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Em Morley

Welsh Housing Bill Will Make it More Difficult for Vulnerable Tenants to Access Homes

Published On: December 4, 2015 at 1:07 pm

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The Residential Landlords Association (RLA) has voiced its concerns that vulnerable tenants will find it more difficult to access accommodation after the Welsh government’s Renting Homes Bill was passed.

Welsh Housing Bill Will Make it More Difficult for Vulnerable Tenants to Access Homes

Welsh Housing Bill Will Make it More Difficult for Vulnerable Tenants to Access Homes

The bill introduces huge changes to the way the private rental sector is operated in Wales. The RLA believes that while the bill was being passed, the government missed an opportunity to improve access to housing for vulnerable renters.

Prior to the bill, private tenants had to be offered a minimum of a six-month tenancy. The Renting Homes Bill originally planned to abolish this, known as the six-month moratorium.

Explaining this decision, Lesley Griffiths AM, the Minister for Communities and Tackling Poverty, noted that the moratorium prevented landlords “from offering tenancies to people they deem to be high risk”. She said the situation concerned her “greatly”1.

The government reversed its decision as the bill passed, admitting that this will make it more difficult for vulnerable tenants to access rental homes.

Now that the bill has completed its passing through the Assembly, the RLA has expressed its concern that the minister did not meet with it or any other landlord organisation, despite repeated requests since her appointment.

The RLA Vice Chairman for Wales, Douglas Haig, comments: “Ministers in Cardiff will now be implementing a set of radical changes to the private rented sector that will cause many landlords to consider if it is worth continuing in the market. At a time when we need more homes to rent, this will only make it more difficult still, especially for young and vulnerable people to access the homes they need.

“Given this, it is deeply concerning that the minister responsible for housing has so far failed to meet personally with bodies representing landlords to understand the true impact of the Government’s policies.

“Even at this late stage, we urge the minister to find time to meet to discuss how we can work constructively to meet our shared agenda to kick out the criminal landlords, whilst supporting the vast majority of good landlords to provide the homes we need.”1

1 https://www.landlordtoday.co.uk/breaking-news/2015/12/welsh-housing-reforms-a-missed-opportunity

Tips for moving home in silly season!

Published On: December 4, 2015 at 10:53 am

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Bells are jingling. Mince Pies are being devoured. Mulled Wine is being prepared. Boxes lay waiting to be unpacked. Removal men haul more in to the living room.

Ok, so moving house isn’t exactly top of everyone’s idea of the festive season, but by following just a few easy tips, a seasonal move can be made much less stressful.

Wish-list for a magical Christmas move

  • Plan ahead

If using a removal company during the holiday period, be aware that the run-up to Santa coming down the chimney is notoriously a busy time for everyone. Many companies could also be short-staffed due to Christmas holidays.

  • Use Christmas cards to tell friends about a change of address

Caution: This may or may not lead to them buying a Christmas and new home gift!

  • Organise packing in advance 

When moving, it is important to make sure things that are likely to be needed immediately as packed as late as possible, to ensure they are first off the van at the new address! In addition, early packing reduces the chances of taking unwanted items, which could be a lovely donation to charity ahead of the festivities

  • Check the forecast

Particularly when moving in Winter, people should check the weather forecast to make sure that Jack Frost and his friends can’t cause havoc and drive them crackers!

  • Be smart about presents

The last thing people moving house around silly season want is to pack more things then necessary. This is why it is a good and simple idea to give loved ones vouchers as a present. What’s more, this could save relatives forcing themselves to look pleased at unwanted gifts!

Tips for moving home in silly season!

Tips for moving home in silly season!

  • Keep valuables secure

With the excitement of the festive season, it can be easy to be too nonchalant about keeping valuables safe. Homemovers should ensure that things such as passports, jewellery and other important documents are put in a safe place.

  • Look forwards to summer

This might sound daft wrapped in coat, scarf and thermals but people moving home in Winter should make sure that all outdoor furniture being transported to their new home is clean and free of seasonal weather offerings…

  • Let there be light

Moving house in Winter can take place mostly in the dark, so be prepared to take torches and spare lightbulbs.

