Posts with tag: investment

27% of landlords unaware of tax changes

Published On: March 16, 2016 at 12:23 pm

Tags: Buy-to-Let,investment,landlords,Property Partners,residential landlords,Stamp Duty,tax

A concerning new investigation by property crowdfunding platform Property Partner suggests that nearly a third of landlords are unaware of the upcoming tax changes.

27% of residential landlords surveyed by the website said that they had limited or no awareness of the tax changes that are just around the corner.

This worrying statistic comes just two weeks before the increases in stamp duty on buy-to-let property purchases come into force. What’s more, today’s Budget is likely to include yet more changes to the sector.

Division

Further data from Property Partners’ study shows that 59% of current landlords are putting plans for further investment on hold. The remaining 41% said that they are firmly committed to investing in buy-to-let property.

38% said that their investment methods would change, with them still investing in residential property, but through crowdfunding platforms.

Dan Gandesha, chief executive of Property Partner, said, ‘on the evidence of our research, landlords are deeply divided over how to respond to the Government’s clampdown on buy-to-let.’[1]

‘A significant minority are desperately buying up available stock to beat the April stamp duty deadline, causing a surge in prices. Do these people really understand how the government’s tax changes will impact their profits?’ he questioned.[2]

27% of landlords unaware of tax changes

Cautious

Gandesha went on to say that, ‘luckily the majority of landlords are taking a much more cautious view, with many choosing Property Partner as a better way to access residential property investment, without the hassle, expense or tax implications.’[2]

[1] https://www.lettingagenttoday.co.uk/breaking-news/2016/3/third-of-landlords-still-unaware-of-industry-tax-changes

[2] http://www.gainsboroughstandard.co.uk/news/property-news/more-than-half-of-landlords-plan-to-stop-investing-in-traditional-buy-to-let-1-7790803

Prepare your property properly!

Published On: March 4, 2016 at 11:52 am

Author: Em Morley

Categories: Property News

Tags: Buy-to-Let,buy-to-let property,investment,landlords,property,rents

Becoming a buy-to-let landlord requires a lot of preparation. As the saying goes, failing to prepare means preparing to fail!

There are a number of ways in which landlords can prepare their property to make it available to rent. Making sure this is done properly will help in securing a quality tenant and the desired rental return.

Presentable

Allison Thompson, lettings director at Leaders, said, ‘presenting a home to rent in an appealing way, with quality fixtures and fittings, is a must for attracting good tenants and getting the best possible rent.’[1]

‘But it can be expensive and time-consuming so landlords need to find the right balance between short-term costs and long-term gains. Over the years Leaders has guided thousands of landlords in preparing their properties for letting in a way that will help them to secure and keep good tenants and maximise their returns while saving time and money in the long run,’ she continued.[1]

As such, here are some to tips to help landlords prepare their investment properly:

Don’t over décor-By sticking to neutral colours throughout the property, a home will appeal to all tenant groups. High-quality paints are the sensible option, as it will last for longer, meaning landlords will have to redecorate on a less regular basis. Doorstops are also a savvy choice, to protect walls from being damaged by doors handles.

Fit similar flooring- Fitting the same carpet or flooring in as much as the property as possible should ensure a discount for buying in bulk. What’s more, by keeping quantities aside, damaged areas can be easily replaced.

Prepare your property properly!

Keep the kitchen modern- A clean, modern kitchen will undoubtedly attract better tenants and a higher rent. Being the creative hub of the home, a well-thought out kitchen will go a long way in attracting the right people. Choose standard shapes and tiles for the worktops, which again can easily be replaced should they become damaged.

Boss the bathroom-There are a number of things that can be done to heighten the appeal of a bathroom. Installing a power shower or heated towel rails for example could be the little features that make all the difference. Again, installing a modern, stylish floor and features can also prove vital. Just don’t install a carpet!

Build the bedroom-Providing built in wardrobes in bedrooms is becoming more and more a required element for tenants. This will also save on having to buy and replace standalone wardrobes in case of damage. Allow tenants to add their own stamp to the room and the property as a whole.

[1] http://www.propertyreporter.co.uk/landlords/top-money-saving-tips-for-landlords-preparing-a-property-to-let.html

Concerns aired over buy-to-let competition

Published On: February 26, 2016 at 12:06 pm

Author: Em Morley

Categories: Finance News

Tags: Buy-to-Let,investment,mortgage approvals,Stamp Duty

With buy-to-let investors rushing to purchase property ahead of the stamp duty changes a little more than a month away, fresh concerns have been aired about the future of the market.

Mortgage approvals hit their highest ever level during January. The British Bankers’ Association revealed that its members approved 27% more loans last month than at the same period last year.

However, additional data from HM Revenue and Customs suggests the number of property sales didn’t keep pace, with a slide in transactions over the previous month.

Stamp Duty Changes

Following Chancellor George Osborne’s announcement of a 3% rise in Stamp Duty Land Tax for buy-to-let investors in the Autumn Statement, buyers have been flocking into the sector.

