Posts with tag: landlords

Location still important to homebuyers

Published On: February 3, 2016 at 10:02 am

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New research has underlined the importance of location (location, location) to would-be homebuyers.

An investigation conducted by My Home Move shows that over half of UK people make an offer on a home as they are smitten by its location. The property’s price and size of garden made up the top three features likely to sway potential buyers.

Homely

My Home Move’s report shows that 58% of respondents cited location as the top feature for making an offer. 37% said it was down to price and 29% said it was the garden.

Just 9% said that moving closer to friends was their main consideration when making a bid for a new home.

In terms of location, 40% said living near transport links was important, while 35% wanted a green area nearby. 32% said they wanted a property near to cafes, shops, bars and restaurants.

Characteristics

Women were found to be most likely to base their decision on being close to family, with 32% stating this was the case, in comparison to 26% of men.

Those in their 20’s said having a school in close proximity, and being in an up and coming area were important, both accounting for 34% of replies. This would suggest that the younger age group are looking to plan ahead.

However, location was also found to be the factor that puts most people off purchasing a home. 43% said a property in a poor location would put them off, with 40% deterred by price and 34% by the appearance of a property.

Homebuyers between the ages of 21-30 were less likely to be put off by location, with 37% citing that it would stop them from buying.

Location still important to homebuyers

Location still important to homebuyers

Key Ingredient

‘For most people, location is the secret ingredient that makes them fall in or out of love with their home,’ observed Doug Crawford, chief executive officer of My Home Move. ‘People also love a bargain, which explains why cost was the second most important factor in making someone fall in love with their home.’[1]

‘As house prices continue to climb and many first time buyers struggle to take their first step onto the property ladder, younger buyers are more willing to scout out up and coming areas to try and find a bargain to fall in love with,’ he continued.[1]

Concluding, Mr Crawford said, ‘unfortunately, not all of those buying a home have the flexibility to pick and choose their ideal location or perfect interiors, especially as demand continues to outstrip supply, Compromise may have to become the buzz word of 2016, as there is little to suggest the situation is likely to ease any time soon as more and more homeowners chase after one propert

[1] http://www.propertywire.com/news/europe/uk-home-buying-location-2016020211512.html

 

 

 

Consumer group slams stamp duty proposals

Published On: February 2, 2016 at 12:52 pm

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Categories: Finance News

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A consumer group which supports the notion of a stamp duty charge of second homes and buy-to-let accommodation has moved to brand the Government’s upcoming proposals as ‘dangerously flawed.’

The HomOwners Alliance has said it is open to policy on second homes, but that the forthcoming changes in legislation are, ‘so flawed that the Government must go back to the drawing board.’

Assistance

In principle, the group said it welcomes the Government’s ambition to assist home owners and recognition of home ownership in the stamp duty system.

However, in its submission to the Treasury consultation regarding the surcharge, the HomeOwners Alliance said that the way the plans have been introduced as over-complicated and flawed. As a result, the group claims that there will be huge consequences.

Consumer group slams stamp duty proposals

Consumer group slams stamp duty proposals

Ridiculous

Chief executive of the HomeOwners Alliance, Paula Higgins, said that the scheme envisaged by Chancellor Osborne is, ‘ridiculously complex,’ and may damage the people it is intended to assist.

Higgins said, ‘we are already being contacted by distressed homeowners who have worked out they will be caught by it and not be able to buy the home they want to. Rather than push ahead with a well-intentioned but dangerously flawed scheme, it should go back to the drawing board and put it right.’[1]

As means of a consultation response, the HomeOwners Alliance called on a simpler system than the one proposed by the Government.

‘It is really simple-no one should pay the stamp duty surcharge if they are going to buy a home to live in and homeowners need confidence that will be the case. However, if you are buying a residential property for any other purpose, you should pay the surcharge,’ Higgins concluded.[1]

[1] https://www.estateagenttoday.co.uk/breaking-news/2016/1/consumer-group-hits-out-at-dangerously-flawed-stamp-duty-surcharge

 

 

 

Demand for rental homes to pass 1 million in 5 years

Published On: February 2, 2016 at 11:45 am

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More analysis of the rental market, this time from real estate advisor Savills, has found that demand for rental accommodation could rise by more than one million households over the next five years.

