Tag Archives: real estate
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
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
Cost of getting on the rental property ladder in UK set to soar, research suggests
With many private rental sector landlords in the UK requiring a deposit of four weeks’ rent getting on the rental ladder could present similar challenges in terms of cost as buying a home, new research suggests. It says that the cost of the average rental deposit is estimated to grow by 40% by 2026 to £1,111, more than the growth of the average monthly rent which is estimated to increase by 28% over the same period. This will mean that the average monthly rental deposit will be 70% of the average monthly salary, however there will be considerable regional variations, according to the research carried out on behalf of financial comparison website money.co.uk by the Cebr (Centre for Economics and Business Research). In London for example, the average rental deposit is predicted to rise to £2,733 by 2026, amounting to 120% of the average monthly salary, up from 99% in 2015. Deposits are predicted to rise sharply across the whole of the South of England. In the South East the average deposit is estimated to hit £1,469 in 2026, representing 83% of the average monthly salary at £1,761, up from 72% in 2015. In the South West the average deposit is estimated to represent 80% of median monthly earnings at £1,437 by 2026, up 14% from 66% of the average salary in the region in 2015. The research also suggests that based on recent trends, by 2026 an estimated 68% of all deposits requested will be at least six weeks’ rent. This means landlords will be demanding a lot more money from tenants before they sign a tenancy agreement. Average monthly rent is due to increase by 28% by 2026, some 8% higher than the increase in average salaries over the same period which are set to grow by 20% by 2026. The largest increase in rents between 2015 and 2026 is estimated to occur in London with close to 39% growth. Other regions with high estimated growth are the South West and South East where rents are predicted to grow by 32% and 34% respectively over the same period. The lowest increase in average rent is estimated to be in Yorkshire and the Humber with a 17% price rise between 2015 and 2026 and overall monthly salary growth is not expected to keep pace with the rental market Between 2015 and 2026, the average monthly salary is predicted to rise by an average of 20% or £267 to £1,576. This increase is lower than the estimated increase in both monthly rental costs and rental deposits which could mean many individuals will find the cost of renting just as unaffordable as buying. This is despite the fact the financial outlay required to rent is significantly lower than getting on the property ladder. ‘The rapid rise in deposits as well as rents is a double blow for everyone on the rental ladder. With the forthcoming changes to tax legislation and crackdown on… Continue reading
