Posts with tag: rental properties

BPF calls for tax change to improve build to rent sector

Published On: October 17, 2016 at 11:05 am

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The UK has seen an increase in the number of build to rent homes over recent times. However, with demand for rental properties showing no signs of slowing, more needs to be done, according to the industry.

Latest figures released by the British Property Federation show that during the past year, the total number of build to rent units with planning permission, under construction or completed rose to 67,000. This represented an increase of more than 200%.

Rises

More properties are being constructed in regions that have seen a rise of nearly 400% from the 7,000 units seen in October 2015 to 34,000 one year on. Despite this, the British Property Federation believe more homes could be delivered.

At present, the Federation points out that renters have around £50bn to invest and are looking for stable income in sectors unaffected by Brexit uncertainty.

In order to create more growth, the British Property Federation has called for the Government to make changes to the stamp duty alterations made last year.

As part of the Autumn Statement, the Federation wants the Chancellor to introduce clearer national planning for build to rent developments. Additionally, the firm wants to allow flexibility on space standards by up to 10%.

BPF calls for tax change to improve build to rent sector

BPF calls for tax change to improve build to rent sector

Rental Homes

Melanie Leech, chief executive of the British Property Federation, noted: ‘The build to rent sector has been one of the good news stories of the housing market over the past few and it is great to see quality rental homes now coming on to the market at scale.’[1]

‘The truth is the sector could be delivering so much more, however, if it can find the opportunities and maintain confidence to invest. The Brexit negotiation period provides a window of opportunity to channel even further investment into this form of housing supply,’ she continued.[1]

Leech also observed: ‘The sector was kick started a few years ago with support from Government and further modest planning and stamp duty changes we believe could firmly send it into overdrive.’[1]

[1] http://www.propertywire.com/news/europe/property-industry-wants-tax-change-boost-build-rent/

 

Residential rental growth in the UK slows during September

Published On: October 7, 2016 at 8:48 am

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Residential rental growth in Britain is easing slightly, according to the latest Landbay Rental Index.

Rents rose marginally, by 0.09%, during the last month. This was down from the 0.12% recorded during August.

Ups and downs

Overall, rental prices were up by 1.65% year-on-year, taking the average monthly rental cost to £1,187.

In London however, rents slipped by 0.04% month-on-month, meaning average monthly rents in the capital are now £1,891.

North of the border, monthly rents grew by 0.21% in the month and by 1.79% year-on-year. Rents in Scotland are now £720 per month. In Wales, rents increased by 0.08% over the month and 1.34% year-on-year to hit £632.

English rents increased slightly by 0.09% month-on-month and 1.66% year-on-year. Rents here are now £1,219 per month.

One-bedroom rises

A further analysis of the figures indicates that rents for one bedroom properties are rising, as rental demand for smaller rental properties remain buoyant. For the UK as a whole, Scotland saw the largest growth for one-bedroom properties, with rents up by 0.36%. This was closely followed by the East of England (0.35%) and the East Midlands (0.29%).

John Goodall, chief executive officer of Landbay, believes the figures make for interesting reading. Housing Minister Gavin Barwell has called for lower minimum space requirements for new build homes.

Mr Goodall said: ‘Housing has been high on the political agenda this week and it seems that policy makers are resolute in their ambitions to make home ownership more affordable for people across the UK. There’s no denying most people aspire to own their own home, but it’s critical that efforts to bolster the countries housing stock don’t overlook the importance of the buy-to-let market for a supportive and sustainable housing market.’[1]

Residential rental growth in the UK slows during September

Residential rental growth in the UK slows during September

Buy-to-let importance

‘The fact remains that those building up toward a house purchase rely on a well-served buy to let market to ensure that excessive rental growth doesn’t dampen their purchasing power. The challenge is exacerbated by record low interest rates, which may make mortgage borrowing cheaper for those able to buy a home, but also mean that house prices, and indeed rents, are growing more quickly than the money they have saved in bank and building society accounts,’ Goodall explained.[1]

‘The overall picture is one of moderating rents, which is good news for those in shared accommodation, but an under supply of one bed properties will continue to restrict the ability for aspiring home owners to save up for a house of their own,’ he concluded.[1]

[1] http://www.propertywire.com/news/europe/rental-growth-uk-residential-market-slowing-latest-index-shows/

 

Industry Professionals Support RICS’s Call for More Rental Homes

Published On: October 5, 2016 at 8:32 am

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Following yesterday’s call from the Royal Institution of Chartered Surveyors (RICS) for the Government to address the shortage of rental homes, industry professionals have spoken out in support.

The RICS insisted that the Government should reconsider its 3% Stamp Duty surcharge for buy-to-let landlords, as the additional tax is hindering investment in the private rental sector.

