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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
Property sales in UK set to slowdown when buy to let surge ends
The UK housing market is set to slow down over the next three months following a short term rush on buy to let properties, says the latest report from the Royal Institution of Chartered Surveyors. The monthly survey report from RICS also shows that house price inflation peaked last December ahead of an anticipated rush to beat buy to let tax rises which come into force on 01 April. Once the 3% surcharge on additional homes, which include buy to let and second homes, is in place, RICS predicts that there will be more modest growth in property sales. While 74% of survey respondents expected there to be a rush on buy to let purchases ahead of Stamp Duty increases only 17% (net balance) expected to see an increase in sales over the coming three months. In addition, while house price inflation expectations peaked following the Chancellor’s Autumn Statement, with prices driven by speculation regarding an increase in investor demand, RICS says that this trend is set to soften from March as investor interest dampens. Only 21% of respondents expect prices to increase over the coming months. The survey showed that house prices continued to creep up throughout February. Across the UK, East Anglia continues to show the sharpest price increases, with 91% of respondents reporting that prices had risen over the past month. London and the North East by way of contrast saw very modest gains while the South West has seen the highest rise in sales across the UK for the last three months and 49% of respondents experienced a rise in sales rather than a fall and further increases are expected over the year ahead. New instructions to sell also increased more sharply in the South West than anywhere else in the UK as 34% of surveyors saw an increase in new listings rather than a decrease. New buyer enquiries in the South West rose for the twelfth month in succession with 49% more respondents seeing an increase in demand rather than a fall, the highest in the UK. However, uncertainty weighs on London’s housing market. Price expectations have turned negative in prime central parts of the capital and after sharp periods of inflation, London house prices look set to stabilize. Overall outer London boroughs remain firmly positive and Zone one properties are showing signs of a downturn. ‘Anecdotal evidence has suggested that a combination of exogenous factors is contributing to the overall picture in prime London, with tax changes, foreign market slowdowns and uncertainty over Brexit all being mooted as potential reasons behind the changes in demand,’ said Simon Rubinsohn, RICS chief economist. ‘This is not necessarily indicative of the long term market and the depreciation of the pound could encourage overseas investors back in to the market as could the outcome of the European referendum,’ he explained. He pointed out that the challenges facing the top end of London’s property market are clearly visible in the latest results. ‘However, it is… Continue reading
