Written By Em

Em

Em Morley

Keep your property safe this Winter

Published On: December 14, 2015 at 12:51 pm

Author:

Categories: Property News

Tags: ,,,,

As Autumn turned to Winter, there were precious few people looking forwards to the months of cold, dark nights.

However, November and December typically see burglars licking their lips. During this time period, burglaries across Britain rise by an average of 25% each year, with Christmas gifts their main target.

Homeowners and tenants alike then must make sure they follow key guidelines in order to keep their properties safe from these mindless few.

Keeping your property safe

‘As the night’s draw in, burglars are likely to try and take advantage of the darkness,’ observed Steve Coyle, Operations Director at Edinburgh based property management specialist Cullen Property. ‘To prevent the upset and damage caused by break-ins, both owners and tenants can take a few simple measures to make their home safer, especially if they are planning to go away for a few days.’[1]

8 top-tips for keeping property safe during the dark nights are:

  • Lock up properly

This sounds obvious but a surprising number of burglaries occur as a result of a homeowner or tenant not fully locking doors or windows. Yale or mortice locks should be used where possible. In addition, leaving keys out under a doormat or plant pot are also leading to more break-ins. Police figures show 6,000 burglaries during 2014 involved intruders using keys to enter a home.

  • Don’t assume

Those living in top floor flats or above the ground floor could assume that their property is safe. However, burglars are undeterred by location and go to often extreme measures to target certain homes. Regardless of location, owners and tenants should make sure their homes are secure.

  • Safeguard Valuables

If a householder or tenant knows that they are going to be away from a property for a considerable period, they should look at taking jewellery, laptops and other expensive items with them.

Keep your property safe this Winter

Keep your property safe this Winter

  • Secure windows

By closing all property windows and making sure all latches are attached, people can drastically reduce the chance of burglars being able to gain access to the home.

  • Let there be light

People living in a property should put lamps on a timer when they are out to give the impression there is someone in, particularly in the afternoons and evenings.

  • Store inside

Things such as bikes that are commonly left outside or in a communal stair should be brought inside the property. Landlords should also check their landlord insurance to check what things are covered on their policy.

  • Get a little help from friends

When away from a property for a considerable amount of time, people should ask their landlord, a neighbour or friend to check on the property while they are away.

  • Don’t broadcast that you aren’t there!

Another obvious one but don’t broadcast holidays or trips away on social media, unless you are confident your posts can only be seen by trusted friends!

 

[1] http://www.propertyreporter.co.uk/landlords/tips-to-keep-your-property-safe-during-burglars%C3%A3%C2%A2%C3%A2%E2%80%9E%C2%A2-busiest-weeks.html

 

 

Stamp Duty rises amount to 11 months net income

Published On: December 14, 2015 at 10:55 am

Author:

Categories: Finance News

Tags: ,,,

New research has found that the cost of the forthcoming 3% stamp duty on buy-to-let properties will be equivalent to 11 months income for the average mortgaged landlord.

An investigation by property services group Countrywide suggests that most private sector landlords looking to buy after April 2016 will attempt to offset this cost by offering less when buying.

At present, rents on newly let properties increased by 2% year on year. This rise was led by markets in the East of England.

Rises

In this year’s Autumn Statement, Chancellor Osborne announced plans to introduce a new 3% stamp duty tax rate for buy-to-let landlords and second home owners.

Research from Countrywide shows that should that larger tax burden not be factored into the purchase price of a property, this would lead to a reduction in gross yield of 0.2%. This is the same as 11 months income for the typical buy-to-let landlord, when borrowing costs are taken into account based on the average LTV of 68%.

Buy-to-let landlords in the South West and the North of England will experience the greatest cost relative to their rental income, with the extra tax burden equivalent to 14 and 12 months rental income respectively. Landlords in the North West of the country will see the least cost hike, accounting for 8 months of income.

The majority of buy-to-let purchases were found to take place in London, the South and East of England. 60% of homes sold in this market during the past year were in these regions. Landlords within these areas face the greatest cash increase in stamp duty of £6,000 on average.

Stamp Duty rises amount to 11 months net income

Stamp Duty rises amount to 11 months net income

Great expectations

It is hoped that the widely anticipated house price growth during 2016 will take some of the sting from the tax increase. Should prices increase at the same rate as in the last five years, the next year will see the cost of additional stamp duty offset.