Industry Professionals Support RICS's Call for More Rental Homes

Industry Professionals Support RICS’s Call for More Rental Homes

Finance specialist Paul Mahoney, of Nova Financial, agrees: “RICS has taken the words out of my mouth in recommending that the Government reverse the recent Stamp Duty changes for second properties and in fact incentivise build-to-rent supply in a vastly under supplied market. I will go one step further and call on the Government to incentivise buy-to-let investors to buy new build and off-plan properties and further boost supply.

“The Australian government has implemented depreciation tax benefits on new build properties, which has successfully boosted investment and supply driven by both local and overseas investors. Furthermore, the Australian government has restricted overseas investment in property to only new builds; why has this not been considered in the UK? We need to stop vilifying landlords and recognise them as a key part of the funding required for new housing supply.”

Additionally, London chartered accountant Blick Rothenberg LLP has detailed the changes it believes the Government should introduce in order to increase the supply of rental homes.

It believes that a temporary capital taxation relief should be implemented in order to incentivise landowners and developers to increase the supply of affordable housing.

A partner at Blick Rothenberg, Frank Nash, explains: “RICS is pushing to loosen tax rules on the buy-to-let market, and go even further by suggesting pension funds could be engaged to provide large scale housing schemes. This added pressure puts the Government in a difficult position, given their pledge to ensure younger generations become owner-occupiers rather than renters.

“We could use the tax system to boost the supply of affordable housing by temporarily reducing Capital Gains Tax, Corporation Tax and Stamp Duty Land Tax on development land, where affordable housing quota is met. Housebuilders and landowners are motivated to achieve competitive returns, and tax savings would incentivise them to work with local authorities and meet their affordable housing targets without degrading the competitive returns provided through private house sales.”

Just days after the Chancellor and Communities Secretary pledged to put housing ahead of the deficit, Nash added: “There are too many prospective homeowners chasing too few properties and competing with the private rental sector.

“Temporary tax exemptions on the disposal of land for housing should inject a new supply dimension into the housing market, but these reliefs should be conditional upon achieving a minimum percentage of affordable homes within a given timeframe, in line with each local authority’s own affordable housing targets.”

London Lettings Market “Strongest Ever” Despite Brexit, Reports Estate Agent

Published On: September 21, 2016 at 9:06 am

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The London lettings market has recorded its “strongest ever” month, despite forecasts of a prolonged Brexit slump following June’s referendum result, reports estate agent Douglas & Gordon.

London Lettings Market "Strongest Ever" Despite Brexit, Reports Estate Agent

London Lettings Market “Strongest Ever” Despite Brexit, Reports Estate Agent

A 31% annual surge in revenue from lettings in August broke the firm’s record for monthly income. Along with recording a 12% increase in new tenancies, Douglas & Gordon experienced a 20% jump in enquiries from relocation letting agents, working on behalf of large international firms with bases in London.

The sharp growth seen in August suggests that the capital may have avoided a mass exodus of top foreign companies, says the firm.

Douglas & Gordon has also witnessed a marked change in the working patterns of employees from overseas firm. Contrasting to previous years, the majority of corporate lettings enquiries are for properties outside prime central London, with relocation teams preferring the lower rent prices of emerging prime areas, such as Clapham, Southfields and Battersea, where rents range from £650-£1,200 per week.

Overseas workers are also living in flats rather than houses, reports the estate agent, which suggests an end to the traditional package of relocating an entire family.

Rather than renting four-bedroom houses in central London, firms are now offering employees one-bed flats in emerging prime areas, with the option of commuting home for a long weekend.

The Director of Lettings at Douglas & Gordon, Virginia Skilbeck, comments on the data: “The fact we have had a fifth more relocation lettings enquiries this year compared to August last year shows that companies are still moving people in London. We’ve seen some interest from Americans, but it’s mainly Europeans – French, Germans and Italians.

“Landlords who were holding their breath before the referendum are now coming back to the market and the vote initially sparked uncertainty from house sellers too, many of whom are viewing renting as a good stop-gap while they decide what to do.”

She continues: “That’s led to high stock levels in the lettings market, so flexibility is crucial for both landlords and tenants, as both parties may want a six or nine-month break clause to keep their options open.

“Landlords also need to be realistic about rental rates. If a property is priced correctly, then it will see the demand, but if it’s too expensive then tenants have plenty of other properties to choose from.”

This guide will help you set the right rent price for your property: https://www.justlandlords.co.uk/news/setting-perfect-rent-price-property/

With the London lettings market looking strong, will the capital defy expectations from industry professionals and remain robust in the face of Brexit?

