Posts with tag: Buy-to-Let

Many landlords still not prepared for Right to Rent

Published On: January 24, 2016 at 11:49 am

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A concerning new report has indicated that only half of UK landlords are ready for the Right to Rent rollout, which is set to come into effect in less than 2 weeks (February 1st).

Urban.co.uk conducted a survey of 5,000 landlords and found that 20% wrongly believed that they had until April 2017 to prepare for the changes. 3% thought they had until 2018!

Knowledge

These alarming findings were part of Urban.co.uk’s Landlord Knowledge Survey Report, which questioned landlords on issues relating to the leasing market.

With a number of new legislations coming into play in 2016 and landlords’ responsibilities growing, the investigation provided cause for concern.

Key findings from the report include:

  • just 10% of landlords provide the correct information to their tenants at the start of a new tenancy
  • 90% of landlords could not articulate the characteristics of a HMO
  • 16% did not put a valid contact address on their tenancy agreements, something which could deem contracts being null and void

‘There has been an influx of new legislation relating to the rental market made in recent years and we know that UK landlords are struggling to keep on top of these changes,’ noted Adam Male, Co-Founder or Urban.co.uk. ‘Despite knowing many of the basics, many find it difficult to navigate the minefield of changing renting rights and wrongs and this is particularly so for accidental landlords.’[1]

Many landlords still not prepared for Right to Rent

Many landlords still not prepared for Right to Rent

Reassuring

Despite this perceived lack of understanding in some areas, thankfully, most landlords were found to be knowledgeable of most other rental issues. 77% were aware of the up-to-date Energy Performance Certificate requirements, with 95% of landlords able to identify their gas safety responsibilities.

76% of respondents knew their smoke alarm requirements, with 7% saying they put one in every room.

According to the research, the most knowledgeable landlords are located in Southampton, with the least located in Newcastle-under-Lyme.

Male went on to say, ‘it’s great to hear that knowledge about things such as gas safety is widely understood and implemented landlord legislation, however there is still a long way to go in educating landlords about the varying aspects of renting. New regulations such as the Right to Rent have the potential to stop back door lettings and create a better environment for all, however this will only happen if the scheme is communicated to landlords properly. We as an organisation want to do our bit to clean up the industry and help landlords protect themselves from significant financial risk.’[1]

[1] http://www.propertyreporter.co.uk/landlords/are-landlords-prepared-for-%C3%A3%C2%A2%C3%AB%C5%93right-to-rent%C3%A3%C2%A2%C3%A2%E2%80%9E%C2%A2.html

£5m pot to tackle rogue landlords announced

Published On: January 22, 2016 at 12:04 pm

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Categories: Landlord News

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The Housing Minister Brandon Lewis has today announced a £5m fund to crackdown on rogue landlords across England.

48 councils will split the cash, which will be used in order to root out irresponsible landlords that force their tenants to live in unsuitable and dangerous properties.

Improving the sector

Additionally, the money will assist councils to conduct inspections, surveys and demolish ‘beds in sheds’ and other prohibited buildings.

Since 2011, almost 40,000 inspections have taken place across the country, with 3,000 landlords served with enforcement actions, statutory notices or prosecutions.

Lewis has provided the funding to try and make sure that millions of hard-working, law-abiding tenants receive a better deal when renting a property.

Tough tackling

Mr Lewis said that, ‘many private rental tenants are happy with their home and the service they receive, but there are still rogue landlords that exploit vulnerable people and force their tenants to live in overcrowded and squalid accommodation.’[1]

‘We are determined to tackle these rogue which is why we are providing 48 councils with extra funding, so they can get rid of the cowboy operators in their area and bring an end to tenants living in miserable homes in the name of profit. We also want to raise the quality and choice of rental accommodation across the sector. The funding will ensure tenants know what level of service they can expect and have confidence to get help and take action if things go wrong,’ he added.[1]

£5m pot to tackle rogue landlords announced

£5m pot to tackle rogue landlords announced

A better buy-to-let sector

The announcement comes as part of the proposals in the Housing and Planning Bill, aimed at ensuring England’s 9 million private sector tenants are given better standards by their landlords.

