Posts with tag: RICS

Make landlords exempt from Stamp Duty surcharge to ‘help breathe life into housing market’

Published On: May 5, 2020 at 8:29 am

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landlords exempt from Stamp Duty

Property management company Ringley believes that making buy-to-let landlords exempt from the Stamp Duty surcharge on second homes will help to kickstart the housing market post-coronavirus.

Mary-Anne Bowring, group managing director at Ringley, believes this could boost transactions and increase the supply of available rental properties at a time of growing demand.

The UK private rented sector has grown significantly in size in recent years, jumping from 2.8 million households in 2007 to 4.5 million in 2017, according to the Office for National Statistics. Ringley also highlights that Knight Frank has predicted nearly six million households– approximately a quarter of all households – will be privately renting by the end of 2021.

Despite this demand, the government has introduced regulations that make it more difficult to invest in the private rental sector. High Stamp Duty and reduced mortgage relief are a couple of examples. Now that COVID-19 has caused even more disruption and uncertainty, Mary-Anne warns there will be a spike in rental demand. Households are likely to put off major financial decisions, such as buying a home, and opt to rent for longer, underlining the need for more rental homes.

Mary-Anne of Ringley says the government should encourage BTL investors to return to the rental market to help meet the rising demand for rental homes and drive transaction levels. 

The Royal Institution of Chartered Surveyors has called for a Stamp Duty holiday once lockdown restrictions are eased and a number of volume housebuilders have announced they intend to reopen construction sites.

Mary-Anne says in addition to short-term help such as a Stamp Duty holiday, the government should also consider long-lasting structural reforms that reflect changing housing needs.

Bowring comments: “A stamp duty holiday would no doubt cause a rush of transactions and help breathe life into a housing market that has been put into deep freeze in an effort to battle coronavirus. 

“The government should be looking at long-term solutions as well as short-term sticking plasters when it comes to fixing the UK housing market.

“Millions of Brits were already renting, and that number was predicted to grow anyway with or without coronavirus. The disruption caused by coronavirus will likely see rental demand grow, as banks squeeze potential buyers with tighter lending restrictions and people put off buying or selling a home as it becomes clearer COVID-19 will cause continued uncertainty and disruption in the medium term.

“Eliminating additional stamp duty for buy-to-let investors would help stimulate the supply of rental homes while also driving wider activity in the housing market. Landlords are a crucial source of development finance through off-plan sales and will help support getting Britain building again.”

Government policy for rented housing is failing

Published On: February 14, 2020 at 9:10 am

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Government policy for rented housing is failing

Data released yesterday has demonstrated the failure of government policy for the private rental sector (PRS), landlords have claimed.

The Royal Institution of Chartered Surveyors (RICS) is warning that private sector rents are set to increase by 2% over the next year. This will be a result of the demand for such housing exceeding supply, as landlords start to leave the sector.

Recent tax increases, the restriction of mortgage interest relief to the basic rate of income tax, and the 3% Stamp Duty levy on the purchase of extra houses have already put pressure on many landlords.

Alongside this, the database of rogue landlords is being massively underused, with only 18 individual landlords and property agents and five companies being registered for offences committed since April 2018.

The Residential Landlords Association (RLA) points out that this means either the number of problem landlords is not as high as many have argued or local authorities are focussing too much time on licensing good landlords instead of rooting out the criminals.

On top of this, statistics published yesterday show that it now takes an average of almost six months for courts to process claims for repossession of a property.

The RLA argues that during this time tenants could be refusing to pay rent, behaving anti-socially or causing damage to the property.

John Stewart, Policy Manager for the RLA, said: “This series of statistics clearly show the negative impact of government policies. At the end of the day, it is tenants who are suffering. 

“The drop off in supply caused by good landlords who find operating in the market more difficult means it is increasingly difficult for tenants to secure somewhere to live and they are then faced with higher rents.

“Ministers need to change course and instead of attacking the private rented sector, there should be policies and taxation to encourage growth in the supply of rental accommodation to meet the ever-increasing demand.”

Rental supply crisis warning comes as RICS survey shows sharp decline in landlord instructions

Published On: December 13, 2019 at 10:41 am

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Rental supply crisis

A crisis may be on the horizon for the private rental market, as new figures show a sharp drop in supply over the last year.

The latest Residential Market Survey by the Royal Institution for Chartered Surveyors has been released. It shows a net balance of -29% of surveyors reporting a fall in landlord instructions. This is twice the negative rating that was reported in November 2018.

The report on the survey points out that market activity has turned stagnant ahead of the General Election. Its highlights also include:

  • Buyer enquiries and new instructions continue to fall, although the pace of decline eases 
  • Near term sales expectations turn marginally positive for the coming three months 
  • Respondents anticipate prices will return to growth over the next twelve months 

With tenant demand continuing to increase, RICS predicts that this will lead to rent increases of around 2% over the next year and around 3% a year over the next five years.

David Smith, Policy Director for the Residential Landlords Association, has responded: “If the decline in the supply of new homes to rent continues to fall whilst demand is still rising, this is going to lead to a crisis in some areas as tenants desperately search for somewhere to live. 

“This is all the result of increased taxation and other measures over the last three years and the result has been highly predictable as we said it would be.

“The new government needs to urgently address the problem and make changes in the forthcoming budget to relieve the pressure on landlords and encourage new investment to meet the demand.”

Residential Market Survey predicts rent increases over next five years

Published On: October 11, 2019 at 9:09 am

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Residential Market Survey

The latest report from the Royal Institution for Chartered Surveyors (RICS) indicates that tenants face an “acceleration” in rent increases over the next five years. This is thought to be a result of the demand for private rented housing outstripping supply.

