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Landlord sentiment survey reveals impact of tax changes for buy to let
The UK Government’s reduction of landlord buy to let tax relief looks set to have an impact with landlords in the private rented sector looking to sell up, according to new research. The latest sentiment survey indicates that the tax changes, announced as part of the Summer Budget, are proving a major concern for buy to let investors. Currently, 9% of landlords think it’s a good time to sell up, with the tax reforms influencing their decision more than any other factor. Indeed, according to the survey from lettings agents Your Move and Reeds Rains, many fear letting out a property will become far less profitable when the reforms start to come into force in April 2017, and they are now considering leaving the sector as a result. This loss of enthusiasm is even dampening the optimism of the 31% of landlords who think that now is a good time to buy rental properties and 44% believe investing in buy to let property is more complicated than it was six months ago. The survey report says that this is due to more rigorous regulation, also introduced as part of the Budget, which includes requirements for landlords to check their tenants’ immigrations status before they let their properties. Some 19% of landlords are daunted by this task, and now feel unequipped to let out their houses without the support of letting agents to manage their investment. The survey also shows that 24% of landlords believe the legislation on letting out properties has become more confusing, with 11% feeling that they don’t fully understand the current regulations. These changes are denting landlord confidence, and general disenchantment with the letting industry was an important factor for 23% of landlords who think now is a good time to sell. ‘Landlords could be forgiven for feeling a little deflated at the moment and its worrying to see this may motivate many to reconsider their investment. The Government’s tax changes appear to be making investing in buy to let less attractive because of the seemingly smaller profits margins on offer in the future,’ said Adrian Gill, director of Your Move and Reeds Rains. He pointed out that if a tenth of landlords do decide to leave the industry, this would seriously shrink the number of properties available for tenants. ‘At a time when tenant demand is only rising, shorter supply will only translate into increased rents. This may mean landlords are underestimating the likely pace of future rent rises,’ he explained. ‘The government needs to cut the red tape involved in providing homes for renters if they hope to maintain a healthy supply of rental properties. With the Bank of England keeping a wary eye on the buy to let market, further regulatory interference may only make landlords’ and tenants’ lives harder. We need landlords to stay in the market and invest further in the sector,… Continue reading
Number of first time buyers in the US falls for third year in a row
The share of first time buyers in the United States fell for the third year in a row and remained at its lowest point in nearly three decades, according to a new survey. The overall strengthening pace of home sales over the past year was driven more by repeat buyers with dual incomes, according to the annual survey released by the National Association of Realtors. The survey also found that nearly 90% of all respondents worked with a real estate agent to buy or sell a home which pushed for sale by owner transactions to their lowest share ever. The number of first time buyers was down to 32% from 33% a year ago, which is the second lowest share since the survey began in 1981 and the lowest since 1987 when it was 30%. Historically, the long term average shows that nearly 40% of primary purchases are from first time buyers. According to Lawrence Yun, NAR chief economist, the housing recovery's missing link continues to be the absence of first time buyers. ‘There are several reasons why there should be more first–time buyers reaching the market, including persistently low mortgage rates, healthy job prospects for those college educated, and the fact that renting is becoming more unaffordable in many areas,’ he said. ‘Unfortunately, there are just as many high hurdles slowing first time buyers down. Increasing rents and home prices are impeding their ability to save for a down payment, there's scarce inventory for new and existing homes in their price range, and it's still too difficult for some to get a mortgage,’ he explained. Yun pointed out that this year's survey perhaps offers additional clues to why fewer first time buyers are reaching the market. ‘First time buyers reported that debt in all forms delayed saving for a down payment for a median of three years, and among the 25% who said saving was the most difficult task, 58% said student loans delayed saving,’ he said. ‘With a median amount of student loan debt for all buyers at $25,000, it's likely some younger households with even higher levels of debt can't save for an adequate down payment or have decided to delay buying until their debt is at more comfortable levels,’ he added. With strong price growth in many markets and fewer first time buyers, the results in this year's survey reveal a market with a higher share of married couples at 67% percent, up from 65% last year, who have higher household income than previous years. Married repeat buyers have the highest income among all buyers at $108,600, while the share of single female buyers decreased from 16% to 15% and male buyers remained flat at 9%. ‘Similar to some of the obstacles facing first time buyers, tighter credit conditions and having less purchasing power than households with dual incomes likely led to the share of single female buyers declining to its… Continue reading
Homes in London, the south east and south west sell more often
Homes in London and the South East and South West of England change hands much more frequently than those in other parts of the country, according to a new analysis. Properties are held by their owners for an average of just 16 years in the South East and 17 years in London and the South West. By contrast, home owners in the North East are keeping their homes the longest, with property changing hands every 22 years on average, 36% longer between sales than the South East. The research report from mover conveyancing services firm My Home Move, says that a higher rate of property ‘turnover’ between owners is a sign of a healthy housing market as people move to new areas for work, upgrade to a larger home to accommodate a growing family or downsize when they no longer need the extra space. ‘Homes in healthy property markets change hands often, as people move up the housing ladder or move to new areas for jobs or a change of lifestyle. Our research reveals that the stronger job market and higher incomes in the South mean that people buy and sell homes more often than in the North,’ said the firm’s chief executive officer Doug Crawford. ‘Interestingly, it’s not just the South East that has a relatively healthy number of homes changing hands as the West Country is also thriving. Regional towns like Exeter, Bath and Bristol have vibrant housing markets and the region as a whole also benefits from people moving there from other parts of England for a slice of the good life,’ he added. The research also found that the amount of time between house sales has fallen dramatically over the last five years, down by 24% across England as a whole from once every 25 years to an average of every 19 years. The greatest improvement was seen in the Yorkshire and Humberside region which saw the time between sales fall from once every 28 years to once every 19 years. This was followed by the East Midlands, improving from once every 25 years to once every 18 years. Crawford believes that it is reassuring to see that homes are changing hands much more often than they were five years ago. ‘This has been a period of economic growth and the house market has been improving hand in hand with the economy. The combination of low inflation, reduced unemployment and improving wages means that people feel confident in their prospects and are more enthusiastic about moving to a new home,’ he explained. ‘At the same time, improving mortgage availability and low interest costs have made it easier for consumers to finance a home purchase. With interest rates set to stay low for longer, according to the latest Bank of England predictions, the next 12 months could see a further improvement in the housing market across the country,’ he added. Continue reading