Included in the Housing and Planning Bill proposals are:

  • a database of rogue landlords and agents convicted of previous offences
  • total banning orders for the most prolific offenders
  • introduction of civil penalties up to £30,000, instead of prosecution
  • a more hardline fit and proper persons test for landlords of licensable properties, such as HMO’s

Councils

A full-run down of the forty-eight councils and how much of the £5m they have been allocated is as follows:

  • Birmingham £110,250
  • Blackburn with Darwen £39,375
  • Blackpool £150,000
  • Boston £74,600
  • Bradford £45,000
  • Bristol £135,000
  • Burnley £18,200
  • Calderdale £100,000
  • City of Lincoln £96,071
  • Cornwall £127,500
  • Croydon £15,000
  • Derby £13,161
  • Ealing £150,000
  • Fenland £44,500
  • Hastings £122,734
  • Hyndburn £112,500
  • Ipswich £56,250
  • Islington £112,500
  • Lambeth £90,000
  • Leeds £70,000
  • Lewisham £151, 378
  • Liverpool £112, 500
  • London Borough of Barking and Dagenham £250,000
  • London Borough of Brent £295,000
  • London Borough of Enfield £360,000
  • London Borough of Hackney £36,400
  • London Borough of Hammersmith and Fulham £91,000
  • London Borough of Haringey £100,000
  • London Borough of Hounslow £67,500
  • London Borough of Newham £428,241
  • London Borough of Southwark £31,200
  • London Borough of Tower Hamlets £100,000
  • London Borough of Waltham Forest £225,000
  • Luton £94,000
  • Manchester £60,000
  • Middlesbrough £100,000
  • Newcastle £70,000
  • North East Lincolnshire 64,250
  • Nottingham £151,079
  • Pendle £22,500
  • Peterborough £112,500
  • Plymouth £60,000
  • Royal Borough of Greenwich £175,000
  • Salford £63,952
  • Slough £90,000
  • Thanet £88,737
  • Kensington and Chelsea £91,000
  • Torbay Council £90,000

[1]

[1] https://www.gov.uk/government/news/5-million-cash-for-councils-to-stop-rogue-landlords

 

18% of landlords will leave sector due to tax changes

Published On: January 22, 2016 at 10:04 am

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A concerning new survey has indicated that the majority of landlords believe that the Government’s perceived assault on the buy-to-let sector will lead to serious market damage.

Research conducted by property management group Orchard and Shipman suggests 90% feel that the tax hikes will bring about higher rents. This was based on a survey of 500 landlords.

Leaving

Further results indicate that one quarter of landlords will sell their properties as a direct result of the changes, with 18% saying that would have to leave the sector altogether.

In addition, the research shows that over 90% of landlords think that they should be able to deduct legitimate costs from rents. This was found to be one of the main issues with the Government’s proposals to limit mortgage interest tax relief for the more higher-taxed landlords.

Committed

Over half of the landlords surveyed said that they would increase rents over the course of 2016, to cover the increased financing costs.

However, Orchard and Shipman thinks the Government’s ambition to thwart the buy-to-let sector may yet come up short.

18% of landlords will leave sector as result of tax changes

18% of landlords will leave sector as result of tax changes

‘Many landlords and property investors are committed and passionate and will do whatever it takes to protect their interests. Our research shows that the majority of landlords are looking at ways to recover the potential drop in revenue,’ noted Shane Spiers, chief executive of the firm.[1]

‘I believe that the buy-to-let market will pull together to ensure it continues to provide much needed accommodation to meet growing tenant demand,’ he added.[1]

[1] http://www.propertyreporter.co.uk/landlords/will-the-governments-tax-changes-discourage-btl-investment.html

 

 

 

Lettings director hails Osborne’s work on PRS

Published On: January 21, 2016 at 10:14 am

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A lettings director of a leading firm has hailed the Chancellor’s work on the private rental sector.

Marc von Grundherr, director of Benham & Reeves Residential Lettings, believes George Osborne has done more for the rental market in Britain than any other chancellor in history.

