Tuesday, 22 August 2017

Tax changes mean a third of landlords plan to hike rents

A significant number of private landlords are planning to increase rents to help cope with changes to the way they are taxed, new research has suggested.
A study by Cover4LetProperty found that 32.5% of landlords are planning to increase their rent in the next 12 months in order to keep up with increased tax liabilities and costs as a result of legislation changes, including the scrapping of interest relief on mortgage payments.


While rents may be increasing, the research suggests that most buy-to-let landlords do not plan to change the size of their portfolios, with 83% of buy-to-let investors not looking to increase or decrease their property portfolio in the next 12 months.
In fact, just 14% of private landlords are looking to expand their portfolio within the next year.
When asked how happy they were with their tenants, 93% of landlords said that they were happy, 6% said they are “50/50”, and just 1% said they are unhappy.
Around half of the respondents also revealed that they are property investors, with the other half typically becoming accidental landlords due to inheritance, remarriage, or moving abroad and letting their home out.
Looking forward, many landlords are worried about the impact that “government meddling” will have on the private rented sector, along with increased tax liabilities and possible changes because of Brexit.

https://www.landlordtoday.co.uk/breaking-news/2017/8/tax-changes-mean-a-third-of-landlords-plan-to-hike-rents


Thursday, 10 August 2017

Stamp duty is holding up the housing market in England and Wales



Stamp duty, the property tax paid by buyers in England and Wales, is making the current housing crisis worse by causing a bottleneck in the residential real estate market, according to a new report.

It is deterring older buyers from downsizing and therefore freeing up homes for those further down the housing ladder and moving would rise by 27% if the tax was abolished, says the research from the London School of Economics and the VATT Institute for Economic Research.

The cost of the tax, which is zero up to £125,000, then rising in increments to 10% for properties worth over £925,000, is affecting buyers at many levels, meaning that they are staying put rather than moving, it suggests.

First time buyers, particularly those in London where prices are much higher than the rest of the UK, face paying stamp duty in many parts of the country. Second steppers looking for family homes are put off by the level of tax.

In addition, many pensioners in larger homes in more expensive areas are unable to move because buyers are put off by stamp duty, which costs £20,000 on a £600,000 home and £143,000 on a £2 million property.

‘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,’ said professor Christian Hilber, co-author of the report.

‘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,’ he added.

‘Almost 90% of people want to own a home, but only 63% do. We reformed property taxes including stamp duty to help more people get onto the property ladder,’ said a UK Treasure spokesman.

‘In addition, we are helping people, including young families, to buy their first homes through policies such as Help to Buy and the Lifetime Isa, and the recent £2.3 billion Housing Infrastructure Fund which will free up over 100,000 properties in high demand areas,’ he added.

However, the report points out that economists have long criticised stamp duty as being inefficient. It concludes that this is indeed the case.

http://www.propertywire.com/news/uk/stamp-duty-holding-housing-market-england-wales/

Interview Liam Ryan of Assets for Life

Serial entrepeneur Liam Ryan describes his setbacks after owning two successful businesses and then bouncing back to form Assets for Life with his partner, Jay Munoz . They can be contacted via . This interview took place just before their flagship event "The Ultimate Property Experience" in Stratford, London.

Please like and share this video.


NatWest overhauls buy to let mortgage offer ahead of rules change

By Graham Norwood


NatWest Intermediary Solutions has announced a major overhaul of its buy to let mortgage offer, but it is bucking the trend of some other lenders.

As with other mortgage companies, portfolio applicants with four or more BTL properties will have to produce additional information on their other properties (residential and buy to let) to enable a full affordability assessment.


Additional information will also be asked for in relation to landlords’ experience, use of letting agents and future plans to expand or reduce their portfolio, while the same ‘higher’ stress rate will be applied to all other mortgages as well as the current application.

NatWest’s valuation service will assess rental demand and income for all other properties being let. By the end of this year it will introduce a revised interest coverage ratio calculation of 5.5 per cent x 135 per cent; in all cases expected rent will have to meet a minimum rental cover calculation of 5.5 per cent x 125 per cent.

However, unlike some other lenders NatWest is also increasing the total number of buy to let properties it will allow a landlord customer to own from four to 10, including unencumbered properties and properties mortgaged with another lender.

https://www.lettingagenttoday.co.uk/breaking-news/2017/8/natwest-overhauls-buy-to-let-mortgage-offer-ahead-of-rules-change

Wednesday, 9 August 2017

House price slowdown is excellent news – even if estate agents disagree

By Nits Pratley

The expense of property relative to earnings will probably keep UK house price inflation low this year. Photograph: Yui Mok/PA
Take your pick. House prices in the UK are rising at their slowest annual rate for four years, according to the Halifax’s index. Alternatively, June’s increase was the strongest monthly increase this year.

As ever with house prices, it’s best to prefer the longer perspective. On this occasion, that means ignoring the June’s very modest month-on-month pick-up of 0.4% and concentrating on the underlying trend. The mood is best captured by the fact that the May-July period recorded the fourth quarterly fall in a row, the first time that has happened since November 2012. In short, the market has slowed significantly this year. The annual rate of increase was 5.7% in January; now it is 2.1%.


