buy-to-let
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Latest property news
Smaller landlords are disappearing – is this what the Government wanted all along?
Growth in the buy-to-let sector this year has dropped dramatically as more amateur, smaller portfolio landlords have stopped buying properties or decided to leave the market, a report has claimed. The Kent Reliance annual Buy To Let Britain survey, published in association with Legal & General, quizzed 865 landlords and shows that the recent mix of tax reform and tighter regulation has reduced growth in the number of privately rented houses to 2.2% this year, down from just over 8% in 2014. These recent reductions in tax allowances and extra Stamp Duty, coupled with a second round of stricter buy-to-let lending rules introduced by the Prudential Regulation Authority (PRA) this year, means the market now favours larger portfolio and institutional investors, the report claims. Limited companies And the landlords who have stuck with buy-to-let are now increasingly turning to limited company status to reduce their tax costs. Kent Reliance says 70% of all buy-to-let loans are now from companies rather than individuals. This, Kent Reliance Chief Executive Andy Golding (pictured, left) says, is having the effect many warned it would – to push up rents as tenant demand outstrips supply in some areas of the UK, in particular the East…
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Latest property news
Buy-to-let damaged by govt’s tax and mortgage changes, says leading lender
The Prudential Regulation Authority’s changes last year to the UK’s lending rules for the buy-to-let sector have led to reduced activity in the market, leading lender Paragon has reported in its full-year accounts. Following a review of the buy-to-let market in 2015/2016, the PRA this year raised the standards it expects underwriters to apply to landlords taking out mortgages. This includes greater scrutiny of a landlord’s overall business financials, in particular for portfolio landlords with four or more properties. Paragon also says the additional Stamp Duty that is now paid by landlords buying properties, and the reduction is tax perks for the sector, also contributed to a bad year. Stamp Duty These factors, the lender says, helped drive modest profits within its business over the past year, up from £143.2 to £144.8 million – a rise of just 1.1%. Paragon appears to suggest that the additional red tape has increased its costs, because its buy-to-lending increased by 20% to £1.39 billion last year. And depsite the “disruption” to the market in recent months, the lender says overall demand in Britain’s private rented sector is expected to continue for the “foreseeable future”. “Against this backdrop the Group’s performance has been strong,…
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Guest Blogs
Plugging the landlord gap
PRS schemes could plug the gap left by landlords, says SDL’s Director of Private Rental Sector, Paul Staley, as buy-to-let loses its shine.
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Latest property news
Cash splurge surge? Landlords buying without a mortgage spend £21 billion
The government’s energetic attempts to subdue the buy-to-let market have failed, according to the latest rental market index from Countrywide. It reveals that a record number of landlords are re-mortgaging their existing properties to buy new ones for cash. The company says 65% of buy-to-let sales over the past 12 months were cash purchases, totalling £21billion, which is £200 million more than last year and a third higher than in 2007 when Countrywide began tracking the market. Northern and Scottish landlords are the most likely to buy with cash. Nearly 80% of buy-to-let property purchases in the North East are for cash, followed by Scotland at 71%, although in London landlords are much more reliant on debt to buy their next rental property – only 42% of purchases there are cash deals. “Landlords have increased their housing wealth considerably over the last 10 years,” says Johnny Morris, Head of Research at Countrywide (pictured, below). “This means cash purchases are steadily becoming a bigger part of the market.” It’s a developing trend, the Countrywide research shows. Ten years ago mortgaged-backed purchases were twice that of cash sales, but now the tables have been turned. Over the past 12 months buy-to-let purchases…
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Features
What’s behind the government’s attack on buy-to-let?
Does the Government really hate buy-to-let landlords? Andrea Kirkby investigates the changing focus on housing tenure.
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Features
Does buy-to-let still stack up?
The media says buy-to-let is crashing down, but, says Kate Faulkner, let’s look at the facts and figures.
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Features
BTL issue: demand v supply
Both sales and rentals markets are challenging, says Rob Clifford, CEO, SDL Group, but its not all bad, in fact, we’re quietly confident.
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Latest property news
Tenants not planning to buy
A growing number of tenants are not planning to buy and will probably rent for the long term, with little likelihood of buying a home. As letting agents experience growing demand, will there be enough properties? 38.4 per cent of tenants surveyed by The Deposit Protection Service said that they plan to remain in a rented home rather than buy property, The Deposit Protection Service (The DPS) has said. Most of those who said that they do intend to buy a property said it wouldn’t be likely within the next 12 months. 25.5 per cent said they hoped to own within six months, but 62 per cent said they didn’t expect to within the next year. The 1,000 tenants surveyed have their deposits registered with The DPS. Julian Foster, Managing Director of The DPS, said, “Renting is a vital part of the housing sector, and a significant proportion of the UK population choose to be tenants as it better suits their life plan or lifestyles. “However, buying a house is a significant financial undertaking, and renting will often also suit those who are saving for a deposit before accessing a mortgage. “The UK needs a flexible residential sector that suits the varied life choices and…
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Features
Buy-to-let, what happens next?
Scott Hendry, director at specialist finance provider Together, discusses what to expect from the buy-to-let sector after a challenging 2016.
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Latest property news
80% of agents say rents will rise after fees ban
Eight out of ten letting agents expect the tenant fees ban to be passed on as increased rents while reduced supply and increased demand will also contribute to upward pressure on rents, says the Association of Residential Letting Agents (ARLA). It canvassed 917 of its members over the past two weeks and found that 53% also expected to see increased competition for rental property during 2017 and 63% said there would be a drop in the number of privately rented properties available within the market. “I manage around a dozen properties for one of my clients and I spoke to her recently about the tenant fees ban,” says Brighton letting agent David Burt. “She made it clear to me that she wasn’t going to pay extra for the referencing or any of the other costs associated with acquiring tenants for her properties that tenants normally pay, so I’m going to have to consider putting up the rent so that my percentage management fee rises instead. Otherwise I’ll be working harder for less money.” ARLA says the recent increase in Stamp Duty for landlords and the reductions in personal tax and capital gains tax allowances are pushing up costs for landlords before…
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