  • Food, glorious (pre-prepared) food 

The last thing that movers will be thinking about when finally in their new home is doing a big shop. Booking an online delivery will be another weight off the mind…as will placing a takeaway menu in close proximity on the first night!

‘For many of us, moving house can be a stressful experience at the best of time-let alone at Christmas,’ said Head of Harrison Murray estate agents Su Snaith. ‘However, with some consideration and planning, you can keep stress levels at a minimum and your spirits high-and think about celebrating Christmas in your new home.’[1]

[1] http://www.propertyreporter.co.uk/household/10-tips-to-help-you-move-home-during-the-christmas-run-up.html

 

 

Tax changes spark buy-to-let surge

Published On: December 4, 2015 at 10:20 am

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The forthcoming changes in stamp duty announced in last week’s Autumn Statement have already led to a surge in people looking to invest in buy-to-let, before the hikes come into effect.

Data from an investigation by Kent Reliance also shows that alterations to tax relief mortgage interest announced in the Budget also triggered a surge in borrowing through limited companies.

Acceleration

Following the changes announced in the Summer, the firm said that applications for buy-to-let mortgages increased by substantial margins. In September, applications tripled year on year to stand at £213% over the period. In addition, a quarter of all buy-to-let mortgage finance demand is now put through limited companies, up by 13% at the same time last year.

For the buy-to-let market as a whole, Kent Reliance believes that 56,800 buy-to-let loans will be issued to companies in 2016, if total lending doesn’t grow further. This would represent an increase of more than a fifth in comparison to the estimated total for 2015 (46,700).

As the Autumn Statement continues to sink in, the Treasury is continuing to consult on whether corporate entities with 15 or more properties will be excluded from the stamp duty surcharge. If this happens, it could give further incentives for professional landlords to incorporate, thus increasing demand.

Changes

An increase in switching to limited companies could prove not to be the only impact of the recent tax changes. At present, the average value of a buy-to-let property is £220,726. With the 3% stamp duty hike announced, this would presently represented an additional upfront charge of £6,622, which landlords would look to recoup through rental charges.

If a landlord was to hold a property for ten years, moving this cost over the duration of the tenancy would result in an increase of £55 per month for each tenant. In turn, this would support rental inflation, which currently is at 8.3% per annum.

Within Britain as a whole, there are now 5.6m households living in rental homes, a year-on-year growth of 8.4%. England has seen the number of privately renting homes pass the 5 million mark. This is likely to rise with landlords becoming more active in the market before April 2016.

What’s more, the value of rented accommodation has seen a marked growth, increasing by 6.5% in the year to September. With the number of properties and average value rising, the total value of landlords’ holdings has risen by £171.0bn in the last twelve months to stand at £1.2trillion by the end of September, a growth rate of 16.0%.

Tax changes spark buy-to-let surge

Tax changes spark buy-to-let surge .

Consequences

‘The Chancellor has trained his sights on buy-to-let, given the sector’s rapid rise in value, but the changes to the tax treatment in the last six months will bring unintended consequences,’ noted Andy Golding, Chief Executive of OneSavings Bank, which trades under the Kent Reliance and InterBay brands. ‘First, the rush to put properties inside a limited company will be sustained, especially if larger scale investors are indeed exempted from the new stamp duty surcharge. Secondly, the buy-to-let market will see activity hit overdrive between now and April as landlords seek to beat the stamp duty deadline,’ he continued.[1]

‘Yes, smaller-scale investors are now more likely to think twice before investing and I see that as a good thing. However, in the longer term, it is tenants who will pay the price of the chancellor’s tax raid on buy to let, as landlords will recoup increased costs through rent increases. Ultimately, the move will do little to help tenants save for a deposit on a home of their own. Making rented homes more expensive was surely not the Chancellor’s intention, ‘Golding added.[1]

Concluding, Gosling said that by, ‘tinkering with the cost of lending by subsidising first time buyers or penalising landlords is not the way to make housing more affordable.’ He thinks that,’ the only way to do that is to build more homes and while the Government’s new initiative is an improvement, it will need to be a catalyst of almost unprecedented proportions for housebuilding is a long way from where it needs to be.’[1]

‘With mortgage criteria tight, the PRS will remain pivotal to the country’s housing market and it is imperative that its growth and professionalisation is supported.’[1]

[1] http://www.propertyreporter.co.uk/landlords/btl-tax-change-sparks-landlord-rush.html

 

 

Stamp Duty Hikes Won’t Help Generation Rent, Warns Expert

Published On: December 4, 2015 at 10:01 am

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Chancellor George Osborne’s increased tax for buy-to-let landlords will be “ineffective for its purported aims”, according to the mortgage director of one of the world’s leading independent financial advice bodies.

