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Over half of UK landlords will increase rent due to tax cuts, poll shows
More than half of UK landlords who took part in a new poll said that they are likely to increase their tenants’ rents as a direct result to tax changed announced in the Mini Budget. Some 56% said they would need to respond with rent hiked to Chancellor George Osborne’s cutting of mortgage interest reliefs from 45% to 20%, in the poll by lettings agent Rentify. The poll also found that 57% are likely not to expand their property portfolio beyond its current size in the face of the cuts and 23% said they may plan to sell off their current properties. ‘These statistics are a stark reminder that if landlords aren’t incentivised to be landlords then they will just stop buying. The Chancellor’s cutting of the mortgage interest relief remains a very unwelcome decision and one that could irreparably damage the approach of many buy to let landlords and quality of living for their tenants,’ said George Spencer, chief executive officer of Rentify. Spencer said it is not good news coming on the back of recent research showing that more than half of 20 to 39 year olds will be renting property from private landlords rather than living in their own homes a decade from now. He explained that the current mortgage reliefs helped UK landlords offset other costs such as high street lettings agent fees, home insurance, maintenance and repairs costs, as well as council tax and any ground rent. ‘Mortgage interest relief often makes up a large proportion of deductible costs for landlords, and reduces their tax bills significantly,’ he added. Continue reading
Over third of UK letting agents report rent rises
Over a third of letting agents in the UK saw rent increases last month, the highest recorded this year, while a third saw an increased in short term let enquiries. Indeed, more and more agents are witnessing increases in the cost of renting, according to the Association of Residential Letting Agents (ARLA) monthly private rented sector monthly report. Some 36% of agents said that rents had increased between May and June, the highest number since tracking began and 80% predict that private rents will continue to soar over the next five years. ARLA pointed out that member’s views could be the result of the measures introduced to reduce the amount of tax relief buy to let investors can claim in the Chancellor’s Mini Budget last month. The report also found the highest number of agents reporting rent increases was in the East Midlands where 48% said that rents had increased in June, compared to only 17% in Wales. Supply and demand shifted marginally in June, with an average of 178 properties managed per branch, compared to 179 in May. There was an average of 36 prospective tenants registered per ARLA branch in June, the same as the previous three months. The report also revealed that worryingly, supply in London continued to drop with only 118 rental properties managed in June, compared to 134 in May, a decrease of 12%. As the summer holidays begin, interest in short term lets has risen further, with 33% of agents reporting an increase in enquiries for short term lets in June. This has risen by 7% from the previous month when 26% reported an increase in enquiries. Agents in the North West have witnessed the largest increase in enquires for short term lets, with 43% reporting a rise in June. ‘It is worrying to see so many agents reporting an increase in the cost of rent over the last six months, especially considering so many people rent as a way to bridge the gap whilst they save to get onto the property ladder,’ said David Cox, managing director of ARLA. ‘Findings like this continue to prove that the housing crisis isn’t going to disappear anytime soon and it will take a while before we see steps heading in the right direction. The impact of the Chancellor’s reductions to the amount of tax relief buy to let investors can claim will affect the cost of renting over the coming months and is likely to mean it will take even longer to see any improvement in affordability in the private rented sector,’ he added. Continue reading
Average UK home values up almost 3% in first half of 2015
The average value of homes across Britain rose by 2.75% during the first six months of 2015, with all regions seeing price growth, according to new figures. At the start of July the average price stood at £270,674, up £6,974 on January’s figure of £263,699, the data from property website Zoopla shows. A breakdown of the data show that although there is general growth the rate of growth varies from region to region. Scotland experienced the highest rate of growth, with an average increase in property values of 6.6% or £11,382, taking the average home value in Scotland to £183,230. The next best performing regions were the North East and North West registering a 3.1% and 3% increase respectively. Wales was the worst performing region for property price increases over the first half of 2015 with an average rise of only 1% or £1,584. Among the 50 largest cities in Britain Edinburgh registered the largest growth in house prices since January 2015 of 8.2%, representing a £20,465 increase in the average home value in the city. Next was Colchester in Essex which saw property prices rise by 7.6% or £19,088, during the six month period, followed by Aberdeen with a 6.4% or £15,416 rise in values. London saw prices rise by only 2.5%, below the national average, but this amounted to a rise of £14,385 because of the higher price of property in the capital city. Yorkshire had three of the 10 worst performing cities for house price growth in the first half with Rotherham seeing a fall of 2.1% or £2,752. Wolverhampton, Newcastle upon Tyne and Middlesbrough also saw a modest drop in average houses over the period. ‘While national property price growth saw a slow start to the first half of the year, it recovered strongly towards the end of the period. The strong regional figures across the board indicate an economy which is returning to health, with a series of Government incentives designed to encourage home buying helping to boost demand for property in all parts of Britain,’ said Lawrence Hall of Zoopla. He explained that the surge in property values in Scotland can, in part, be explained as a post referendum bounce, as businesses and capital flood back to Scotland, after withholding investment during the volatile September referendum period in 2014. ‘A post general election feel good factor must not be discounted as more devolution promised has given property prices a bounce as Scots anticipate more jobs and investment coming their way,’ he added. Continue reading
