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Research suggests many UK buy to let landlords plan to sell up
The proportion of landlords in central London who intend to sell property has quadrupled since last year’s Budget, according to new research. Just 4% of landlords in central London had plans to sell property when surveyed before last year’s Budget but new figures from the National Landlords Association (NLA) show that has risen to 19%. The 15% increase in intention to sell property is the highest witnessed across the UK over the last six months. Landlords with property in the North East have seen the smallest increase compared to other regions of the UK, rising from 17% in June to 24% in January. According to the NLA the restriction to mortgage interest relief for individual residential landlords announced during last year’s Summer Budget will leave many landlords worse off, forcing some basic rate tax payers into a higher tax bracket and leaving higher and additional rate payers with considerably bigger tax bills. The NLA has labelled the changes the Turnover Tax, because landlords’ tax will be calculated on the rental income they earn, rather than their profits. ‘Local property markets vary greatly across the United Kingdom, but we are seeing a loss of confidence across the board as many landlords realise they won’t be able to remain in the market,’ said Richard Lambert, NLA chief executive officer. ‘If landlords follow through with their intentions over the coming months this could lead to a massive sale of property, as we have previously warned. However, this may not be a straightforward process, especially for those with stock in low demand areas,’ he pointed out. ‘We urge those considering selling up to think about when they will need to do so, and to plan ahead now in order to minimise the risk of losing money as a result of a failure to sell,’ he added. Separate research shows that 59% of landlords are shelving plans to make further investments in buy to let or even selling their existing properties with tougher mortgage rules, the stamp duty change and mortgage interest tax relief behind their thinking. The research by property crowdfunding platform Property Partner also found that 27% of landlords had little or no awareness of the changes which are likely to affect their financial circumstances. Some 41% of those questioned say they plan to continue buying properties for rent, 38% say they are switching strategies. Continue reading
UK buyers willing to pay more for an eco home, research suggests
A large number of would be home buyers in the UK want to purchase an environmentally friendly home, with the majority willing to pay more to do so. Some 63% want to go green and 82% would be more for a home that allows them to fulfil an ambition of greener living, according to research from leading UK house builder Redrow. The survey found that participants ranked lower energy bills as more important than a garden, parking space, amenities, external appeal/design of home, and fittings and appliances, when choosing a home and more than a quarter were willing to pay at least a 6% premium for a home with sustainable features. The research has challenged the long held claim that consumer demand for greener living is limited and 78% agreed the purchase of a sustainable home was likely to have a positive environmental impact and more than two thirds believed that 'significant others' in their lives would approve of the decision to opt for a greener home. ‘Our findings challenge the long claimed, but previously under researched, belief that there is limited customer demand for sustainable homes,’ said Redrow Homes' sustainability manager Nicola Johansen. ‘As a responsible business, reducing the carbon footprint of our developments is a priority. However, we also recognise it's important to listen to our customers so we can build the homes they really want to live in and help them to make a lifestyle change for the better. This research helps us to fully appreciate what purchasers are looking for from their home and their home builder,’ she added. With 60% of respondents agreeing or strongly agreeing that they would be more likely to buy a new home from a company building sustainable homes, the evidence suggests that constructing more environmentally friendly properties, and promoting their credentials, could be a wise business choice for developers. The study also highlighted some areas where home builders can help their customers by providing more information about the eco credentials of properties that are already on the market. While the majority of home buyers, 65%, were confident an 'eco-home' would save them money and 65% that it would be a more comfortable home, a quarter indicated they thought it would be difficult or very difficult to buy such a home and almost half of respondents weren't confident of how sustainability features work. ‘This helps us build on our knowledge of what our customers are looking for from their home so we can provide them with the relevant information to inform their purchasing decisions,’ said Johansen. Redrow builds a wide variety of homes and designs take on issues such as being more airtight, making them 54% better at reducing heat loss than a typical 1970s' home. The firm says it’s homes also deliver improved energy efficiency through low energy lighting, appliances that are 'A rated' or above and energy efficient boilers to keep carbon emissions low. Redrow also offers customers solar panels as optional extras,… Continue reading
Downsizing in UK could bring windfall of up to £200,000 on average
Nearly half of home movers in the UK plan to downsize in the next three years and on average realise up to £200,000 by doing so, according to new research. Some 46% plan to sell and buy a smaller property and by downsizing from a detached to a semi-detached home they could realise a windfall of £117,230 of £200,000 in London. Downsizing was cited as the single most popular factor for moving, according to data provided by Lloyds Bank with research showing that the popularity of downsizing has grown in recent years, buoyed by the anticipated returns. The figures show that average age for a downsizer is 53, at which point the greatest number, 37%, of downsizers had lived in their home between 11 and 20 years. The main reason people cite for downsizing is to move somewhere which better served their circumstances with 53% wishing to do so while 39% want to reduce bills or free up equity and 31% to provide extra cash for retirement. A fifth say that they are downsizing earlier than they had anticipated, citing reasons such as health, changes in relationship status and a need to be closer to better local amenities. A third also say that they are planning to move to a more affordable area. Some 72% of those downsizing said they expected to profit from their move, with 35% saying that they planned to reinvest their additional capital in a new property, 29% said that they would invest in other financial products, whilst 21% planned to invest in their pension or pass the earnings on to their family. ‘People may consider moving home for a variety of reasons, often tied to their next big step in life whether that’s getting married, starting a family or children growing up and flying the nest,’ said Mike Songer, mortgage director with Lloyds Bank. ‘We typically think of people moving to bigger houses as they move up the housing ladder, but people are increasingly looking to downsize their home because their circumstances or priorities have changed. Whilst financial gain may not be the main driver for those looking to trade down their property it is clearly a factor, with three quarters of downsizers expecting to profit from such a move,’ he explained. ‘There are definitely financial benefits to be gained from trading down, with an average potential windfall of £117,230 when moving from a detached home to a semi-detached house. Downsizing is also healthy for the market, as it helps keep it moving and frees up larger properties which could be perfect for young families about to take their next step up the property ladder,’ he added. A breakdown of the figures show that house prices in the capital mean that London home owners could make the most from downsizing, as they stand to free up an average of £201,052 from trading down from a detached to a semi-detached home. Downsizers from the South West saw the highest rise over… Continue reading