Record Best Rental Market in Some UK Regions in August

Published On: September 16, 2016 at 8:37 am

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Although many parts of the country have experienced declines in the lettings sector over the past month, some UK regions have seen record best performances in the rental market for August.

The findings from Agency Express’ Property Activity Index found that the rental market experienced declines across the UK on a monthly basis, although the lettings sector remains robust year-on-year.

Record Best Rental Market in Some UK Regions in August

Record Best Rental Market in Some UK Regions in August

Traditionally, the UK rental market sees a slowdown in activity over August, and last month was no different. New listings to let dropped by 4.1% and properties let by 1.9%.

However, Agency Express’ historical data shows that the decreases seen this year were considerably less than those recorded in the same month last year, when new listings fell by 13.2% and properties let by 9.2%.

Just four of the 12 regions recorded in the Property Activity Index saw a rise in new listings, while three experienced increases in the number of properties let.

August’s top performing region was East Anglia, which saw growth in both new listings, at 1.1%, and properties let, at 6.1%.

A buoyant rental market was also seen in the North East, where properties let rose by 20.2%. Looking back at Agency Express’ historical data, the figures seen in East Anglia and the North East were record bests for the month.

Other regions that bucked the seasonal trend include:

New listings to let  

  • Wales: +15.3%
  • South East: +3.7%
  • South West: +2.3%

Properties let 

  • London: +5.9%
  • South West: -0.4%

The greatest decreases in August were seen in central England. New listings to let fell by 16.2%, while the amount of properties let dropped by 9.2%. Again, the decline in new listings is lower than that recorded in 2015, when they were down by 21.7%.

Stephen Watson, the Managing Director of Agency Express, comments: “This month, the UK rentals market has seen some seasonal decline, but our data shows this to be less than in years previous. This year, we have seen more regional growth, with areas reporting their record best increases in new listings, whereas in 2015, only one region reported an increase – Wales at 3.4%. As we collate September’s data, we would expect to see a spike in activity once again. Last September, new listings sat at 4.2% – this year we’d hope to see a larger increase, based in current activity.”

Manchester Mayoral Candidate Calls for Homes for All

Published On: August 18, 2016 at 10:52 am

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As part of his plan to create homes for all, Manchester mayoral candidate Andy Burnham has called for councils to receive a fund to help them purchase private rental homes in a poor state of repair.

The Labour MP also pledged to introduce a licensing scheme for private landlords across Greater Manchester, and gain powers to regulate rent rises and property standards, if he is elected as mayor.

In a blog for Inside Housing magazine, Burnham proposed measures to tackle the housing crisis and drive out the “scourge of absent, private landlords that bedevils much of Greater Manchester”.

Manchester Mayoral Candidate Calls for Homes for All

Manchester Mayoral Candidate Calls for Homes for All

Burnham suggests that councils should be provided with loan finance to buy out private landlords if they believe they are not keeping their properties up to the decent homes standard.

His plans for a community buy-back fund would “have a number of benefits”, he says.

He explains: “First, it will quickly expand public housing stock. Second, it will bring rents down to an affordable level. Third, it will enhance the ability of councils to turn around struggling neighbourhoods. Fourth, it will bring down the housing benefit bill.”

However, the Head of Policy, Public Affairs and Research at the National Landlords Association (NLA), Chris Norris, has hit back at the suggestions of rent controls and licensing scheme.

“What is disappointing is the almost immediate reversion to policies of intervention and control, which are both outmoded and proven to fail,” he says. “The people of Greater Manchester deserve better than promises to seek powers to cap rents and drive investment from the area by licensing the good and well-meaning whilst the criminally negligent continue to ignore the law.”

But Norris adds that Burnham was “right to recognise the paramount importance of having a home” and to create homes of different tenure.

He seemed to applaud the policy to buy out rogue landlords, but is cautious: “We might question whether the local community will thank Mr. Burnham for effectively rewarding the poor and sometimes criminal performance of bad landlords with a golden handshake.”

Norris suggests that Burnham may be better to work with good landlords in Manchester and ensure they are “treated like the valuable part of the community they are, so they could help lead the local buy-back he so desires”.

Burnham also wants to increase council and social housing across Greater Manchester’s ten boroughs by extending the £300m housing fund to pay for these homes. Currently, the fund is limited to commercially-led housing development.

He believes that the majority of the fund should help provide loans and guarantees to councils and housing associations to build more affordable homes to rent.

“A small proportion of the new homes will be designated rent-to-own; available on a long-term lease to people under 35, and giving hope of homeownership to generation rent,” he states.

The Manchester mayoral election will be held in May 2017. Burnham’s opponents are yet to be announced.