Posts with tag: Buy-to-Let

Tenants could face rent rises of 30%, warns peer

Published On: February 17, 2017 at 9:50 am

Tags: Buy-to-Let,landlords,mortgage interest tax relief,tax,tax changes

Tenants could face potential rent increases of between 20 and 30 per cent as a result of tax changes hitting landlords, according to a former independent member of the Bank of England’s Monetary Policy Committee.

David Miles, now Professor of Financial Economics at Imperial College London, has called for the current 3% stamp duty surcharge and changes to mortgage interest tax relief to be scrapped.

Significant Rent Rises

Mr Miles estimates that, ‘rents would need to rise between 20 and 30 per cent’ in order to offset the Government’s measures.

Responding to the argument put forwards by former Chancellor George Osborne that tax changes are helping first-time buyers, Miles observed: ‘Aspiring first-time buyers are hardly helped by squeezing the supply of rental property and driving rents up.’[1]

Continuing, he said: ‘It’s strange to believe that having households channel more of their savings into US Government bonds or into equity issued by German companies is to be preferred to their investing in providing rented accommodation in the UK.’[1]

Tenants could face rent rises of 30%, warns peer

This analysis from Miles is included in the latest comments from the Residential Landlords Association, which claims that a majority of landlords could be negatively impacted as a result of the tax changes.

The RLA has called for the Government to use the extra revenue generated from the stamp duty levy to stop the implantation of mortgage interest tax relief changes. At the very least, the Association wants to see it applied only to new borrowing for new housing.

[1] https://www.lettingagenttoday.co.uk/breaking-news/2017/2/tenants-face-rent-rises-of-30-warns-ex-bank-of-england-chief

How do London landlords compare to those in other regions?

Published On: February 16, 2017 at 3:23 pm

Author: Em Morley

Categories: Landlord News

Tags: Buy-to-Let,buy-to-let landlords in London,London,London landlords

An interesting piece of data released by the Council of Mortgage Lenders has revealed how London landlords shape up to those in the rest of the UK.

According to the report, those in London are likely to have greater disposable income, work full-time and become landlords and a younger age.

London Landlords

In London, around 50% of landlords have at least £1,000 monthly disposable income. Outside of the capital, just one-third of landlords report this kind of cash.

London landlords are 27% more likely to be in full-time employment and 37% less likely to be retired than landlords in the rest of the country.

In addition, they are 25% less likely to start as an accidental landlord and 50% more likely to become a landlord after moving in with a partner who already owns a home.

The typical age of a first-time landlord in London is 42, in comparison to 47 outside of the capital.

How do London landlords compare to those in other regions?

Properties Owned

In terms of property types, landlords in the capital are more likely to let out flats, with 79% owning this type of dwelling. 47% have houses to let, in comparison to 84% in the rest of the country.

60% of capital landlords own a single investment property, while 20% own two-similar to the demographic in the rest of the UK. In addition, landlords in London are just as likely to offer tenancies of more than 12 months than in other areas.

The use of a letting agent is more common in London, but landlords in the capital are less likely to opt to obtain full management through their agent.

Using a limited company is still relatively uncommon, both in and out of London. Just 6.2% of landlords in London have incorporated, as opposed to 2.8% outside of the capital.

£40k salary required to rent alone in London

Published On: February 16, 2017 at 10:00 am

Author: Em Morley

Categories: Property News

Tags: Buy-to-Let,London,London renters,renting in london

A new online estate agency in London has stated that a single person renting in the capital must earn a gross salary of at least £39,876.84 to cover accommodation and living costs.

Nested has established an index which looks at rental costs in 33 London boroughs, 15 UK cities and 72 cities worldwide. In London, to cover rental costs, a single person must earn £3,323.07 per month.

Rental Costs

For a family living in London, they must earn an average of £6,305.31 per month in order to cover rent and living costs. This equates to a gross salary of £75,663.72.

In order to work out the amount required to cover rents, Nested looked at the price per square metre based upon current market listings with the minimum space, as seen in guidelines from the Greater London Authority.

Calculations from the agency reveal that the least affordable borough to rent in the capital is Kensington and Chelsea. Rents per square metre here total £72.40 per month. As such, to afford to rent alone and cover additional living costs in Kensington and Chelsea, an individual must earn £9,736.55 per month, or £116,838.60 per year.

£40k salary required to rent in London

For a family of four to rent in this borough, a monthly income of £18,474.48 is required. This equates to an annual income of £221,693.76.

On the other hand, the most affordable London borough in which to rent is Bexley, where rents per square metre total £13.30 per month. To afford to rent alone and cover costs here, an individual must earn an income of £1,788.62 per month, or £21,463.44 per year. A family of four requires a monthly income of £3,393.79 or £40,725.48 per year.

Average house prices rise in England at start of 2017

Published On: February 15, 2017 at 12:34 pm

Author: Em Morley

Categories: Property News

Tags: average property prices,Buy-to-Let,housing market,price of property,rents,yields

The average price of a property in England increased slightly month-on-month to January, but fell in Scotland and Wales, according to new data released by Home.co.uk.

Average values in England rose by 0.3% from December, but fell by 0.2% in Wales and 0.3% in Scotland.