This is according to new figures published in the September 2019: UK Residential Market Survey.

The report states that the latest results for the lettings market indicate:

  • Demand from prospective tenants will rise firmly for the eighth month in a row.
  • Landlord instructions remain in decline
  • With demand still outstripping supply, rent expectations remain positive for the next three months
  • Rental growth of approximately 2% has been predicted over the coming twelve months
  • Rental growth is expected to average around 3% per annum through to 2024

David Smith, Policy Director for the Residential Landlords Association, has responded: “Today’s figures demonstrate what we have long predicted, namely that because of recent tax hikes on the sector and threats to remove Section 21 repossessions without putting proper alternatives into place, landlords are not investing in new homes to rent, leading to demand outstripping supply. This only serves to hurt tenants as they face less choice and higher rents.

“Given how clear the evidence is the Government urgently needs to change course, and end those tax measures which are choking off investment in new homes to rent.”

The latest edition of The DPS Rent Index shows that average monthly rents in the UK have increased by 0.91% between July and September, which supports this prediction from the RICS.

The RICS’ September 2019: UK Residential Market Survey can be viewed here: www.rics.org/globalassets/rics-website/media/knowledge/research/market-surveys/uk-residential-market-survey-september-2019-rics.pdf

RICS Calls for Government Review as Private Landlords Quit Sector

Published On: August 10, 2018 at 9:29 am

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Private landlords are continuing to quit the sector all over the country, while tenancy demand continues to increase.

According to the Royal Insitute of Chartered Surveyors (RICS), that smaller landlords’ desertion is the most outstanding feature of the property market.

The RICS commented: “This pattern reflects the shift in the buy-to-let market in the wake of tax changes which are still in the process of being implemented, as smaller scale landlords exit the sector.

“Significantly, the drop in instructions is evident in virtually all parts of the country.”

However, the RICS said that its member agents were continuing to report rising tenant demand.

It said that as a result of this imbalance, rent rises can be expected.

The RICS is forecasting a rise of around 2% over the next year and by 15% by the middle of 2023.

Abdul Choudhury, RICS policy manager, said: “Our survey suggests that recent Government policy and legislation changes have impeded the growth of the Private Rented Sector, which is a vital part of a functioning homes market.

“Withdrawing tax breaks that small landlords relied on, placing an extra 3% on second home Stamp Duty, and failing to stimulate the corporate build to rent market, has understandably impacted supply.

“While the current focus is rightly on using regulation to improve the experience for tenants, the Government must urgently look again at the PRS as a whole, including ways to encourage good landlords.

“Ultimately, the Government must consider the impact of its policies, and if the wish is to move away from the PRS, it must provide a suitable alternative.”

Changes in the tax treatment of private landlords were initiated by former Chancellor George Osborne.

The RICS also reported that the sales market was dormant in July, with the number of newly agreed sales almost unchanged for the fourth month running.

It said new instructions were also flat, following two months of “very modest increases”.

Due to this, the RICS said, the average inventory on the books of estate agents is likely to remain close to historic lows.

The RICS survey had 304 responses, covering 620 agency branches.

Agents commenting on the lettings market as part of today’s survey repeatedly refer to lack of stock, high demand and increasing rent.

One agent, in Oswestry, said that his firm had no properties to let at the time of the survey.

Others criticised the Government for the tax changes, including what one agent called “crippling levels of Stamp Duty”.

Activity in housing market slows for first time since July

Published On: January 20, 2017 at 3:34 pm

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The housing market in the UK almost stopped during December, as price growth slowed and fewer transactions were made, according to the latest RICS survey.

As residential property price growth slowed, the headline balance of surveyors reporting an increase slipped to 24% from 29% in November.

Setback?

A RICS statement said: ‘Although this suggests prices are still rising firmly, the latest figure does end a run of four successive months of higher house price balances.’[1]

Further findings from the report found that the majority of RICS’ members predict a further slowdown in property price rises and new sales in the opening quarter of 2016.

The statement continued by saying: ‘While it remains to be seen if this is a temporary setback, 1% more chartered surveyors saw a fall rather than a rise in sales last month, and figures for predicted sales over the next three months across the UK also saw a noticeable slow down with only 4% more respondents anticipating an increase in sales during the coming three months down from 18% previously.’[1]

Price falls

London was the only region to see a fall in property values, while the North West of England saw the largest growth.

With price expectations for the next three months softening, RICS believe respondents were more positive on their outlook for the year. 49% of those questioned feel prices will increase during the next 12 months, in comparison to 40% in the last survey.

Simon Rubinsohn, chief economist at RICS, said that the latest survey, ‘provides further evidence that both price and rent pressures are continuing to spread from the more highly valued to more modestly valued parts of the market for good or ill.’[1]

Activity in housing market slows for first time since July

Activity in housing market slows for first time since July

Sluggish

Despite activity falling in the last month, Richard Sexton, director of e.surv, noted that a seasonal slowdown is typical. In addition, he feels that the major problem is supply.

‘New instructions remain sluggish and with annual house prices rising at an unsustainable rate, too many prospective new buyers are being priced out of the market. A new year means new opportunities for change. As we await the government’s Housing White Paper, hopefully further initiative and funding will be applied to help secure home ownership for many hard-working earners,’ Sexton noted.[4]

[1] https://www.propertyinvestortoday.co.uk/breaking-news/2017/1/uk-housing-market-activity-slows-for-first-time-since-july–rics

 

 

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