This will come as a blow to the Government, which has set of target of building 400,000 affordable properties over the course of the Parliament. If the predictions are true, the firm says that there will need to be a further 220,000 homes for rent per annum.

Changes

Upcoming changes in legislation for landlords will see demand for accommodation slow, but Savills still predict that the sector will grow by 1.1m households by 2021.

The steady economic recovery and record low interest rates have still not stemmed the tide of demand for rental property. In fact, house price inflation pushing ahead of wage growth has served to move homeownership even further out of reach for many. This comes at a time when social housing stock has dipped by 2.8% in the last five years, meaning more households have been forced back into privately rented accommodation.

According to the latest English Housing Survey, private renting has grown by a huge 17,500 households per month in the decade to 2014. The Government hope that their policies, including Shared Ownership schemes and Right to Buy/Help to Buy will reverse this spiral, by helping more people access the property ladder.

Demand for rental homes to pass 1 million in 5 years

Demand for rental homes to pass 1 million in 5 years

Sharp rises

‘Demand for rented homes could still rise more sharply than we have forecast,’ noted Susan Emmett, director Savills residential research. ‘We would question whether policies can accelerate housebuilding enough to see the Government’s target of 400,000 affordable homes for sale reached in the timescale set. And given the overlap between the different schemes, each focused at similar parts of the market, it is possible that one scheme could simply replace the other rather than providing additional homes.’[1]

‘This analysis demonstrates that we still need to provide a substantial number of homes for rent. Government policy should focus on supporting the development of new homes to rent as well as to buy,’ she continued.[1]

[1] http://www.propertyreporter.co.uk/landlords/demand-for-rented-homes-to-swell-by-over-a-million.html

Residential Rents In UK Rise By 2.5% in 2015

Published On: February 1, 2016 at 12:51 pm

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The latest data released by the Office of National Statistics indicates that private rental prices paid by tenants in the UK increased by 2.5% in the year to December 2015.

Prices increased by 2.7% in England, 0.7% in Wales and in 0.9% in Scotland. In London, prices increased by 3.9%.

English Increase

More detailed figures from the report show that since January 2011, rental prices in England have risen more than those in both Wales and Scotland. Indeed, the annual rate changes recorded in Wales continue to be less than the average for Great Britain.

Since the start of 2012, English rental prices have shown yearly increases of between 1.4% and 3%. In the 12 months to December 2015, rental prices rose in each of the nine regions of England. Unsurprisingly, the largest rises were in London, followed by the East and South East with 2.8%. Rental prices in the capital have been stronger than those recorded in the rest of England since 2010.

Overall, the rental market in the country showed signs of continued strength in the final quarter of 2015, with prices increasing 2.5% in the year to December. However, this was a slowdown of 0.2% in comparison to figures released at the end of quarter three.

Residential Rents In UK Rise By 2.5% in 2015

Residential Rents In UK Rise By 2.5% in 2015

Slows

This slowdown can be attributed in part to Scotland, where prices increased just 0.9% in the year to December 2015, a fall of 0.7% compared to the annual growth rate in September.

Additionally, conditions in the housing market in general may have had an effect on the rental market. House price growth has typically been greater than rental rises for a number of years.

Demand however remains high, with statistics released by RICS indicating that those interested in renting accommodation rose again in the three months to December. However, new landlord instructions fell.

Right To Rent rolls out nationally TODAY

Published On: February 1, 2016 at 10:14 am

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Categories: Landlord News

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Today sees the Right To Rent scheme roll out across the whole of England.

Landlords are now required to check the immigration status of all new tenants before agreeing a tenancy, with fines of up to £3,000 for those who rent to someone without the right to live in the UK.

Criticism

The scheme has received plenty of criticism and has already seen problems during its trial period in some parts of the West Midlands.

As the scheme launches nationally, the Residential Landlords Association claims that 90% of landlords have not been given any information from the Government on their new obligations.

In its survey of more than 1,500 landlords, the RLA found that a lack of correspondence from the Government is leading to widespread confusion on how the checks are to be carried out.

Responsibilities

72% of respondents to the survey said they do not understand their responsibilities under the scheme. As a result, many are likely to refuse accommodation to those who cannot easily prove their right to live in Britain.

