Written By Em

Em Morley

‘No evidence’ as to why Welsh tenants should pay letting fees

Published On: August 22, 2017 at 11:05 am

Tags: letting agent fees,letting fees,tenants,Wales

The Welsh Government has stated that buy-to-let landlords should be responsible for paying letting agent fees in the country. This comes despite concerns that any such move will lead to higher rents, as landlords seek to pass on any costs, according to the Welsh Government.

A report from the Government claims that there is ‘no compelling evidence’ for tenants to pay letting agent fees or renewal costs upfront. This is because, ‘the large majority of the work undertaken by agents is work that the landlord would otherwise be doing themselves.’

Service

In addition, the report acknowledges that ‘referencing tenants is a service to landlords, not tenants’ and there is, ‘work involved for agents setting up a new tenancy.’ It is also argued that they, ‘do not generally make excessive profits on set up fees in relation to costs incurred.’

The report went on to say: ‘Inventories and tenancy agreements do protect both parties from false accusations, but it is soon to be a legal obligation on the landlord to provide a tenancy agreement, and therefore it is a service to the landlord to do this job for them.’

‘Arranging viewings and advertising a property are also a service to landlords, just as a job advert 60 is paid for by the employer, and estate agents charge sellers, not buyers, to advertise their home.’[1]

‘No evidence’ as to why Welsh tenants should ban letting fees

Consultation

Just last month, the Welsh Government launched a consultation on banning fees to tenants, following an announcement that it will be taking action in order to prevent unfair fees.

This consultation looks to seek views on the nature and level of fees being charged to tenants. Alongside looking if these fees are justifiable, it also looks to gather information on fees paid by landlords to agents and any consequences of proposed bans.

[1] https://www.landlordtoday.co.uk/breaking-news/2017/8/no-compelling-evidence-as-to-why-tenants-should-pay-letting-fees

Confidence in Property Market Appears to Pick Up Following Rise in Sales

Published On: August 22, 2017 at 9:37 am

Author: Em Morley

Categories: Property News

Tags: mortgages,property market,property sales

Confidence in Property Market Appears to Pick Up Following Rise in Sales

The latest property transactions data from HM Revenue & Customs (HMRC) suggests that confidence in the property market has started to pick up again, following a rise in sales.

The provisional seasonally adjusted UK property transaction count for July 2017 was 104,760 residential and 11,750 non-residential sales.

The seasonally adjusted estimate of the number of residential property transactions in July rose by 1.3% on June’s figure. On an annual basis, the seasonally adjusted figure is 8.3% higher than in July 2016, but around the same level as in the previous year.

HMRC warns that caution should be used when making comparisons of transactions between July 2017 and July 2016, as some taxpayers may have changed their behaviour as they considered the results of the General Election and last year’s EU referendum.

For July, the number of non-adjusted residential transactions was around 10.3% lower than in June. Year-on-year, it was 1.4% higher than in July last year.

HMRC notes that the figures for the three most recent months are provisional and are therefore subject to revision.

Its estimate on the number of transactions in June 2017 has increased since its last publication; there is always some uncertainty around its estimates for the most recent month, due to the fact that purchasers have 30 days from the date of completion to inform HMRC.

The CEO of specialist loans trader Enra, Danny Waters, comments on the latest statistics: “After three consecutive falls, it’s encouraging to see property transactions start to pick up again. The political and economic upheaval we have seen in recent months has plagued the property sector, so this increase could be an indication that buyers and sellers are beginning to feel more confident.

“While it’s true that certain areas of the property market have had a troubling few months, others have flourished. The bridging sector, for example, has gone from strength to strength in recent months, with the ATSL recently reporting that lending reached £875m in Q2 [the second quarter], up 12.1% from Q1. This is most likely a result of borrowers seeking alternative financing options. What’s important now is that those looking to make a purchase are aware of the range of loans available to them, including the ones that offer the greatest flexibility in such uncertain times.”