In the Midlands and the North of England, 16% and 12% of sales are to landlords. What’s more, data from the Countrywide report indicates that the average property purchased in these regions would previously have not faced a stamp duty bill, but will now face a £3,200 tax charge from April.

These changes in stamp duty come as the number of homes available to rent continues to dwindle, with numbers down by 5% year on year.

‘The stamp duty increase will impact landlords’ purchasing power,’ observed Johnny Morris, research director at Countrywide. ‘Many entering the market will be faced with a choice between making a lower offer when buying of having to cover the additional costs themselves, impacting yields.’[1]

Morris went on to say, ‘most landlords view property as a long term investment, on average holding a property for 17 years and larger investors will be exempt from the higher stamp duty rate. This means over the long term the private rented sector will continue to grow, but there’s likely to be a few lumps and bumps along the way as landlords get to grips with and adapt to the changing environment.’[1]

‘It’s unlikely the change to stamp duty will see an immediate impact on rents. Landlords are rarely able to pass on increasing costs to tenants, as rental prices are set by market forces. But if less landlords choose to invest in the sector in the short term, a fall in homes available to rent could put pressure on prices,’ he concluded.[1]

[1] http://www.propertywire.com/news/europe/uk-rental-market-landlords-2015121411312.html

 

Buying is Cheaper than Renting in the Whole of the UK

Published On: December 14, 2015 at 10:38 am

Author:

Categories: Property News

Tags: ,,,,

Prospective first time buyers would have lower monthly outgoings if they bought their own property as opposed to renting, according to a recent report from Santander.

In every region of the UK, the average monthly rent now exceeds the average monthly mortgage repayment.

The bank’s study found that hopeful buyers would save an average of £2,300 per year if they buy their own home. The average rent in the UK is currently £995 a month, compared to monthly mortgage repayments of £805 for the typical first time buyer household. This means that homeowners could save £190 a month.

The difference between renting and buying

Region

 Average house price Average rent per month Average monthly repayment with 21% deposit

Difference between rent and mortgage
South West £187,416 £902 £710 £192
Greater London £363,555 £1,555 £1,376 £179
Scotland £137,504 £678 £521 £157
Wales £129,582 £618 £491 £127
North West £137,874 £643 £522 £121
Yorkshire and the Humber £136,834 £631 £518 £113
West Midlands £151,224 £674 £572 £102
East Midlands £144,712 £636 £548 £88
North East £121,072 £541 £458 £83
South East £246,023 £959 £931 £28
East of England £215,082 £816 £814 £2
UK average £212,610 £995 £805 £190
Buying is Cheaper than Renting in the Whole of the UK

Buying is Cheaper than Renting in the Whole of the UK

First time buyers in the South West would make the biggest savings by purchasing a property, as the average monthly rent in this region surpasses mortgage repayments by more than £192.

Those in London, where rents are 56% higher than the UK average, would be £179 better off per month by buying.

However, buyers in the East of England would not see much difference, as the typical monthly mortgage repayments in this region is just £2 more than the average rent.

Managing Director of Mortgages at Santander, Miguel Sard, says: “People assume that buying a property will put them under greater financial pressure, but often the reverse is true. With annual savings averaging well over £2,000, this can really mount up over time and of course, once the mortgage is paid off, you have a valuable asset to show for it.

“Many prospective first time buyers see the cost of saving for a deposit as prohibitive, but there are many deals available for smaller deposits.”

He explains: “Buying a property is a big financial commitment and there are upfront costs to consider, but over the long term, the financial benefits can be very significant. Getting independent advice and looking for competitive rates either online or through a mortgage adviser is crucial to get the best mortgage to meet potential homeowners’ individual needs.”1

Santander found that the average first time buyer home costs £212,610 in the UK. This means that a buyer with the average deposit needed – 21% – must have £44,648 in order to get onto the property ladder.

1 http://www.propertyreporter.co.uk/property/buying-is-cheaper-than-renting-across-all-of-the-uk.html

 

 

 

 

 

 

 

 

 

 

 

 

The Rise of the Live-In Landlord

Published On: December 13, 2015 at 4:42 pm

Author:

Categories: Landlord News

Tags: ,,,,

The amount of live-in landlords offering rooms to rent in the UK is on the rise, but how does this compare to ordinary buy-to-lets?