44% said that they would only rent to those who were in possession of documents familiar to them. This is likely to cause huge concerns to the estimated 17% of UK nationals without a passport.

The RLA is calling for a more thorough investigation of the pilot scheme, which noted that there was only, ‘limited evidence,’ that it was putting off illegal immigrants from attempting to access rental housing.

Dr David Smith, Policy Director for the RLA, observed, ‘the Government argues that its right to rent plans form part of a package to make the UK a more hostile environment for illegal immigrants. The evidence shows that it is creating a more hostile environment for good landlords and legitimate tenants.’[1]

Right To Rent rolls out nationally TODAY

Right To Rent rolls out nationally TODAY

Difficulties

Smith feels that, ‘landlords are damned if they do and damned if they don’t. Fearful of a fine they face two difficult ways forward. They can play it safe and take a restrictive view with prospective tenants, potentially causing difficulties for the 12 million UK citizens without a passport. Alternatively, they may target certain individuals to conduct the checks, opening themselves up to accusations of racism.’[1]

‘The Government’s own evaluation of its pilot scheme noted that there was only limited evidence that the policy is achieving its objectives. Given the considerable problems it will create for tenant-landlord relations it’s time for the Government to think again,’ Smith added.[1]

Penalties

Figures obtained from the Home Office by law firm Simpson Millar indicate that just nine civil penalties were served to landlords under the Right to Rent pilot scheme, between 1 December 2014 and 19 November 2015.

‘Given that the pilot covered an area with more than 2 million people it is hard to see how the scheme has had any significant financial impact at all, ‘said Sumita Gupta, head of immigration at Simpson Millar in Manchester. ‘Rather, it has the potential to create a culture of fear and discrimination.’[1]

Concluding, Millar said, ‘there will be rogue landlords who won’t care about undertaking the required document checks; they could view this new scheme as an opportunity to exploit a very vulnerable group of people who might otherwise find it difficult to secure accommodation and end up homeless

[1] https://www.landlordtoday.co.uk/breaking-news/2016/2/right-to-rent-goes-live

Buy-to-let remains attractive, according to broker

Published On: January 30, 2016 at 11:48 am

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Categories: Landlord News

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A leading mortgage broker has recently performed a detailed analysis of the buy-to-let sector and has concluded that investment in the market is still an attractive proposition.

Private Finance also noted that accessing necessary finance will prove to be the greatest challenge for amateur landlords looking to enter the sector.

Changes

The firm’s analysis accounted for the upcoming changes to the market, such as the reduction of higher rate tax relief and hikes in stamp duty, alongside the impact on house prices and yields.

In addition, the broker looked at the impact of the European Mortgage Credit Derivative and found that whilst these factors might have a negative impact, they are most unlikely to harm to market as a whole.

As part of its analysis model, Private Finance used an average buy-to-let situation in a typical town. The findings show that a potential 62% return on capital could well be an achievable goal. This is on the basis that the investment is held for at least five years, utilising a fixed-rate mortgage at 3.6% for the duration.

Buy-to-let remains attractive, according to broker

Buy-to-let remains attractive, according to broker

Conservative

A number of industry commentators have noted that annual capital appreciation of up to 5% is achievable in some areas. However, Simon Checkley, managing director of Private Finance believes that a buy-to-let investment remains viable at a smaller rate of appreciation.

Checkley said that, ‘of course, these figures assume the full extent of the tax relief reduction and stamp duty hike so the short term returns could look more attractive if you are able to take immediate action and complete a purchase before 1 April 2016 when the increased stamp duty will appear.’[1]

‘We are not underestimating the impact of the loss of higher rate tax relief of the increase of stamp duty on the market. What we are saying is that they are not necessarily deal brokers. There have been many protestations in recent weeks from concerned landlords as a result of the planned tax changes. What is less commonly recognised is that are still opportunities in this market if an investor makes a sound purchase subject to other underlying economic factors, ‘he continued.[1]

Concluding, Checkley said that, ‘understandably, many landlords are claiming they will lose considerable sums of money as a result of these changes. However this does beg the question of the true viability of their original investment.’[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2016/1/buy-to-let-still-attractive-according-to-broker