Ajay Jagota, founder and MD of sales and lettings firm KIS, noted, ‘the start of 2016 has seen a significant rise in mortgage borrowing and it seems perfectly reasonable to attribute that to property investors trying to get in ahead of April’s tax changes.’[1]

‘These changes are not insignificant and will undeniably drive up purchase costs and are also being introduced at the same time as the scrapping of the wear and tear allowance which allows landlords to claim tax relief for keeping their properties in good condition,’ he continued.[1]

Concerns aired over buy-to-let competition

Bottleneck

Mr Jagota observed that, ‘anecdotally the industry is full of stories of a substantial number of homes stalled in the pre-completion stage and even a shortage of solicitors available to carrying out conveyancing.’ He went on to say that, ‘it’s clear we’re seeing something of a competition bottleneck. The real questions are whether or not buyers will persevere with the sales if their transactions are not completed when the tax changes come in. Will they take the hit, or will we see a spate of sales simply abandoned?’[1]

‘It’s more than likely that we will see demand from investors drop off after April, but this is unlikely to have a significant impact on the wider property market as residential buyers, particularly if first time buyers return to centre stage,’ he concluded.[1]

[1] http://www.propertyreporter.co.uk/landlords/btl-investors-warned-of-completion-bottleneck.html

Buy-to-let clampdown beginning to work?

Published On: January 18, 2016 at 2:36 pm

Author: Em Morley

Categories: Landlord News

Tags: Buy-to-Let,first time buyers,investment,landlords,rental market,Stamp Duty

The Chancellor’s clampdown on buy-to-let investment is already beginning to show signs of working, according to new research conducted by Rightmove.

Data released by the property website suggests that more properties have become available to first-time buyers, with prices also slowing. The firm suggests that there has been a 6.6% rise in two-bed flats, popular with this group, over the past year.

Availability

Two-bed flat availability is now at its greatest since 2007, according to the firm. In addition, their research suggests that buy-to-let landlords may be looking to sell their property before changes in tax relief and stamp duty come into effect.

‘With the monthly price increase in this sector at a near standstill, this suggests that some of the dynamics of the changing tax regime for buy-to-let investors are starting to play out sooner than expected,’ said Miles Shipside, director of Rightmove.[1]

‘For several years buy-to-let investors have been enticed by high tenant demand and attractive returns,’ he continued, before saying, ‘as their window of opportunity starts to close it already appears to be opening wider for first-time buyers.’[1]

Buy-to-let clampdown beginning to work?

Changes

During the summer, Chancellor Osborne slashed tax reliefs for buy-to-let landlords and went on to increase stamp duty on investment and ‘second’ homes in the Autumn Statement.

Prices in the mainstream market continued to rise, with Rightmove’s data suggesting the cost of a property coming to market was up by 0.5% in January, in comparison to December. In addition, demand on the Rightmove website in the first week of 2016 was up by 21% on the same period in 2015.

However, there was little in the way of relief for struggling tenants, with separate analysis by Countrywide suggesting rents rose by 3.1% in 2015. Company research director Johnny Morris said that, ‘2016 looks to be a complicated year for landlords,’ with the, ‘additional 3% stamp duty charge, stricter regulation and changes to tax relief from 2017 onwards will all take their toll on investor sentiment and impact behaviour.’[1]

‘With stock at a premium, the smaller landlords who decide to sell up will add upward pressure to rents although any rises will be tempered by affordability pressures,’ Morris added.[1]

[1] http://www.theguardian.com/business/2016/jan/18/jump-two-bed-flats-for-sale-landlords-selling-up?CMP=share_btn_tw

Where are the Northern hotspots for BTL investment in 2016?

Published On: January 13, 2016 at 12:10 pm

Author: Em Morley

Categories: Landlord News

Tags: Buy-to-Let,investment,landlords,northern England,Stamp Duty

2016 looks to be a busy year for buy-to-let investment in the North of England.

Recently, Rightmove.com predicted that the average price of a property in London could increase to a cool £1m later this year, on the back of high demand, cheap mortgages and lack of accessible housing.

Savvy

Differing trends in the market, coupled with upcoming legislation changes mean that savvy investors could save significantly by purchasing lower entry real estate properties in the North.

Lower house prices, increased yields and extortionate southern property prices are all leading the North of England to become a prime location for buy-to-let landlords looking to expand their portfolio.

What’s more, the lucrative student market is also continuing to thrive, with many of the UK’s most popular universities located in northern regions.

Location, location, location

Experience Invest has moved to highlight the top 5 northern cities, where buy-to-let and student property investment is set to thrive in 2016:

Liverpool

The Merseyside city has notoriously been a location for high rental income for a number of years, offering some of the greatest returns in Britain. 25,000 purpose built student rooms have been promised by 2017, therefore there is set to be a lot of potential for prudent landlords.

Manchester

At the centre of the Northern Powerhouse Scheme, Manchester is arguably the best northern location in which to invest. A growing population means there is increased demand for housing, from tenants and investors alike. The east and north of the region have good rental yields lower priced properties.

There are also 105,000 students currently attending four major universities in the city, again giving landlords plenty of demand for accommodation.

Newcastle

Offering favourable returns, the North East has often been seen as a lucrative investment area for buy-to-let. Yields of 9% are regularly achieved in central Newcastle, in comparison to a nationwide average of 6%.

Once more, student population in this city is thriving. Since 2008, a further 11,000 student rooms have been given the go ahead to accommodate demand.

Where are the Northern hotspots for BTL investment in 2016?

Sheffield

Benefiting from a large renovation in the previous ten years, the Steel City is now firmly back in contention as a top investment location. Boasting a young population, Sheffield’s rental property is being taken far quicker than supply becomes available.

The city has one of the cheapest tram networks in the country, has the superb Meadowhall shopping complex and a thriving music scene. 60,000 students attend the city’s two universities and formerly being one of them, your author can confirm that Sheffield is the place to be!

Leeds

As the 3^rd biggest city in the UK, Leeds is undoubtedly popular amongst investors. With an expanding population, the city has seen more and more students congregate in Headingly and Hyde Park on its outskirts.

In the centre, former warehouses and Victorian terraced buildings are interspersed with more modern apartment blocks and offices. Despite being a popular location, house prices are nowhere near those seen in the capital.