Posts with tag: Buy-to-Let

Has the UK housing market plateaued?

Published On: August 11, 2017 at 1:11 pm

Tags: Buy-to-Let,property market,UK housing market

An interesting outlook analysis repot has revealed that the UK housing market could have plateaued, with lending and activity staying flat since the beginning of the year.

The report from UK Finance suggests that buyers and sellers alike are starting to tighten their belts- something that could become more acute if the economy deteriorates.

Interest-rates

A number of Bank of England monetary policy committee members have recently voiced their opinions that interest rates should be raised. However, a rate increase does seem unlikely in the short-term at least.

The report explains: ‘The economic backdrop helps colour what has been happening in the housing markets, as the two are closely linked. The housing market has reached a plateau, as activity and lending have been flat since the start of the year. It is possible that we see a slowdown in activity if economic conditions become more challenging.’[1]

UK Finance argues that the plateau is illustrated by property transactions averaging just over 100,000 per month for the last few months. A recent weakening in house purchase approvals could spell less transactions in the months ahead.

Has the UK housing market plateaued?

Volatility

Buy-to-let has seen more volatility, unsurprising given the raft of tax changes introduced last year. Despite buy-to-let remortgage activity growing until recently, the last two months has seen this trend reversed.

Remortgaging has experienced growth amongst homeowners, driven by market share objectives. This had led to intense competition between lenders.

‘Despite all these moving parts, total lending in the mortgage space continued to be stable and was estimated to be £19.9 billion in June, on a seasonally adjusted basis. On an unadjusted basis, lending was £22.1 billion. Over the last 12 months, lending has averaged just over £20 billion a month.’

‘Home owner remortgage activity and first time buyers have driven lending for some time now. We expect this to continue, but perhaps not as strongly as has been the case of the last few years, as the factors supporting them are dampened by a challenging economic outlook,’ the report concludes.[1]

[1] http://www.propertywire.com/news/uk/uk-housing-market-reached-plateau-analysis-suggests/

More calls for Stamp Duty to be amended

Published On: August 11, 2017 at 11:11 am

Author: Em Morley

Categories: Property News

Tags: Buy-to-Let,housing market,property,Stamp Duty

Another report has called for improvements to the existing Stamp Duty regime, in order to substantially improve the number of housing transactions across England and Wales.

Alterations that came into force in April 2016 saw an additional 3% stamp duty surcharge added on buy-to-let and second property purchases over £125,000. This adds thousands of pounds to fees, particularly in London and the South East.

Investors can see Stamp Duty fees run into tens of thousands – making the existing housing crisis far worse.

Deterrent

Present rates of Stamp Duty are putting older buyers off downsizing and stopping more homes coming onto the market for those at the bottom of the housing ladder.

Research from the London School of Economics and the VATT Institute for Economic Research suggests that levels of moving could increase by a quarter if the tax was to be scrapped.

More calls for Stamp Duty to be amended

Professor Christian Hilber, co-author of the report, observed: ‘The key message is that stamp duty hampers mobility significantly, it create a mismatch and distortions in the housing market. Our analysis suggests that mobility would be 27% higher if stamp duty was abolished or replaced with an annual tax on the value of property.’

‘If you are a young family and you have an additional child, you’ll need an additional room, but the stamp duty is discouraging this kind of move because of the additional cost and lack of available homes to move into.’[1]

[1] https://www.propertyinvestortoday.co.uk/breaking-news/2017/8/cut-stamp-duty-to-free-up-mobility-says-report

New survey suggests landlords remain confident in the sector

Published On: August 11, 2017 at 8:51 am

Author: Em Morley

Categories: Landlord News

Tags: Buy-to-Let,landlords,landlords confidence,tenants

The Government’s implementation of a number of regulation changes aimed at curbing the rise of private landlords has left many concerned that buy-to-let investment could fizzle out.

As a result of the changes, the number of people investing in the sector has slipped over recent months, with experts forecasting that more landlords will exist the market in the near future.

Confidence

Despite the tax assault on the private rental sector, the fact remains that bricks and mortar provide a safe long-term investment for savvy landlords.

A new survey of 500 buy-to-let landlords from Knight Knox reveals that 59% are still confident in renting out buy-to-let property. Surprisingly, only 11% said they had lost confidence in buy-to-let, while 30% are unsure.

In addition, half of respondents to the survey said that they intend on adding to their portfolio in the next five years.

New survey suggests landlords remain confident in the sector

Andy Phillips, Commercial Director at Knight Knox, noted: ‘The results of our survey would suggest that, despite ostensibly damaging changes to the market over the last few years, landlords remain positive about the returns this asset class can generate. Bricks and mortar is likely to remain one of the most stable investment options and has so far weathered the changes brought in by new legislation.’