Lodgers can change the dynamic of sharing a home – who decides when the heating comes on? Who controls the TV? How many showers should someone have a day?

In an ordinary flat or house share, all of the tenants are equal and the landlord is not usually involved too much. However, if your housemate is also your landlord, an immediate power imbalance arises.

And it’s not just the rising number of lodgers that have the issues, many landlords face difficulties too.

Research from insurance firm LV indicates that the amount of people in Britain renting a room almost doubled from 1.4% to 2.7% between 2009-14, charging an average of £3,003 per year.

And the trend is set to soar. From April, homeowners letting a room in their house will be able to earn up to £7,500 a year without paying income tax on it. This is up from the current £4,250 limit. Meanwhile, buy-to-let landlords face higher Stamp Duty and reductions in tax relief.

Traditionally, lodgers are young, single people looking to rent a room while they study or start their career somewhere new.

The Rise of the Live-In Landlord

The Rise of the Live-In Landlord

However, lodging now occurs more often when someone has bought or rented a home and lets or sub-lets a room. This can help with expensive mortgages and sky-high rents.

Financially, lodging can benefit both parties. But what about living conditions?

The arrangement doesn’t work for everyone. Emma was once a weekday lodger, living with a mother and daughter in Eastbourne while she studied. “It was made clear that I was not allowed in the kitchen to cook at certain times,” she recalls.

She continues: “Although my daily routine was regular, in that I left the house at the same time each day, they would often occupy the bathroom at the exact time I would need to shower before leaving.”1

With the landlord as her housemate, Emma felt that she couldn’t complain.

It can be difficult for landlords too, though. Katy is a married mother of two from London who has rented out a bedroom in her house for eight years.

She explains the importance of finding the right lodger: “We’re not a particularly tidy family and some people just can’t handle that.

“We once had a lodger who was very meticulous and used to use the washing machine every single day. Whenever we left anything out, she would wash it up and clean up. It was overwhelming.

“Then we had another lodger who spent quite a lot of time on his bed smoking dope, as far as I could see.”1

LV’s study, conducted by PCP Research, found that one in five live-in landlords have come home to find appliances left on unattended, such as ovens. One in six have found windows left open.

Additionally, tension can arise as lodgers have fewer legal rights than other tenants. It is easier for live-in landlords to evict lodgers, needing only reasonable notice, rather than a possession order from the court.

Live-in landlords can also enter renters’ bedrooms without permission.

But issues can be resolved much easier, as landlords see more of their tenants.

As this practise is on the rise, as are extreme cases involving lodgers. The news has been full of shocking stories that may put any prospective live-in landlord or tenant off!

In October, 22-year-old Jesse Harper was convicted of the manslaughter of his landlord, Joanna Doman. He threw her down the stairs of the home in Bath after she confronted him over his habit of taking two baths a day.

And last year, Neil Lewis, a landlord from Colchester, Essex, was fined for drowning his lodger’s cat after it knocked over his model aeroplane.

However, there are many happier experiences for lodgers and live-in landlords. In 2006, David Soane offered to donate a kidney to David Clark of Swadlincote, Derbyshire, who he had lodged with several years before.

And Niamh Carroll became romantically involved with Samuel Cooper, who had rented a room in her flat in Sutton, Surrey.

Indeed, some homeowners let their spare rooms to avoid loneliness.

Flat and house share website SpareRoom.co.uk found that 45,000 people over the age of 50 in the UK took in a lodger in 2013, up from 32,000 in 2011.

Dak Kopec, Director of Design for Human Health at Boston Architectural College, says that searching for a lodger simply for company isn’t the most reliable way of finding a good tenant, as the relationship is fundamentally financial. However, he believes that the landlord and renter should have shared world views, including political, social and ethical.

Kopec says that having something in common is especially important when two people are living in cramped conditions.

He explains: “The owner will want to exercise a degree of territorial control. If both they and the lodger like cooking, but in different styles or at the same time, the one who thinks they have the power might tell them it’s ‘their’ kitchen. The person renting might feel obliged to stay in their room.”

And if there’s a personality clash, “it could end in disaster,” warns Kopec.1

Director of SpareRoom.co.uk, Matt Hutchinson, says that the key to avoiding arguments is to be upfront with each other before the lodger moves in.