Landlords Being Urged to Remortgage Ahead of Tougher Lending Criteria

Published On: August 22, 2017 at 9:04 am

Author: Em Morley

Categories: Landlord News

Tags: mortgages,portfolio landlords,remortgaging,underwriting changes

Landlords are being urged to remortgage ahead of tougher buy-to-let lending criteria due to be introduced in September, which will make it more difficult to obtain finance.

The call arrives as the proportion of buy-to-let remortgage transactions as a share of the total lending market has risen over the last few months, and as a diminishing demand for new buy-to-let loans has driven many lenders to slash their mortgage rates.

Landlords Being Urged to Remortgage Ahead of Tougher Lending Criteria

The National Landlords Association (NLA) says that the rise in remortgages is due to landlords looking to limit their exposure to the new buy-to-let tax regime.

The forthcoming tightening of lending criteria for portfolio landlords is the latest in a series of attempts by the Bank of England’s Prudential Regulation Authority (PRA) to cool the buy-to-let market, following measures introduced earlier this year.

A guide to the PRA’s upcoming changes can be found here: https://www.justlandlords.co.uk/news/portfolio-landlord-underwriting-changes/

The NLA’s most recent Quarterly Landlord Panel shows that landlords are already finding it harder to arrange mortgages, with 43% saying that the process of obtaining finance has become more difficult since the beginning of the year.

Furthermore, more than half (53%) of landlords report that they have had to provide additional evidence to support recent mortgage applications, including tax returns, cash flow forecasts and business plans.

With just over a month before the second phase of the PRA’s underwriting standards is due (30^th September 2017), the NLA is urging any landlords thinking about remortgaging not to wait any longer.

The Head of Policy at the NLA, Chris Norris, says: “Since the PRA regulations were introduced in January, the marketplace is looking considerably more complex. It was always likely that lenders would start to demand more evidence from applicants, and landlords are already feeling they have to go further to prove that they can afford finance.

“Changes to buy-to-let taxation will eat away at many landlords’ profits and make it more challenging for them to manage their businesses. As a result, many are looking to limit their exposure to the changes, which is why we’ve seen a rise in remortgaging.”

He adds: “However, the situation is due to worsen from September and, while it may not be financially advantageous for everyone, if you’re considering remortgaging or expanding your portfolio, then do so now to avoid any further difficulties”.

Case study

Jeff, who has been a landlord for 14 years and has seven properties in Lincolnshire, says it’s becoming harder to get finance, as lenders view him as high-risk.

He explains: “After the 2008 economic crash, my outstanding debt changed the way lenders viewed me and, now, I’m regularly either refused or charged higher rates if I want to take out finance.

“Lending regulations and policy need to be changed in order to incentivise investment in rented housing and return the market to a healthy level. The PRA’s new standards will only make things worse and make it harder for small-scale landlords like me, who are in a position to provide a valuable source of housing”.

Almost one-third of landlords plan on increasing rents

Published On: August 22, 2017 at 8:47 am

Author: Em Morley

Categories: Landlord News

Tags: buy to let investment,landlords,legislation,rents

A rising number of private landlords are looking at plans to increase rents, in order to combat alterations to mortgage interest tax relief.

New research from Cover4LetProperty discovered that 32.5% of landlords are planning to raise rents during the next 12 months. This is in order to keep up with heightened tax liabilities and costs, due to these legislation changes.

Mortgage Interest Tax Relief

In April, alterations to mortgage interest tax relief began to be phased in. The four-year cycle will eventually see landlords only able to deduct 50% of their taxable income generated through their buy-to-let investment.

While rents are set to increase, the research also suggests that most buy-to-let investors are not planning on altering the size of their portfolios. 83% of those asked said they were not looking to either increase or decrease the size of their portfolio in the next year.

Actually, only 14% private investors said they were looking to expand their portfolio within the next 12 months.