Stamp Duty Hikes Won't Help Generation Rent, Warns Expert

Stamp Duty Hikes Won’t Help Generation Rent, Warns Expert

Mike Coady, head of deVere Group’s deVere Mortgages, made this claim after Osborne announced that buy-to-let investors and second home buyers will be charged an additional 3% in Stamp Duty from April.

Coady begins: “It is commendable that the Government wants as many people to own their own home as possible and, of course, this is something all of us in the mortgages industry would promote.

“However, for three main reasons, the Chancellor’s new 3% Stamp Duty surcharge will be ineffective in its purported aims of raising cash to help first time buyers and paying for more affordable housing.”

He explains: “First, the revenue raised by this initiative – £1 billion by 2021 – is a nominal figure when given the scale and seriousness of the UK’s affordable housing crisis.

“To many it seems this is something of a political stunt. The Government is wanting to be seen to be acting on this emotive and topical issue and is doing so by appealing to the politics of envy with buy-to-let landlords and second home owners the targets.”

Coady warns that many buyers will be rushing to buy property between now and April to avoid the higher costs. Naturally, this would push up house prices in the short-term.

He continues: “Furthermore, in the medium to long term, I don’t believe it will put off overseas or UK purchasers from investing in property. Despite the 3% Stamp Duty surcharge, which is not ideal of course, most investors will still regard investing in property in the UK, especially in areas like London, the South East and Manchester, as an attractive and safe investment opportunity.”

Coady also notes that as property investment is often a long-term commitment, 3% over the entire investment period is something that many landlords will be able to manage.

However, he warns that tenants could find their rent prices rising when the change is made in April, as landlords are likely to pass on their costs to renters. This could make it even harder for prospective first time buyers to get onto the property ladder.

He concludes: “The Stamp Duty will be ineffective in helping first time buyers, indeed it could hinder them further. If the Government is serious about helping generation rent, it needs to rethink. The solution to the housing crisis is not the rate of Stamp Duty.

“Planning restrictions and building more homes would be a better way to deal with the ongoing housing crisis in Britain.”1

1 https://www.landlordtoday.co.uk/breaking-news/2015/12/btl-tax-clampdown-wont-help-generation-rent

What Will Stamp Duty Changes Mean for London Landlords?

Published On: December 3, 2015 at 5:14 pm

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It is believed that the property market will see a rush of buy-to-let investors and second home buyers purchasing property before the increase in Stamp Duty in April. However, experts also warn that existing landlords may sell their portfolios.

In his Autumn Statement, Chancellor George Osborne announced that buy-to-let investors and second home buyers will pay much higher Stamp Duty costs from April next year – they will be charged an additional 3% on existing rates.

For those buying a £400,000 property, Stamp Duty will rise from £10,000 to £22,000 and from £5,000 to £14,000 on a £300,000 house.

More expensive properties will incur tens of thousands of pounds in extra tax.

The Association of Residential Letting Agents (ARLA) believes the additional tax will have a disastrous effect on the private rental sector. It believes that the increase will deter new landlords from entering the market, worsening the shortage of properties to let and pushing up rent prices.

What Will Stamp Duty Changes Mean for London Landlords?

What Will Stamp Duty Changes Mean for London Landlords?

Head of Residential Research at Savills, Lucian Cook, claims that the areas of London already hit by Stamp Duty increases introduced a year ago will be among the most impacted by the latest rise.

He adds: “The likelihood is that this will further suppress transactions and prices in the prime central London market, given the extent to which this market has been supported by purchases from second homeowners and investor-buyers.”1

However, in the short-term, Cook says it is highly likely that some landlords will bring forward their planned purchases before the April deadline.

