Landlord News

Landlords take keen interest in HMOs

Landlords have a larger appetite for HMOs in a bid to boost their rental income by targeting young professionals and students, according to a report. Multi-Let UK says it has seen a 150% rise over the past year in investors looking to purchase HMOs and multi-lets. A sister company has also seen a 300% year-on-year rise in potential investors paying to join a waiting list that flags-up refurbished and available HMO properties. One reason for the growth is the incoming tax rises and changes to tax relief as well as the new stamp duty rules and the tightening of buy to let mortgage lending which will see landlords struggling to make profits. The managing director of Multi-Let, Daniel Hill, said: “Investors recognise the opportunity to boost their rent from a property that is home to multiple occupants and who pay rent separately. The attraction of HMOs   “The tax hikes for investors and landlords have made them look again at portfolios and how to boost rental income and profits. The attraction of HMOs is rent does not need to be raised if the profitability of lots of tenants is higher than a standard property.” However, he highlighted that HMOs are […]

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Evictions in England and Wales rise by 5%

The number of tenants evicted from rented homes in England and Wales in the first quarter of 2016 has risen by 5%, according to new figures. However, the Ministry of Justice (MoJ) says that repossession rates for those who own their homes has now fallen to a record low. The figures reveal that there were 10,732 repossessions granted to landlords of rented homes between January and March, compared to 10,253 repossessions in the final quarter of last year. The MoJ also reveals that record numbers of tenants are being forcibly evicted by bailiffs with 42,728 being removed from rental properties in 2015. The lack of affordable homes to rent   The reasons for the rise include the lack of affordable homes to rent and cuts in welfare payments with more than half of the evictions being brought by private landlords. PropertyLetByUs, an online letting agent, has also revealed in a survey that one in four landlords with buy to let property have had to serve an eviction notice in the last year a tenant. In addition, 5% of landlords had to pursue their eviction through the courts. The firm’s managing director, Jane Morris, said: “Landlords increasingly face rent arrears because […]

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Top renting group revealed to be families

The UK’s most common household type for renting in the private sector has been revealed to be families for the first time. The findings come from the National Landlords’ Association which shows that increasing numbers of landlords are now letting homes to families with children. They now make up 48% of the sector. Families are followed closely behind by young couples who account for 47% of the private rented sector. The research reveals a shift over the last four years when young singles made up 53% of the private rental market, followed by young couples and then families with children. Nearly 5 million households in the private rented sector   The NLA also reveals that there are nearly 5 million households in the private rented sector and, according to the English Housing Survey, the proportion in the sector that are families has risen to 37% last year, from 30% in 2005. The NLA’s chief executive, Richard Lambert, said the research revealed the contrast between the belief that renting is only a stopgap and something ‘to be tolerated’ until the renter bought their home and the modern trend of renting because people cannot afford to buy. He added: “There is, however, […]

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Landlords told to head north for best yields

Landlords should avoid investing in London property and head north for better buy to let returns, recording to research. Assetz Property says that following the Brexit vote to leave the European Union, the best returns will be enjoyed in the North of England. The firm says that buy to let landlords can achieve yields of 8.5% with such property in Leeds whereas gross yields in London average 3.5%. In addition, the research reveals that the disposable income for people in Leeds is much higher than those in London despite the capital’s average salary being £40,087 which means tenants there have a disposable income of £6,600 – and that’s before paying for food, travel expenses and builds. However, in Leeds the average salary is around £10,000 less than is found in the capital but they can rent a quality home for an average of £11,244 a year. Investors should concentrate on the return on their investment   The chief executive of Assetz Property, Stuart Law, said: “With interest rates set to fall on savings and London house prices set to drop, investors should concentrate on the return on their investment and yields. “The potential relocation thousands of highly paid city workers […]

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UK’s landlords set to leave PRS

Buy to let landlords around the UK are set to sell up over the coming years because of tax changes to the sector which makes owning a rental property unprofitable, according to new research. The survey by estate agency Maskells found that thousands of landlords will find it more difficult to turn a profit from their buy to let investment because of changes to mortgage tax relief and stamp duty as well as the tightening of buy to let lending criteria. The result is a growth in costs which could see many landlords having to put up rents which would deter potential tenants. As a result, according to Maskells, the new tax measures could see around 163,000 homes coming onto the market in 2017/18 as a direct result of the changes. Buy to let properties being sold   This boom in the number of buy to let properties being sold will, in some areas, lead to an oversupply of property for sale which will force prices downwards. Maskell’s Charles Curran said: “Tinkering by the Government’s may lead to a sell-off in the buy to let market which has provided the housing rental stock the UK depends on. “The situation is […]

