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Em Morley

Valuations Firm Confirms that Landlords are Rushing to Buy

Published On: January 14, 2016 at 9:32 am

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A national surveying and valuations firm has confirmed that landlords are rushing to purchase buy-to-let properties, after predictions that many investors will seek to complete buys before tax changes in April.

Connells Survey & Valuation reported that it conducted a huge 86% more buy-to-let valuations in December than in the same month of the previous year.

Although this figure represents a slight monthly drop of 1%, this is far less than the traditional seasonal declines in other types of valuations, notably for home movers, first time buyers and those remortgaging.

Valuations Firm Confirms that Landlords are Rushing to Buy

Valuations Firm Confirms that Landlords are Rushing to Buy

The Director of the firm, John Bagshaw, comments: “December’s results are a reflection of the ever-increasing demand for homes as investment opportunities, as buy-to-let landlords join home movers seeking to make some sort of profit from their property.”

He adds: “The added factor of the April 1st Stamp Duty increase has spurred many investors who might have been sitting on the fence to take the plunge and enter the buy-to-let market before its profitability takes a hit.”1

From 1st April, buy-to-let investors and second home buyers will be charged an extra 3% in Stamp Duty. In addition, landlords will face cuts to their mortgage interest tax relief and the restrictions applied to the Wear and Tear Allowance. Read more here: /tax-experts-express-confusion-over-new-wear-and-tear-allowance/

As a result, estate agents are forecasting a surge in springtime sales in the buy-to-let sector.

When the tax changes are implemented, they expect the buy-to-let market to slow down, which could potentially boost the number of first time buyers getting onto the property ladder.

The Director of Situ Homes, Oliver Knight, reports: “In 2015, landlords accounted for one in four property sales. After April, we expect this to reduce significantly, perhaps paving the way for more first time buyers to secure a home.”2

Chairman of the Hunters group, John Ozwell, gives his predictions for the midlands: “We are expecting a flurry of investors buying property to let before April because of the changes introduced by the Chancellor in the Autumn Statement. It will be a busy start to the New Year for the property market across the region.

“We expect sales and listings to be running at the same level which we have experienced since last summer, or perhaps slightly up on that.

“2015 was a good year for the midland market. In 2016, property prices are expected to keep rising, by approximately 4% to 5%. There will continue to be shortage of stocks throughout the UK, particularly properties for first time buyers, making the market even more competitive and driving up sales and prices.

“With interest rates forecast to stay low throughout the year – possibly just seeing a small rise – banks and building societies will have even better deals available, again strengthening the market here in the midlands.”2

1 http://www.financialreporter.co.uk/finance-news/annual-housing-market-activity-up-29.html 

2 http://www.propertyreporter.co.uk/property/estate-agents-predict-sales-surge-ahead-of-stamp-duty-rise.html

Conservatives Reject Move to Ensure Rental Homes are Safe

Published On: January 13, 2016 at 3:53 pm

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Conservative MPs have voted against proposals that would have required private landlords to ensure their properties are fit for human habitation.

The Labour amendment to the Government’s Housing and Planning Bill – created to make sure that all rental homes were safe for tenants – was defeated by 312 votes to 219 yesterday, when the bill went through its third reading in the House of Commons.

Conservatives Reject Move to Ensure Rental Homes are Safe

Conservatives Reject Move to Ensure Rental Homes are Safe

The Shadow Housing Minister, Teresa Pearce, who proposed the amendment, stated: “The majority of landlords let property which is and remains in a decent standard. Many landlords go out of their way to ensure that even the slightest safety hazard is sorted quickly and efficiently.

“So it is even more distressing when we see reports of homes which are frankly unfit for human habitation being let, often at obscene prices.”

She added that the condition of some rental properties would not be tolerated in other sectors, noting reports of mould growing.

She asked: “Where else in modern life could someone get away with this? It’s a consumer issue. If I purchased a mobile phone or a computer that didn’t work, didn’t do what it said it would, or was unsafe, I would take it back and get a refund.

“If I purchased food from a shop and it was unsafe to eat, I would not only get a refund but there is a high possibility the shopkeeper could be prosecuted. Yet if I rent from a landlord, perhaps the only available property for me, and it was unsafe to live in, then I can either put up or shut up. In a market where demand outstrips supply, renters lack basic consumer power to bargain for better conditions.”1

The Government has been criticised for trying to rush the Housing and Planning Bill through Parliament – last month it quietly tabled an amendment to the bill that set a maximum of five-year terms for new council home tenancies.

In yesterday’s debate, MPs backed the proposal to ban rogue landlords and letting agents that repeatedly commit offences against private rental sector laws or regulations. Fines of up to £30,000 for landlords or agents that knowingly rent out unsafe homes will also be implemented. Councils will be given access to a blacklist of rogue operators.

Additionally, the bill will controversially extend the Right to Buy scheme to housing association tenants who wish to purchase their homes. This policy will be partly funded by requiring councils to sell the top third of their most valuable properties.