He continues: “Lodger-landlord relationships aren’t like tenant-landlord relationships, but they’re not quite like flatmates either.

“It’s easy for both people to think they understand the dynamic without having really discussed anything. When anything contentious crops up, it can then be a problem – simple things like whether it’s okay for the lodger to have their partner over to stay and, if so, how often, can cause resentment.”1

1 http://www.bbc.co.uk/news/magazine-34982458

UK rents among the highest in Europe

Published On: December 13, 2015 at 9:15 am

Author:

Categories: Finance News

Tags: ,,

New data suggests that rental costs in Britain are among the highest in the whole of Europe, with solace coming with the fact that homeowners benefit from low mortgage deals.

Research from the National Housing Federation also suggests that UK tenants spend 39.1% of their income on rent, in comparison to the European average of 28%.

Competition

The federation also said that renters were now more secure within their homes, as a result as shorter tenancies. However, homeowners are reaping the benefits of advanced competition between lenders.

As a result of the ongoing mortgage battle between lenders, there is currently, ‘fierce competition’ meaning that a number of, ‘great mortgage deals,’ are available, according to the British Bankers’ Association. Tumbling interest rates, long-term tracker deals and lack of supply of homes are all leading lenders to lower the cost of home loans to try and entice owners to their products.

Concern

For those trying to get onto the housing ladder, the gulf in fortunes between renters and owners will come as a concern. The National Housing Federation notes that around 17% of UK residents were private renters, but are faced with high costs.

More of a concern is the fact that renters in European Countries such as Holland and Germany have fees 50% cheaper than those in Britain.

UK rents among the highest in Europe

UK rents among the highest in Europe

‘How can we expect people to raise families, start businesses or save for their first home if they don’t even know where they will be able to afford to live?’ asks David Orr, chief executive of the National Housing Federation. He also said that, ‘high rents are just one symptom of the housing crisis, we are simply not building enough due to under investment and problems with the land market.[1]

Deals

The British Bankers’ Association suggests that activity among owner-occupiers has increased over recent week, with lenders trying to encourage owners to move to fixed-rate deals.

Aaron Strutt, of mortgage brokers Trinity Financial, said that, ‘more of the banks and building societies are actively targeting their existing customers and offering them new deals. Rates are so cheap at the moment that there are often savings to be made even if you are on one of the super-low tracker mortgages.’[1]

[1] http://www.bbc.co.uk/news/business-33253659

 

 

 

Landlords urged to add to portfolio quickly

Published On: December 12, 2015 at 2:15 pm

Author:

Categories: Landlord News

Tags: ,,,

Buy-to-let landlords have been urged to act quickly to avoid the 3% stamp duty hikes announced by the Chancellor in the Autumn Statement, which come into force on 1st April 2016.

Lender Together said it has already seen record levels of lending since Mr Osborne altered conditions for landlords earlier on in the year. The rise was recorded following the Chancellor’s move to reduce the amount of tax relief property investors are able to claim back on their mortgages.

Increases

The latest upcoming changes have led the lender to urge landlords keen to add to their portfolio to complete their next purchases in Q1 of 2016, or face considerable tax rises.

Mr Osborne is trying to address what he calls, ‘the growing crisis of home ownership,’ in Britain by raising £1bn by 2021, to fund the construction of new homes.

Gary Bailey, sales director at Together said, ‘this is a double-whammy for buy-to-let landlords who feel they’re being penalised for being entrepreneurial. The hike in stamp duty, together with the previous announcement that reduced landlords’ ability to offset mortgage interest costs against rental income, will certainly have a major impact on the buy-to-let market.’[1]

Landlords urged to add to portfolio quickly

Landlords urged to add to portfolio quickly

‘That said, this might well fuel opportunities,’ he continued. ‘For example, we could see a rise in demand for semi-commercial properties, since this latest levy is specifically for residential. Keen property investors will look at the alternatives or will simply build these new costs into their model.’[1]

‘As a lender, we’re likely to see an increase in demand as a result of this announcement. We’ve already seen a significant upturn in lending since the Summer Budget and this is set to increase in Q1 of 2016 as savvy investors aim to avoid the new 3pc levy that will kick in on 1 April 2016,’ he concluded.

[1] http://www.propertyreporter.co.uk/landlords/btl-landlords-must-grasp-window-of-opportunity.html