Almost one-third of landlords plan on increasing rents

Landlord Happiness

Positively, when landlords were asked how happy they were with their tenants, 93% replied that they were happy. Just 6% said they were 50/50 and 1% said they were unhappy.

Almost half of the respondents also revealed that they are property investors, while the others said that they are accidental landlords, due to features such as inheritance or other circumstances.

Looking to the future, many investors were found to be concerned about further Government legislation changes, alongside increased tax liabilities and ongoing uncertainty surrounding Brexit.

London Estate Agent Offering the Chance to Sell your Property for Free

Published On: August 22, 2017 at 8:06 am

Author: Em Morley

Categories: Property News

Tags: estate agent,London,property sales,selling a property

London Estate Agent Offering the Chance to Sell your Property for Free

As it now costs an average of over £9,000 to sell your property in London, one estate agent is offering you the chance to sell your property for free!

Portico London estate agent has created the Portico Property Quiz to help one lucky winner beat extortionate fees.

Those who enter the quiz and score 80% or higher will automatically be entered into a prize draw, with one lucky person winning a 0% fee and a £100 John Lewis voucher.

The majority of the questions are general property knowledge, from the average time it takes to sell a London property to Stamp Duty calculations to a guess-the-price picture round.

The agent has launched the competition at a time when Londoners have to find an average of £9,244 in estate agent fees to sell their properties. This is a huge 414% more than 20 years ago, when the average estate agent fee in the capital was £1,797.

The Managing Director of Portico, Robert Nichols, says: “Everybody wants a quick and easy property sale. Unfortunately, in this market, the time it takes to sell a home can vary greatly, depending on how you sell it and who you sell it with.

“At Portico, we offer a range of unique services to maximise the sale price achieved, from home staging and free handyman work, to an Airbnb management service that enables vendors to earn until their property sells.”

He adds: “We’re excited to be offering one lucky homeowner the chance to sell for free, potentially saving tens of thousands of pounds in estate agent fees. Fancy yourself a bit of a property expert? Take our quiz! https://www.portico.com/blog/our-news/sell-your-home-for-free!”

The full terms and conditions can be found here: https://www.portico.com/blog/our-news/sell-your-home-for-free-tcs

If you’re looking to sell your property in the capital, we hope that you beat the fees and manage to win this great prize!

Rogue landlords still letting to illegal tenants

Published On: August 21, 2017 at 1:49 pm

Author: Em Morley

Categories: Landlord News

Tags: illegal tenants,immigration,landlords,Right to Rent,rogue landlords

A number of buy-to-let investors who knowing let illegal immigrants to live in their rental properties could be set to face jail.

This is after hundreds of people suspected of not having a right to live in the UK were arrested during a national enforcement operation across Britain.

Operation

Border Force police arrested roughly 200 people as part of their operation, which looks to clamp down on illegal immigration and rogue landlords renting out properties to those without the right to live in the UK.

Activity for Operation Magnify began at the beginning of the year, concluding in June, when police inspected 253 residential properties thought to contain illegal immigrants.

Of the 200 or so people arrested by the force, some had overstayed their visa but many had entered the UK illegally.

Brandon Lewis, Immigration Minister, noted: ‘These operations show that we will not tolerate people living and working illegally in the UK. Illegal working cheats the taxpayer, has a negative impact on the wages of legal workers and allows rogue employers to undercut legitimate businesses.’

Rogue landlords still letting to illegal tenants

‘Those who come to the UK to live and work illegally often arrive with a very different expectation to the situation that they then face. The reality is very different and they will often find themselves at the mercy of exploitative employers or landlords. Those unscrupulous landlords flout the rules by knowingly renting property to illegal migrants as easy source of profit. We are committed to tackling abuse and building an immigration system which works in the best interest of the country.’[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2017/8/rogue-landlords-slammed-for-knowingly-renting-property-to-illegal-migrants