Marcus Jones, the Local Government Minister, believes Pearce’s proposal would cause “unnecessary regulation and cost to landlords” that could discourage further investment in the buy-to-let sector and drive up rents for tenants.

He said: “Of course we believe that all homes should be of a decent standard and all tenants should have a safe place to live regardless of tenure, but local authorities already have strong and effective powers to deal with poor quality and unsafe accommodation, and we expect them to use them.”1

For the latest landlord advice and updates, check back to LandlordNews.co.uk.

1 http://www.theguardian.com/society/2016/jan/12/tories-reject-move-to-ensure-rented-homes-fit-for-human-habitation

 

 

Energy efficiency compliance deadlines revealed

Published On: January 13, 2016 at 2:18 pm

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The Government has recently announced new information for landlords regarding energy efficiency compliance in rental accommodation.

Previously, it was announced that by April 2018, it would become a criminal offence to let out a property with an F or G property rating at the beginning of a new tenancy agreement.

Deadlines

Now, the Residential Landlords’ Association has said the Government has issued new dates for the next energy bands. These are as follows:

  • April 2020-the minimum requirement of an E or above rated property will apply to both new and existing lets
  • 2025- Properties will need to be brought up to an energy efficiency of D or above
  • 2030-Minimum target of all rental properties to be at least a C energy efficiency rating

Concern

However, the RLA has expressed concern over the accuracy of EPC’s. Richard Jones, policy advisor and company secretary of the RLA, noted that, ‘the Building Research Establishment estimates that around 100,000 properties have an incorrect F and G rating so these ratings should be better than they are.’[1]

Energy efficiency compliance deadlines revealed

Energy efficiency compliance deadlines revealed

‘This means some of those currently rated at the lowest banding Band G ought to be reclassified as Band F and quite a number of those that are in Band F do in fact meet the Band E requirement,’ he continued. ‘We are making repeated representations to the Government on this issue because we firmly believe that EPC’s must be accurate before compulsion is brought in.’[1]

In addition, Jones believes landlords and agents acting on their behalf are permitted to work out the best way to adhere to these newly announced deadlines.

‘If you carry out improvements piece by piece, going first to Band E and then subsequently Band D and then onto Band C a different approach is required than if you carry out a whole house improvement to go straight to Band C from the outset,’ he concluded.[1]

[1] https://www.lettingagenttoday.co.uk/breaking-news/2016/1/new-deadlines-revealed-for-lettings-sector-energy-efficiency-compliance

 

 

Liverpool City Council Partners with ARLA, NALS and the RLA

Published On: January 13, 2016 at 12:50 pm

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Liverpool City Council has partnered with the Association of Residential Letting Agents (ARLA), the National Approved Letting Scheme (NALS) and the Residential Landlords Association (RLA) for its landlord licensing scheme.

Last year, the council introduced the country’s first city-wide licensing scheme for rental properties. However, its costs have been criticised for being too high.

As councils are not allowed make profits from licensing schemes, many have questioned why Liverpool’s scheme is so expensive.

The new agreement with the three industry organisations means that landlords belonging to any of these groups will receive a 50% discount on licensing fees, taking the charge to £200 per property, rather than the standard rate of £400 for the first property and £350 for each subsequent home.

Liverpool City Council Partners with ARLA, NALS and the RLA

Liverpool City Council Partners with ARLA, NALS and the RLA

Councillor Frank Hont, Cabinet Member for Housing at Liverpool City Council, explains the need for the partnerships: “When we launched the scheme, we were clear that we wanted to work with the private rented sector to help them comply with the scheme and find ways of giving discounts to those that are committed to meeting the standards.

“I am delighted that ARLA, NALS and the RLA have all come on board. It is a win-win for everyone, because their members benefit from a reduced fee and we are able to target our resources at those landlords who we know aren’t meeting the standards.

“This is all part of our drive to improve the quality of housing in the city and make sure that our residents have access to good quality accommodation.”1 

The Managing Director of ARLA, David Cox, comments on the agreement: “We are really pleased to become a co-regulator for the Liverpool selective licensing scheme.

“We are glad Liverpool City Council has seen the importance of distinguishing between the professional market and those who the scheme is designed to remove from Liverpool’s rental market.

“ARLA welcomes this initiative and hopefully, by giving landlords who use our members a 50% discount on licensing fees, it will encourage more landlords to use licensed letting agents.”1

Isobel Thomson, the Chief Executive of NALS, adds: “We are delighted to be part of a co-regulatory partnership with Liverpool City Council for their selective licensing scheme. We welcome the recognition they have given to NALS agents and the strict criteria they meet in relation to customer service and consumer protection.

“By offering a discounted licensing fee for those agents who come under a co-regulatory partnership, it is a clear indicator to landlords of which agents they should be using.”1 

And the Chief Executive of the RLA, Andrew Goodacre, also says: “The RLA is the only landlord association approved to offer a co-regulation alternative to those landlords in Liverpool who wish to continue to manage their portfolio themselves.