This should be seen as excellent news, even if estate agents and those seeking a quick sale of their property may disagree. Back in March last year, house prices were rising at an annual rate of 10%, which was completely unsustainable given how slowly wages are increasing. Indeed, the position was becoming dangerous, especially from the Bank of England’s viewpoint. Double-digit house price inflation and rock-bottom interest rates make an unhealthy cocktail.

It’s too glib to say the referendum results turned the market. The vote for Brexit has been a factor, especially in London, but other forces are at work. The biggest is the sheer expense of houses relative to earnings. Average house prices remain about six times average earnings, a level last seen in 2007, just before the banking crash and recession.

“Affordability concerns”, as the Halifax coyly puts it, are the reason why the current tepid conditions will probably continue for a while. The only obvious countering pressure is the shortage of homes on the market, which is at all-time low according to the lender. Overall, economists predict house price inflation of 2% this year, a forecast that may even prove to be on the high side.

Paddy Power Betfair takes a punt outside the industry
Breon Corcoran, chief executive of Paddy Power Betfair, is 46, which is young to choose to quit as a successful boss of a FTSE 100 company. Shareholders may also feel it’s a bit early. Paddy Power and Betfair merged only 18 months ago and, after the initial enthusiastic applause, the share price has faded.

If Corcoran longs for fresh adventures, which seems to be the case, it would be understandable. He’s done 16 years in total at the two halves of the company. He quit as chief operating officer of Paddy Power in 2011 to lead a successful rehabilitation of Betfair. He then masterminded the £5bn merger with his old shop.


“There is never a good time to leave,” he says now. Shareholders would agree. From £98 last August, the shares are £75.50, down 370p on Monday, so he can’t be said to be going out at the top in stock market terms. He, and the company, could argue that operations have been integrated faster than planned and profit forecasts this year look solid. Even so, the owners would probably prefer the full £50m of promised savings to reach the bottom line before the architect of the deal departs.

The replacement is Peter Jackson, 41, who, after a “rigorous and extensive” global search, has found within the boardroom. He is one of the non-executive directors. Jackson fits the bill from the important technology angle. His background is in banking and currency exchange, plus a six-month stint as UK boss of Worldpay, the payments firm. But Jackson’s experience in the gambling industry is confined to four years as a non-executive.

Maybe that’s sufficient training and there is, after all, no golden rule that bookies must appoint hardened bookmakers. All the same, you can understand why investors took fright. Paddy Power Betfair is the biggest online gambling firm in the world on some measures and its new jockey is a merely a promising newcomer.

Energy big six flowing against Ofgem current

The costs of supplying electricity are soaring, British Gas told us last week when it lifted prices by 12.5% – equivalent to £76 on an average dual fuel bill. But what’s this? Regulator Ofgem is moving in the opposite direction. It is cutting up to £19 off bills for 3 million customers with pre-payment meters. Ofgem says costs have fallen since its “safeguard” tariff was introduced in February.

In the tangled world of energy prices, half an explanation is possible. British Gas was looking back a few years, rather than a few months, when it was talking about costs. The company may also buy energy two years in advance, whereas Ofgem uses shorter horizons when doing its sums.

All the same, the gap between the regulator’s dual-fuel pre-payment tariff, which works out at £1,048 for a typical customer, and the standard variable prices of the big six is starting to look wide. British Gas put its own dual-fuel prices at £1,120, for example.

Like-for-like comparisons may be imperfect, but we can say this: a widening gap can only increase the political pressure for intervention.

https://www.theguardian.com/business/2017/aug/07/house-price-slowdown-estate-agents-rises-uk-wages

More BTL landlords needed to meet demand from a growing population

By Marc Da Silva

Supply and demand are perhaps the most fundamental concepts of economics, and it is the main reason why UK house prices have increased so much in recent years, and why Britain’s growing population will almost certainly push property prices even higher in the medium- to long-term.

The latest forecast from the Office for National Statistics that predicts a 8.4 million rise in the UK’s population over the next 22 years from last year’s 65.6 million, eventually reaching 74 million in 2039, spells bad news for young people trying to get a foot and the housing ladder, and underlines the urgent need for more private rented homes.

That is why the government needs to reverse many of its recently introduced anti-landlord policies, such as the scrapping of the ‘wear and tear’ allowance, phasing out of mortgage interest relief and the 3% stamp duty surcharge.

Jonathan Stephens, managing director of Surrenden Invest, said: “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?!

“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.”

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

Monday, 7 August 2017

Have your say on the ‘state of PRS’

By Marc Da Silva


But-to-let landlords are being invited to take part in the Residential Landlords Association’s (RLA) latest quarter survey, designed to improve conditions in the private rented sector (PRS).

Part of the RLA’s strategy to ‘make renting better’ is to undertake a regular review of the PRS, and that includes conducting quarterly surveys to assess the state of the PRS.

The short survey will take around 10 minutes to complete and includes questions on issues related to licensing, tenancy deposits, letting agent fees and more.

The findings will help the RLA better understand the key issues affecting private landlords right now – as well as informing its future policy work.

Involvement in the research project is entirely voluntary, anonymous and participants are free to withdraw at any point and all information will be kept confidential. Only anonymous aggregated data will be presented in the report.


You have until 5pm on Friday 11th August to take the survey, which you can find by clicking here.

https://www.landlordtoday.co.uk/breaking-news/2017/8/have-your-say-on-the-state-of-prs