Posts with tag: Buy-to-Let

Almost two-thirds of landlords unaware of new energy efficiency regulations

Published On: April 10, 2017 at 10:00 am

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Categories: Landlord News

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Nearly two-thirds of buy-to-let landlords have a lack of awareness regarding new Minimum Energy Efficient Standards that come into force in April 2018.

The 2015 Energy Efficiency Regulations outlined minimum standards for England and Wales. The legislation makes it a crime for landlords to grant a new lease for properties with an Energy Performance Certificate (EPC) rating below E from April 1st.

Worrying

Somewhat alarmingly, the research found that 25% of landlords do not know about the requirements of the new regulations. These prevent them from renewing existing tenancies or agreeing new lets if they do not come up to minimum standards.

42% said they are only ‘vaguely aware’ of the new regulations.

27% said that they are unaware of the EPC rating of their property. 49% said that they didn’t know of the new penalties for failing to comply with the regulations, while 31% underestimated the consequences.

Vital

Mike Feely, energy efficiency expert at E.ON, noted: ‘Government housing data already shows that the private rented sector has the highest proportion of properties falling in the F and G bands, so it’s vital landlords look into what they need to do before the regulations come into effect.’[1]

Almost two-thirds of landlords unaware of new energy efficiency regulations

Almost two-thirds of landlords unaware of new energy efficiency regulations

‘Whether landlords have in the past been put off by the perceived hassle, expense, or their own lack of knowledge around the subject, the clock is definitely ticking on the need to improve properties. We know this can be a huge challenge for landlords so we’ve developed a range of services to give them the support they need, from online account management that allows landlords to better control their property portfolios through to a range of great value insulation and heating services to make rented properties more energy efficient,’ he continued.[1]

Concluding, Mr Feely said: ‘For landlords worried about the potential cost of upgrading properties, financial support may also be available through the Energy Company Obligation if tenants meet certain qualifying criteria, with funding potentially available from major energy companies such as E.ON for insulation and new heating measures.’[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2017/4/two-third-of-landlords-unaware-of-new-energy-efficiency-rules

 

50% of landlords could quit sector due to tax changes

Published On: April 6, 2017 at 8:45 am

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The most recent analysis from AXA has revealed that as a result of the phasing out of mortgage interest tax relief, more landlords believe they will be affected than Government estimates.

Changes to mortgage interest tax relief calculations come into force from today, with AXA’s figures suggesting that half of landlords plan to quit the market by 2020. Many cite the fact that they are being unfairly targeted.

Worse Off

AXA’s research indicates that over 40% of landlords feel they will be worse off as a direct result of the tax changes. This comes despite Government estimates that 82% will not have any additional tax to pay.

However, AXA’s research suggests that today’s change, coming on top of a host of legislation targeting landlords in recent years, means that many will leave the sector by 2020.

21% said that they plan to sell all of their portfolio, while 10% plan to reduce. 7% said that they will move to a commercial property ownership. 8% said they plan to transfer ownership of their property to a spouse or other family member, who is in a lower tax bracket, thus avoiding tax.

50% of landlords could quit sector due to tax changes

50% of landlords could quit sector due to tax changes

Scapegoats

Two-thirds of landlords questioned said that they feel stigmatised for running their rental business.

The stark reality is that only 4% of private landlords have a portfolio large enough to give up work and live off the profits. On average, the typical UK landlord makes £343 rental profit every month. Profit levels do vary widely across the country, from £297 in the West Midlands to £713 in London.

Gordon Rutherford, Head of Marketing at AXA Insurance, noted: ‘Landlords have been subject to one piece of new legislation after another in recent years, much of it very complex indeed. We see a real confusion as to what the new tax changes will mean, with Government and landlords giving very different estimates of the impact.’[1]

‘We need to remember that few landlords are professional property tycoons: two thirds in the UK are ‘accidental’ landlords. They tend to own just one rental property that they’ve inherited or are finding hard to sell, and they make a modest income once time and expenses are out. They do feel increasingly apprehensive, as we can see from the numbers thinking of withdrawing their properties from the rental market in the coming years,’ Mr Rutherford added.[1]

[1] http://www.propertyreporter.co.uk/landlords/almost-50-of-landlords-plan-to-quit-due-to-unfair-tax-change.html

Aldermore changes five-year fixed BTL

Published On: April 5, 2017 at 1:19 pm

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Categories: Finance News

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Aldermore has revealed a number of changes to its five-year fixed rate buy-to-let mortgages. This includes a review of its position regarding affordability.

The Bank has moved to alter its affordability stress rate to the higher of the pay rate or the reversion rate +0.75%, down from pay rate or 5.5%.

In addition, it has reduced reversion rates, which now start from 3.23%.

Five-year products

What’s more, Aldermore has launched some new five-year fixed rate products.

New standard buy-to-let rates include a 3.28% at 75% LTV with a reversion rate of 3.23% and a 5.28% for an 80% LTV, with reversion rate of 4.53%.

For limited companies, five-year fixed rates now start from 4.08% at 75% LTV with a reversion rate of 3.33% and at 5.28% up to 80% LTV with reversion rate of 4.53%.