“There are a growing number of landlords who are choosing to manage their properties directly, and our scheme is an ideal vehicle for self-regulation whilst still providing significant savings on the license fees.”1

Around 8,500 landlords, owning about 39,500 properties, have already started the application process, which came into effect in April last year.

The council has also begun issuing the first set of licenses.

1 http://www.propertyindustryeye.com/liverpool-city-slashes-licensing-costs-for-members-of-arla-nals-and-rla/

 

Where are the Northern hotspots for BTL investment in 2016?

Published On: January 13, 2016 at 12:10 pm

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2016 looks to be a busy year for buy-to-let investment in the North of England.

Recently, Rightmove.com predicted that the average price of a property in London could increase to a cool £1m later this year, on the back of high demand, cheap mortgages and lack of accessible housing.

Savvy

Differing trends in the market, coupled with upcoming legislation changes mean that savvy investors could save significantly by purchasing lower entry real estate properties in the North.

Lower house prices, increased yields and extortionate southern property prices are all leading the North of England to become a prime location for buy-to-let landlords looking to expand their portfolio.

What’s more, the lucrative student market is also continuing to thrive, with many of the UK’s most popular universities located in northern regions.

Location, location, location

Experience Invest has moved to highlight the top 5 northern cities, where buy-to-let and student property investment is set to thrive in 2016: 

Liverpool

The Merseyside city has notoriously been a location for high rental income for a number of years, offering some of the greatest returns in Britain. 25,000 purpose built student rooms have been promised by 2017, therefore there is set to be a lot of potential for prudent landlords.

Manchester

At the centre of the Northern Powerhouse Scheme, Manchester is arguably the best northern location in which to invest. A growing population means there is increased demand for housing, from tenants and investors alike. The east and north of the region have good rental yields lower priced properties.

There are also 105,000 students currently attending four major universities in the city, again giving landlords plenty of demand for accommodation.

Newcastle

Offering favourable returns, the North East has often been seen as a lucrative investment area for buy-to-let. Yields of 9% are regularly achieved in central Newcastle, in comparison to a nationwide average of 6%.

Once more, student population in this city is thriving. Since 2008, a further 11,000 student rooms have been given the go ahead to accommodate demand.

Where are the Northern hotspots for BTL investment in 2016?

Where are the Northern hotspots for BTL investment in 2016?

Sheffield

Benefiting from a large renovation in the previous ten years, the Steel City is now firmly back in contention as a top investment location. Boasting a young population, Sheffield’s rental property is being taken far quicker than supply becomes available.

The city has one of the cheapest tram networks in the country, has the superb Meadowhall shopping complex and a thriving music scene. 60,000 students attend the city’s two universities and formerly being one of them, your author can confirm that Sheffield is the place to be!

Leeds

As the 3rd biggest city in the UK, Leeds is undoubtedly popular amongst investors. With an expanding population, the city has seen more and more students congregate in Headingly and Hyde Park on its outskirts.

In the centre, former warehouses and Victorian terraced buildings are interspersed with more modern apartment blocks and offices. Despite being a popular location, house prices are nowhere near those seen in the capital.

Right to Buy Could be Extended to Private Tenants

Published On: January 13, 2016 at 9:24 am

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A Conservative MP believes that the Right to Buy scheme may be extended to private tenants in the near future.

Right to Buy Could be Extended to Private Tenants

Right to Buy Could be Extended to Private Tenants

Mark Field, the MP for the Cities of London and Westminster, says the policy that allows tenants to buy their homes at a discount could soon be extended to those living in properties provided by private landlords.

Speaking in the House of Commons yesterday, where the Housing and Planning Bill was being debated, Field stated: “It has already been mooted, I think, by the opposition benches that buy-to-let landlords should be forced to sell their homes to tenants.

“I think that would be entirely wrong, but I think it would probably be an extension of what we are proposing.”

A key measure of the Housing and Planning Bill is to extend Right to Buy to housing association tenants.

Field believes the policy would reduce housing stock and result in properties being rented out to high earners.

He observed: “That’s what has happened to many of the housing estates in my own constituency, where essentially, the second or third buyer after a Right to Buy has been, dare I say it, a well-paid yuppie.”1

Field added that extending Right to Buy to social housing tenants would be unfair on private renters, whose voices are not heard so loudly.

Yesterday, the Housing and Planning Bill made it through its third reading in the House of Common and is now due to go to the House of Lords.

Alongside the extension to the Right to Buy scheme, it will introduce banning orders on landlords and letting agents, and implement fines of up to £30,000 for rogue landlords or agents.

For the latest changes to landlord law and daily updates, remember to check LandlordNews.co.uk.

1 http://markfieldmp.com/news-a-articles/housing-and-planning-bill/