlords.co.uk/news/Landlords-wary-of-new-Bailiff-Regulations-1614.html