To avoid paying the additional tax, landlords and second home buyers must, in most cases, have to complete their purchase before 1st April 2016. However, off-plan buyers, which exchanged before the Autumn Statement and won’t complete until after 1st April, will not have to pay the extra charge, according to the Treasury.

Mortgage broker John Charcol’s Ray Boulger believes that with four months before the changes take effect, there could be a rush to buy, as “anyone already thinking of purchasing a buy-to-let or second home will start actively looking”.

However, he warns that this short-term rise in demand could temporarily drive up prices, before they drop again when the charge is enforced: “Buyers need to be careful that price falls after April don’t wipe out the 3% saving they make by rushing to buy now.”

The next few months could also experience a surge in landlords selling their portfolios, notes Rachael Griffin, of investment firm Old Mutual Wealth. The rise in Stamp Duty could be “the final nail in the coffin” for some investors, she warns, following the previous announcement to cut buy-to-let mortgage interest tax relief.

Unlike homeowners, landlords can offset mortgage interest against their rental income to reduce their tax bill. However, the summer Budget revealed that tax relief will be cut to the 20% basic rate, which will be phased in from April 2017.

Although this reduction is expected to raise more than £1 billion in tax by 2021, it could cause some landlords to make a loss.

Additionally, the wear and tear allowance is being revised from April and an earlier deadline for paying Capital Gains Tax (CGT) is due to be implemented.

Boulger comments: “Combining the other tax changes with the 3% Stamp Duty surcharge, it’s easy to see this is an attack on small landlords. Inevitably, some will sell out or not expand their portfolios.”

He also believes that there could be further tax changes for landlords in the future: “Chancellors rarely stop at the first bite of the cherry.”1 

The Treasury will now consult on the details of the Stamp Duty increase, including a possible exemption for firms with large portfolios of rental property.

Experts also hope for a number of grey areas to be clarified, such as the tax on those who temporarily own two properties because they are bridging and of unmarried couples that buy an investment property.

How will all of these financial changes affect your buy-to-let business? Use our Stamp Duty calculator to see how much you will be charged on a new property purchase: /calculator/ 

1 http://www.homesandproperty.co.uk/property-news/will-stamp-duty-hike-turn-buy-to-let-into-buy-to-fret-in-the-capital-a93436.html

Making Your Home Guest-Ready This Christmas

Published On: December 3, 2015 at 4:32 pm

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Christmas is a time for celebrating with friends and family, but what if they are coming to stay? Make sure you don’t get flustered with our guide on making your home guest-ready this festive season.

Sleeping arrangements

You may have to shuffle some people around in your house to free up a bedroom or temporarily move into the living room. If you have space, a sofa bed is the perfect way to keep everyone comfortable and avoid the

Making Your Home Guest-Ready This Christmas

Making Your Home Guest-Ready This Christmas

dreaded airbed. If you haven’t got one, check delivery dates to ensure your new addition arrives before your guests! Keep linen fresh and possibly invest in some wintery sheets.

Around the table 

If you’re going to be cooking Christmas dinner for more people than usual this year, think about how you will get everyone around the table comfortably. Consider adding more chairs to your table (you could ask your guests to bring theirs) or put two tables together to create plenty of space.

Space

With decorations, ornaments and everyday objects around, space can be limited at Christmas time. But your guests will want somewhere to put their belongings and make sure that their luggage isn’t causing chaos. Make sure that they feel comfortable and not like they’re cluttering your home!

Warm and cosy

It is important that your guests feel relaxed in your home and a great place to start is creating a festive atmosphere. If you have a fire, light it in the evenings and all sit down together. Alternatively, lighting scented candles gives a cosy feel and fills the air with festive aromas. Make sure your guests don’t get cold by providing them with a warm throw on their bed.

Essentials

If your guests are bringing presents and party outfits, they may forget their essentials. It is a good idea to place a small basket of toiletries in their room, as a thoughtful touch. Remember to also supply them with clean towels and don’t leave them feeling awkward by making sure they know where to find the new loo rolls!

Small treats

Make sure your guests feel welcome by providing a few refreshments in their room so that they don’t feel uncomfortable about searching through the kitchen. Visitors will appreciate everything from fresh flowers on the bedside table to their favourite wine in the fridge.

Will you be hosting Christmas this year? What ideas do you have for making it memorable?