Aldermore changes five-year fixed BTL

Aldermore changes five-year fixed BTL

Changes

Charles McDowell, Commercial Director of Mortgages at Aldermore said: ‘These changes are good news for both landlords and limited company buy-to-let investors.’[1]

‘Whilst there have been many changes to the buy-to-let market over the last 12 months, the improvement in affordability on our 5 year fixed products will provide much needed support to the market. The increasing number of renters combined with the on-going supply pressures across the private rental sector is evidence of the integral role buy-to-let plays within the UK’s housing market. Our new products reaffirm our commitment to supporting UK landlords,’ he added.[1]

[1] http://www.propertyreporter.co.uk/finance/aldermore-revamps-five-year-fixed-btl-range.html

 

UK property supply increases for third straight month

Published On: April 5, 2017 at 9:51 am

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Categories: Property News

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UK property supply increased by 3.7% month-on-month in March, according to the latest report from House Simple. This was the third straight month in which supply has risen.

This said, new listings in the capital fell flat during the last month, sliding by 0.3% over the period. The largest falls were experienced in Lewisham and Hounslow, with new listings dropping by 41.4% and 40% respectively.

Rises

When London is excluded from the findings, UK property supply actually rose by 10.3%, which is a firm example of the divide being seen across Britain.

In fact, listings increased in more than three quarters of UK towns and cities in March. Stirling and Dundee, both in Scotland saw the largest rises in supply, with 87.8% and 70.9%.

Of the 25% of cities and towns that saw a fall in supply during March, Telford saw the largest drop, with figures down by 23.3%. Barnsley and Warrington also saw substantial falls, of 13.9% and 12.1% respectively.

UK property supply increases for third straight month

UK property supply increases for third straight month

Selling Season

Alex Gosling, CEO of House Simple, observed: ‘Although new listings were up in March, we’d have hoped to see more sellers, particularly in London, putting their homes on the market as we enter the Spring’s peak property selling season.’[1]

‘We need a supply boost in April, because the demand from buyers remains strong and thanks to the continued competitive mortgage deals still on offer, they are more than committed to purchasing,’ he added.[1]

 

[1] http://www.propertyreporter.co.uk/property/uk-property-supply-rises-for-third-consecutive-month.html

Confidence of property investors is high

Published On: April 5, 2017 at 9:03 am

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Categories: Landlord News

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A new report has indicated that confidence regarding investing in property is continuing to grow, with many buy-to-let landlords predicting a good year ahead for the UK housing market.

The survey from Shawbrook Bank discovered that 81% of landlords feel confident about the performance of their property portfolios in the coming year. Much of this optimism stems from improvements in the lending environment.

Demand

Tenant demand remains strong, with 30% of landlords questioned seeing an increase in the number of renters during the second half of 2016. In addition, half of all buy-to-let landlords have seen increases in income during the last twelve months.

It is also good news for the buy-to-let sector, with 66% of respondents saying that they plan on purchasing an extra buy-to-let property during the opening six months of 2017. This comes despite the numerous tax alterations and continuing uncertainty surrounding Brexit.

Confidence of property investors is high

Confidence of property investors is high

Optimism

Karen Bennett, Managing Director of commercial mortgages at Shawbrook Bank, said: ‘Despite uncertainty surrounding Brexit, landlords are still optimistic about the performance of their portfolios. With Brexit negotiations officially underway, as well as recent changes to housing policy, it is encouraging that the market doesn’t seem to be slowing.’[1]

‘Following last year’s tax changes it’s clear that investors are still getting a feel for how the changes will affect them. It is also evident that landlords have made an effort to understand how these new policies affect they way they do business, although the fact that 19% of those asked have little or no understanding of these changes means there is still work to be done,’ she added.[1]

[1] https://www.propertyinvestortoday.co.uk/breaking-news/2017/4/property-investor-confidence-runs-high

 

Is buy-to-let becoming less attractive?

Published On: April 4, 2017 at 8:43 am

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Categories: Landlord News

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It is no doubt that the past year has been extremely challenging for buy-to-let landlords. The raft of changes, such as increased stamp duty, changes to mortgage interest tax relief and the pending ban on letting agent fees have all impacted on investors.

There is growing concern that a number of landlords will struggle to make a profit from renting out their property, leaving many with no alternative but to leave the sector.

Restrictions

This is a high concern, as the level of housing stock available for tenants is already not enough to cope with spiralling demand.

Indeed, there has already been a fall in the overall total of buy-to-let property transactions since the additional 3% stamp duty surcharge came into force last April.

ARLA Propertymark fear that the phasing out of mortgage interest tax relief from April 6th will push landlords from the market.

However, the trade body feels it is still not too late for the Government to reconsider!

Is buy-to-let becoming less attractive?

Is buy-to-let becoming less attractive?

Changes

David Cox, chief executive at ARLA Propertymark, observed: ‘It’s been a year since the government inflated Stamp Duty costs for landlords to 3%, and it’s already made the Treasury £1.3bn. That’s more than changes to mortgage interest relief, which are now in force, are expected to make in its first three years. This will only further squeeze the sector and make buy-to-let a less attractive investment for landlords.’[1]

‘Our monthly Private Rented Sector report shows that since the stamp duty reforms came into effect last April, letting agents have seen the supply of rental stock decrease. In February, 44% saw supply fall as a direct result, while only 9% saw it increase,’ he added.[1]

Costs

Concluding. Mr Cox said: ‘The impending letting agent fee ban will also make buy-to-let investment less attractive, as costs are passed on through inflated agents’ fees which landlords pay. A quarter [27% of landlords] are expected to stop increasing their portfolios as a result and a fifth plan to sell some of their properties. We’re facing a severe housing shortage at the moment, and if the supply of rental stock falls any lower relative to demand for housing, we’ll find ourselves in the midst of a real crisis.’[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2017/4/buy-to-let-is-becoming-a-less-attractive-investment-for-landlords-says-arla