‘Close to six million properties in the UK are now in the private rented sector, with this expected to rise to 7.2 million by 2025, which is the equivalent of a quarter of all homes. With this sort of opportunity, and with property prices continuing to rise, investors could potentially benefit from both regular rental income over the years and capital appreciation when the time comes to sell.’[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2017/8/landlords-remain-positive-about-buy-to-let-market

More people coming to rely on private rental sector

Published On: August 10, 2017 at 8:52 am

Author: Em Morley

Categories: Property News

Tags: Buy-to-Let,Generation Rent,government,renters,tenants

A new investigation has revealed that a generation could be priced out of the housing market, with homeownership levels set to slide further out of reach for younger people.

The survey of 2,000 UK adults from LetBritain indicates that 39% of UK adults lack the sufficient finances required in order to obtain the type of property that they currently want. As a result, they are forced into the rental market.

For those in London, this figure rises to 49%.

Generation Rent

The majority of renters questioned said that they blame the Government for not showing enough support to their efforts to get onto the property ladder. 61% said they felt the Government wasn’t doing enough to support Generation Rent, with 64% saying that they feel life will get worse for renters during the next five years.

In order to combat this, 27% of tenants said that they have plans to invest in the buy-to-let sector, by investing in a cheaper property in an alternative location from where they wish to live.

This was particularly common amongst Londoners, with 42% of people in the capital stating they would buy a property in another part of the UK, in order to benefit from another rental income.

More people coming to rely on private rental sector

Reliance

Fareed Nabir, CEO of LetBritain, observed: ‘With more and more people across the UK coming to rely on the private rental sector, the results of the research are concerning. Whilst many renters are working hard to enter the property market, they clearly do not feel the government understands the issues faced by tenants.’

‘Interestingly, the findings show that Generation Rent is now increasingly looking to buy properties outside of their chosen place of residence so they can still get onto the property ladder without having to sacrifice the location or quality of the property they wish to live in,’ Nabir added.[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2017/8/a-growing-number-of-people-are-coming-to-rely-on-the-private-rental-sector

Are more landlords needed to cater to demand?

Published On: August 9, 2017 at 8:39 am

Author: Em Morley

Categories: Landlord News

Tags: Buy-to-Let,Homes,landlords,property

The most recent forecast from the Office for National Statistics suggests that there will be a rise of 8.4 million in the population of Britain during the next 22 years.

This could well spell more bad news for people trying to get onto the property ladder and will lead to the need for yet more properties available to let.

Supply/Demand Imbalance

A large supply/demand imbalance in the property market is set to continue, driving property prices up further in the medium to long-term.

As such, there are growing calls for the Government to reverse many of the anti-landlord measures imposed in recent years, such as the scrapping of wear and tear allowance and increases to stamp duty.

Jonathan Stephens, Managing Director of Surrenden Invest, noted: ‘Whilst it’s wonderful that we can all enjoy a longer life and a larger population can positivity impact the size and capability of those of working age, it does also increase pressures on basic requirements such as housing – namely, where will we all live?!.’

Are more landlords needed to cater to demand?

‘Successive governments’ record of building enough homes to meet demand we know has and remains woeful with the creation of new homes, especially within the private rented sector which is growing rapidly, being funded more and more by individuals and private institutions. With population forecasts such as these, it would seem wise for landlord investors to be encouraged, not penalised through stamp duty reforms and tax hikes as we have seen over the past 18 months.’[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2017/8/more-btl-landlords-needed-to-meet-demand-from-a-growing-population

Landlord fined for gas safety negligence

Published On: August 2, 2017 at 11:53 am

Author: Em Morley

Categories: Landlord News

Tags: Buy-to-Let,gas,gas safety,landlords

A private landlord with a rental property in Haverfordwest, Pembrokeshire has been prosecuted, after failing to maintain gas appliances in his rental property.

Mr Gous Ahmed was found guilty at Llanelli Magistrates Court of breaching Regulation 36 (1) of the Gas Safety (Installation and Use) Regulations 1998. As a result, he was given a fine of more than £15,000 and ordered to pay costs of £2,500.

Dangerous

The rental property in Haverfordwest was inspected by British Gas in February 2015. On this inspection, British Gas found the boiler and fire to be ‘immediately dangerous,’ with the tenants in the property at imminent risk of potential harm.

Upon further investigation, the Health and Safety Executive found that Mr Ahmed had not obtained the sufficient Landlord Gas Safety Record for his rental property.

Landlord fined for gas safety negligence

Despite improvement enforcement action carried out by the Health and Safety Executive and a number of letters from various council officers, the landlord still failed to obtain the relevant Gas Safety Record.

After the case, Health and Safety Executive inspector Simon Breen, noted: ‘Mr Ahmed put the residents and other members of the public at risk of harm by failing to maintain gas appliances in the domestic property. Landlords and duty holder must ensure they obtain a Landlord Gas Safety Record and they maintain all gas appliances in accordance with the law.’[1]

Landlords should be sure to download our guide to Gas Safety, available in the guides section of our website.

[1] https://www.landlordtoday.co.uk/breaking-news/2017/7/landlord-fined-for-gas-safety-breaches