Attractive

Mr von Grundherr said, ‘thanks to the changes in stamp duty rates, he has made renting long term a more attractive option for many tenants. Couple that with the fact that many overseas tenants can write their rent off against tax but must pay capital gains on any property they own and renting becomes a no brainer.’[1]

Lettings director hails Osborne's work on PRS

Lettings director hails Osborne’s work on PRS

He said that his company are, ‘advising landlords who are already in the market to hang onto the properties and not be tempted to sell ahead of changes to wear and tear allowance and mortgage relief.’[1]

Continuing, von Grundherr noted that, ‘many nervous investors will leave the market and when they do, supply will be limited even further. The rent increases that will inevitably result will more than mitigate landlords’ extras costs.’[1]

[1] https://www.lettingagenttoday.co.uk/breaking-news/2016/1/rent-rises-will-outstrip-buy-to-let-tax-rises-predicts-agency-chief

 

Carney suggests interest rate rise is not imminent

Published On: January 20, 2016 at 10:10 am

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Categories: Finance News

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In seemingly positive news for buy-to-let landlords and mortgage holders, the governor of the Bank of England has moved to rule out an immediate rise in interest rates.

Mark Carney believes weaker than expected growth in the UK, coupled with ongoing uncertainty in the global economy. He believes that an, ‘unforgiving’ global environment means that more controlled monetary policy was not yet needed.

Backtrack

This assessment from Mr Carney comes just six months after he suggested that an increase in interest rates would come into, ‘sharper relief,’ at the start of 2016.

Many onlookers believed that rates would rise early in this year, bringing relief to savers who have been struggling with record low interest rates since the financial crash of 2007.

However, Carney’s comments suggest that rate rises are now a more remote prospect, with economists now suggesting there will be no change in interest rates until at least the second half of the year.

Carney suggests interest rate rise is not imminent

Carney suggests interest rate rise is not imminent

‘Last summer, I said that a decision as to when to start raising Bank rate would likely come into sharper relief around the turn of the year,’ Carney said in a speech at the Queen Mary University of London. He went on to say that, ‘well, the year has turned and, in my view, the decision proved straightforward-now is not the time to raise interest rates.’[1]

Gradual

Looking to the future, Carney said that any rises in the future would be small and gradual. He said that, ‘it is clear to me that since last summer, progress has been insufficient to warrant a tightening of monetary policy. The world is weaker and UK growth has slowed.’[1]

‘Due to the oil price collapse, inflation has fallen further and will likely remain low for longer. It has always been the case that, because the economy is subject to unforeseen disturbances, the precise path for Bank rate rises cannot be pre-ordained. We’ll do the right thing at the right time,’ he continued.[1]

[1] http://www.bbc.co.uk/news/business-35351217

 

London buyers adapting to upcoming legislation changes

Published On: January 19, 2016 at 2:29 pm

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Categories: Property News

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The turn of the year has seen a surge in activity in the property investment market, as buy-to-let purchasers rush to secure property before the increase in stamp duty takes hold on April 1st.

Activity has been prominent in the capital, with investors in London aware of how much an additional 3% equates to in the most expensive area of the market.

Rewards

‘Buy to live purchasers can’t be blamed for stepping out of the arena for this buy to let mini-bubble,’ said Sara Ransom, director of Stacks Property Search in London. She feels that, ‘their reward is likely to be less punchy prices on the kind of property that lends itself to investment purchase. April will be a good month for non-investment purchasers of new homes where there’s a good chance that discounts of up to 3% will be on the table.’[1]

Ransom notes that, ‘at the lower end of the resale sector, buyers may struggle to negotiate discounts,’ saying, ‘the £300,000-£600,000 market has gone from strength to strength since the new Stamp Duty bands were introduced in the Autumn of 2014. The first time buyer market in areas such as Clapham, Balham and Streatham is buoyant; buyers interested in ex-council apartments in Brixton will have to work hard just to look at one before it’s snapped up.’[1]

London buyers adapting to upcoming legislation changes

London buyers adapting to upcoming legislation changes

Higher value, less competition

Observing that overseas buyers make up a small proportion of buyers than they did two years ago,’ Ransom said that, ‘over £600,000, there’s less competition.’ She went on to say however that, ‘the market is moving steadily and there’s plenty of demand from those upsizing to a second home, with help from the bank of Mum and Dad. But here may be a little room for manoeuvre on price if you do your research, kick hard in the right places and get your timing right. April will be a good month to be negotiating.’[1]

‘Meanwhile, the prime central London market remains in intensive care; its recovery is expected to be a slow and painful. The question is, how will prices fall before people start speculating again?’ she concluded.[1]

[1] http://www.propertyreporter.co.uk/property/what-next-for-london-buyers.html