Price Rises

Property price growth in England was driven by a 1.9% month-on-month rise in the East, taking the average house price value here to a record £348,651 per month.

The East and West Midlands saw some of the highest annual rent increases, of 11.4% and 12% respectively.

However, greater London saw the slowest growth in England, with a monthly rise of 0.1%. Prices in the capital are now 1.2% less than one year ago.

Annual house price growth for England and Wales slipped to 3%, while in Scotland, growth was 2.3%. As such, the average price in England and Wales stands at £298,445 and in Scotland, £177,037.

Buy-to-Let Strength

Doug Shephard, director of Home.co.uk, feels that prices could increase in regions where rents are rising and suggests this is a sign that buy-to-let investment is strong.

Average house prices rise in England at start of 2017

Shephard said: ‘It is an established fact that some of the best BTL yields in the country are to be found in the North, and Yorkshire will not be alone in attracting the attention of investors going forward.’[1]

‘On the basis of buy to let investment yield, Wales, the North East and Scotland also look promising. However, the various new tax rules recently imposed will mean astute investors will be incentivised to focus on locations that offer the best yields and rising rents,’ he continued.[1]

Rents

Moving on, Shephard observed: ‘Home prices have been, are, and always will be underpinned by rents. Yields, be they dividends, interest on capital or rents, are always tied to the underlying investment. In today’s near zero interest rate environment and volatile stock markets, unprecedented sums have been ploughed in to the property market in search of a decent return on capital.’[1]

‘In today’s property market it is investment, or lack of, in the private rented sector that ultimately will dictate the direction of the regional markets. Moreover, should the sector be further disincentivised, for example by more regulation or taxation, then we may see the whole market turn to the downside,’ he concluded.[1]

[1] http://www.propertywire.com/news/uk/home-prices-marginally-england-fall-scotland-wales-start-2017/

New digital landlord registration system in Scotland goes live

Published On: February 14, 2017 at 2:27 pm

Author: Em Morley

Categories: Landlord News

Tags: Buy-to-Let,landlords,Registers of Scotland,Scottish landlords

A new digital application for a live register of landlords has ben launched in Scotland.

This application will make it much easier for anyone to search the public register of landlords, for landlords to apply for or renew their registration and for local authorities to update the register.

Register

Developed by Registers of Scotland for the Scottish Government, the application is in tune with Government digital standards and can be accessed using a Smartphone, tablet or computer.

Kevin Stewart, minister for local Government and housing, said: ‘This new application provides a better and more accessible service for those who need to use it. Crucially, it will reduce the time that local authority staff need to spend administering the system, freeing them up to target those landlords who either don’t or won’t comply with the landlord registration requirements. That will help to improve standards for the 700,000 people whose home is in the private rented sector.’[1]

‘I am delighted by the collaboration between Registers of Scotland, the Scottish Government and local authorities on this project, and am grateful for the hard work of those who worked on it, including the many local authority landlord registration officers who helped to test it before it went live today,’ he added.[1]

New digital landlord registration system in Scotland goes live

Benefits

Sheenagh Adams, Keeper of the Registers of Scotland, believes that by working closely with the Scottish Government and local authorities, the new application will bring significant benefits to the whole sector.

Adams observed: ‘The new application is a key part of our business transformation, utilising digital technologies that allow us to deliver even better value for the public. The collaboration has been extremely successful, and I would like to thank all of those involved for their hard work.’[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2017/2/new-landlord-registration-system-goes-live

Buy-to-let costs showing signs of consistency

Published On: February 14, 2017 at 11:02 am

Author: Em Morley

Categories: Landlord News

Tags: Buy-to-Let,buy-to-let mortgage costs,landlords,mortgage rates

Fresh research from Mortgage Brain has revealed that buy-to-let mortgage costs remained at record lows during the last three months.

Over the last three years, there have been strong year-on-year reductions in the cost of buy-to-let mortgages. For example, the cost of an 80% LTV two-year fixed rate is now 18% less than it was at the beginning of 2014 and 11% less than one year ago.

Low rates

In addition, the lowest rate three-year fix at 80% LTV (3.39%) is 16% less than it was three years ago and 10% less than last year.

For a 60% LTV five-year fix, rates are 15% lower than in 2014. For 70% and 80% LTV, rates are 14% and 11% lower respectively.

Despite the long period of reducing mortgage rates, short term analysis reveals there are signs of potential stabilisation with mixed movement in costs of all major BTL products in the last three months.

A three-year fix at 80% LTV costs 4% less than it did three months ago. The costs of a two-year fix at 60% and 80% LTV, a three-year fix at 70% LTV and a five-year fix at 60% LTV are all down by just 1% in comparison to November 2016.

Buy-to-let costs showing signs of consistency

Consistency

Mark Lofthouse, CEO of Mortgage Brain, observed: ‘Like our recent residential mortgage product analysis the buy-to-let sector looks like it could be levelling out and moving away from the long period of historic lows in terms of costs and rates.’[1]

‘Buy-to-let investors can still take advantage of some good savings and low rates when compared to this time last year, however, the mixed and marginal movement in costs over the past three months could be seen as a further sign of stability, or even the start of a period of rises,’ Lofthouse added.[1]

[1] http://www.propertyreporter.co.uk/finance/btl-sector-shows-further-signs-of-stability.html