Uk
Landlords organisation calls for change of mind on UK tax rises
Private sector rent increases in the UK are inevitable unless MPs move to halt the what the sector believes are unfair tax changes being brought in by the government, it is claimed. The plans to tax landlords on their income rather than after allowances, part of the loss of mortgage interest relief, will inevitably lead to rent increases, according to the Residential Landlord’s Association. Legislation now going through Parliament to implement the Budget will see landlords’ tax bills soar and in some cases will wipe out their profit altogether and as supply of rental homes falls and remaining landlords are facing higher overheads rents will rise to cover costs, the association says. In a recent survey of RLA members, some 84% said that they are likely to consider increasing rents following the Chancellor’s tax hikes which have also included and extra 3% stamp duty charge on buy to let properties. The RLA is now calling for reasonable changes to the Finance Bill to protect both landlords and tenants. It wants the Government to scrap its MIR changes and to remove the stamp duty levy where landlords invest in new property to increase supply in the private rented sector. It has warned this tax raid will have a devastating impact on landlords at a time when the Government needs them more than ever. Some MPs have already voiced concerns. The former Welsh Secretary, David Jones, has called on the Government to stop clobbering landlords whilst the chairman of the influential 1922 Committee, Graham Brady said he has serious concerns about the effect on landlord finances. ‘Landlords do not want to increase rents unnecessarily but many will have to if they are stay in business as a result of these wholly unreasonable tax increases. It is unfortunately tenants who will end up paying the price either through higher rent bills or finding it more difficult to find somewhere suitable to live,’ said Alan Ward, RLA chairman. ‘We welcome the concern of many MPs and hope that they will be able to persuade the Government to change its mind,’ he added. Continue reading
Latest data reveals home building boom in New Zealand
Residential and building construction along with infrastructure has reached a new all-time high in New Zealand, reaching $17.8 billion, new figures show. The building consent data from Statistics New Zealand reveals that 28,387 homes were consented in the past year, the highest number in 11 years, and the 9,434 consented in Auckland is continuing the strong growth over the past four years. The 732 for May is also the highest in 11 years. The growth in Auckland for the residential construction centre was 26%, a total of $4.3 billion, and is about as fast as a sector can grow, according to Nick Smith, Building and Housing Minister. He pointed out that this is treble the rate of $1.4 billion since his party came to office and the growth has been particularly dramatic in the past few years, since the Government entered into a Housing Accord with Auckland Council. ‘The construction sector is booming, with strong residential and commercial building activity across the country. The level of residential building activity in Auckland of $4.3 billion and nationwide of $11.4 billion is an all-time high in actual and inflation-adjusted terms,’ he explained. ‘This continues the longest and strongest period of growth in residential construction in New Zealand history. We are on track for 85,000 new homes to be built nationwide in this term of Parliament, up from 60,000 last term. Auckland is heading for an all-time record of 36,000 homes, the largest in any Parliamentary term,’ he added. ‘This record investment in residential construction is welcome because supply is the most important answer to New Zealand’s housing challenges. The Government is working on further initiatives to ensure this growth is maintained,’ he concluded. Continue reading
Pace of rental growth in UK slowing
Rents across the UK continued to rise during June, but the first half of 2016 has been characterised by a slowing in the pace of rental increases, the latest rental index shows. Rents agreed on new tenancies across the UK, excluding London, increased by 3.5% in the second quarter to £773 per month compared to a year ago and by 3.9% to £1,575 in London over the same period. However, this is down compared to the UK wide figure for May which was 4.4% and 6.2% for London, according to the data from the June HomeLet rental index. Rents continue to rise in almost every area of the country, with 10 out of the 12 regions surveyed seeing an increase over the three months to the end of May. The index report says that the more modest rental increases seen in June are a continuation of a trend that has developed throughout the first half of the year, with rents rising across much of the UK each month, but at a slower pace than was the case throughout most of 2015. Last June rents were rising at an annual rate of 7.8% and 10.1% in London. The data suggests the private rental sector has responded to the needs and concerns of landlords and tenants alike during the first half of the year. Landlords were hit by higher stamp duty charges on purchases of new property in April, which led to a rush to complete transactions before then and a spike in the supply of rental property thereafter. Meanwhile, tenant demand for property has remained strong, particularly given rising house prices and squeezed mortgage availability, and projected growth in the UK’s population suggests this will continue, the report points out. It explains that official projections suggesting this growth will come from both the British born population and net migration. Nevertheless, the slowing in the pace of rental increases may reflect landlords’ recognition that an affordability ceiling is approaching. The outlook for the sector will depend in part on the fall-out from the UK’s decision to leave the European Union in June’s referendum. Some economists expect the referendum result to act as a brake on construction in the housing sector, which could exacerbate the current imbalance between demand and supply in the rental market. It is also possible that demand may increase as would be house buyers opt to wait and see how house prices are affected over the next 12 months and beyond. HomeLet’s data also suggests that the average length of a tenancy, as measured by how long tenants had occupied their previous rental property, has begun to come down over the past three months. The figures underline the important role that the private rental sector plays in providing a wide range of housing options to those who have not purchased a property. According to Martin Totty, chief executive… Continue reading