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Top cause of stress for landlords revealed

One of the main causes of stress and worry for the UK’s landlords has been revealed as the controversial ‘Right to Rent scheme’, says a new study. In a report from letting agents PropertyLetByUs, they say that the legislation causes stress for one in three buy to let landlords and for those who have properties in areas with high numbers of immigrants, the situation is acute. Indeed, landlords in London, the West Midlands, the South East, the North West and in the East of England are said to be those suffering the most with the new law. The next stressful problem for landlords is dealing with tax issues with HM Revenue and Customs, then it is raising finance for their portfolio and then having to deal with tenant complaints and problems with void periods. The number one issue for causing stress and worry for landlords   However, according to the study, the number one issue for causing stress and worry for landlords is having to deal with rent arrears and arranging for property repairs. The research also reveals that landlords believe they are paying more than they should do for tenant reference checks which they are now required by law […]

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Numbers of buy to let landlords grows

Despite changes to the tax relief regime and a stamp duty surcharge, buy to let landlords are still flocking to invest in the sector, according to new figures. Estate agents ludlowthompson points to record low interest rates and volatility on the stock markets as contributing to the growing numbers of landlords. The firm used HM Revenue and Customs data to reveal that the number of landlords in the UK rose by 7% to reach 1.75million in 2014. Apparently, landlords earned £4.2 billion from rental properties, up from £3.1 billion the year before. Calculating landlord numbers and earnings   The estate agents say the HMRC data is the most up-to-date available for calculating landlord numbers and earnings and they say that the actual number will have risen even more because so many new landlords bought buy to let properties before the 1 April stamp duty deadline came into effect. In addition to the stamp duty hike, it appears that the government changes to tax relief rules is not putting off investors from becoming buy to let landlords. Indeed, the chairman of ludlowthompson, Stephen Ludlow, said: “Investors are drawn to buy to let because the returns outperform routinely other investments and buy […]

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UK’s private rental sector set to expand

The UK’s private rental sector will continue to grow because there is a shortage of affordable property leaving many people with little option but to live in rental accommodation, according to a report. The findings come from research carried out by insurance specialists Cover4LetProperty which found that 28% of adults in the UK are living in social or privately rented homes. They also found that with fewer people able to gain access to social housing, more than half of those aged over 40 will be living in a property owned by a private landlord. In addition, 57% of people aged over 60 will also be living in a private rented property. Those who earn between £10,000 and £20,000 will be the most prolific renters with two in three people in this income band having to rent. A report from housing charity Shelter also highlights that younger people have now given up hope of owning their own home because of unaffordable property prices. The insurance firm’s report also points to a study carried out by accountancy firm PwC which stated that the number of first time buyers will continue falling over the coming 10 years because they are struggling to raise […]

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A tenancy will last an average of 18 months

The average tenancy will, according to a new survey, last for an average of 18 months. Direct Line for Business says that tenants today are increasingly taking a short-term view when it comes to renting property. Their findings appear to contradict previous research which pointed to tenancies becoming longer. However, Direct Line says that tenants in Birmingham are staying in their private rented home for two years and four months, on average, which gives landlords the smallest tenant turnover in the country. The smallest tenant turnover is London   Surprisingly, the next location with the smallest tenant turnover is London where landlords have tenants remaining in the property for one year and nine months, on average. Next on the list is Leicester where tenants stay for one year and eight months, and tenancies in Edinburgh, Sheffield and Liverpool last an average of one year seven months. The greatest turnover of tenants can be found in Cardiff where landlords have tenants remaining in the same rented property for just 11 months, in Leeds tenants remain for 12 months and in Bristol tenants remain in their home for 14 months. Typical annual void period is 22 days for buy to let landlords […]

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Landlords face buy to let mortgage restrictions

Landlords are expected to face buy to let mortgage restrictions after one lender changed its criteria to demand that rental income was increased before a loan is agreed. The Mortgage Works said it is increasing the amount of rental cover required – which is how much a landlord needs to receive in rent in relation to their mortgage repayments – from 125% to 145%. In addition, the firm, which is the buy to let lending arm of Nationwide, will also not loan to landlords with less than 20% of a deposit and their minimum criteria is now 25%. The move is the Nationwide’s response to an announcement in March from the Bank of England insisting that buy to let mortgage lenders tighten their lending criteria when offering landlords buy to let mortgages. Industry experts are now forecasting that anyone wanting to invest in property will need a 40% deposit for any potential property investment. The managing director of Mortgages for Business, David Whittaker, said the Nationwide’s move did not come as a surprise and other lenders will follow suit. He explained: “The Mortgage Works is one of the biggest buy to let providers and they have taken the lead and […]

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