Monday 1 August 2016

Brexit Britain's House Prices grew last year

Houses in Britain grew in value by £2,400 in the month to June 2016, despite EU referendum jitters and the stamp duty levy.

The added value equated to 8.1pc in the year up to an average of £211,230

The figures, released by the ONS, will reassure those in the property market, who can take solace in the fact that property held up in the face of adversity in the lead up to significant changes in the sector.

The increase of £2,400 (1.1pc growth) was bigger than in both April and March, though it was understandably driven by price growth in the South East and London.

The new ONS figures - released in partnership with the Land Registry - is a month behind other leading indices like Halifax and Nationwide. Therefore, the EU referendum result will only likely be documented and realised in results published later in the year.

Source: This is Money

Sunday 24 July 2016

More Cheap Mortgages on the way

Moneyfacts have reported that mortgage rates are fell in the first half of the year and will continue to do so.

Their figures also show that more people are relying on private landlords to rent a property.

Moneyfacts said that those looking for a mortgage now would be substantially better off than they would have been if they had searched for a mortgage six months ago.



David Hollingworth at Mortgage broker London & Country said: "Mortgage rates are astonishingly low at the moment. Anyone that has failed to review their mortgage recently should really take another look as there could be an opportunity to slash their mortgage payments by switching to a new deal."

However, first-time buyers are still struggling to raise the funds required. The government's recent housing survey supports this, showing that the number of first-time buyers has fallen from 857,000 in 1995 to 564,000 in 2015. The average first-time buyer's age has increased from 30 to 33 in that time.

Source: BBC

Wednesday 20 July 2016

Centre for Economics and Business Research - "Prices will rise in 2017"

The Centre for Economics and Business Research has said that houses will increase in value by roughly £40,000 by 2021.

They also forecasted that house price growth in 2016 will reach 5.7%, and will rise a further 2.2% in 2017.

This will take average house price to £234,000 by 2021, with a 3.9% growth that year, according to Nationwide.

Robert Gardner, Nationwide's chief economist, said: "Housing market transactions were always likely to soften over the summer after the surge in activity in March. Determining how much of the [end-of-year] fall-back in activity is the result of the Stamp Duty levy, and how much is due to the referendum, will be difficult."

The CEBR forecasted a big decline in London prices - down 5.6% in 2017, but recovering to annual growth of 6% by 2021.

Source: This is Money

Friday 15 July 2016

Buy-to-let a better option than downsizing

Older homeowners who plan on downsizing to fund their retirement could look to buy-to-let instead.

Royal London, the pensions and investments company, has released a report claiming up to three million people of working age are planning to use the value of their home to fund retirement.

However, the report claims that downsizing from an average detached house (£310,000) to a semi-detached (£197,000) and using the proceeds to buy an annuity would result in a very poor yield of £13,700 - exactly half the national salary of £27,400.

The report also said downsizing is harder in practice - young people are living at home for longer, limiting the flexibility of their parents to move. Furthermore, mortgages are taking longer to pay off, so homeowners will need income to support mortgage repayments in the longer term.

Steve Webb, director of policy at Royal London, said: "Hoping to live off the value of your home could be a 'downsizing delusion' for millions of people. In most of Britain, the money freed up by trading down at retirement would generate a very modest income."


An alternative would be a buy-to-let investment. By using pension funds already saved, plus any other disposable income, a property investment could generate an immediate, sustainable income for the long term, and also give you the ability to earn capital gains on your home plus the investment property - plenty for a retirement income, and giving you a legacy for your family.

Since April 2015, those from the age of 55 have been able to access their entire pension pot in one lump sum, with a 25% of any withdrawal tax-free - this has given far more freedom to those who wish to invest in retirement income schemes other than pension annuities. One of the notable investment options is a buy-to-let property.

Initial costs would be for the deposit, plus letting agent fees and refurbishment. You could soon generate yields of up to 13% depending on location of investment.

This option would be particularly useful in the north, where the percentage of income downsizing would leave you with becomes lower - 51% in the North West, 49% in Yorkshire and the Humber, and 47% in the North East.

David Hollingworth, of mortgage broker London & Country, said: "Whilst downsizing is likely to remain part of a homeowner's strategy post-retirement it's not the only role that property may play.

"Many landlords will build a portfolio earlier in life as a long term investment for their retirement. In addition, the pension freedoms may also see some decide to purchase buy-to-let properties to generate an income in retirement. There can still be limits on maximum age for mortgage borrowers but some lenders have become more flexible in an effort to accommodate older landlords."

Friday 8 July 2016

Landlord Interest Relief Restrictions

In his July 2015 Budget, the Chancellor dealt a blow to landlords with his announcement that from April 2017 relief for finance costs would be progressively restricted. In giving effect to the restriction, landlords would move from the current position where they are able to deduct finance costs, such as mortgage interest, in full when computing their rental profits, to one where relief is given as a basic rate tax reduction.

Phased in
The switch from deduction to interest rate reduction is to be phased in over four years, with a gradual shift away from deducting property finance costs from property income.


Deduction v basic rate tax reduction
Where relief is given by deduction, the landlord obtains tax relief at his marginal rate of tax. The property finance costs are deducted in arriving at the taxable profit and that profit is taxed at the landlord's marginal rate of tax.

By contrast, where relief is given as a tax reduction, the rental profit is first calculated without taking account of the finance costs relieved by tax deduction and the tax is worked out on those profits. Effect is given to the basic rate tax reduction by deducting an amount equal to the finance costs x the basic rate of tax from the tax figure initially computed on the profits.

Example
Ian is a landlord. In each year from 2016/17 to 2020/21 inclusive, he has property income of £30,000. He pays mortgage interest costs of £6000 and incurs other expenses of £2000. He also has a salary £60,000 and pays tax on his property income at the higher rate of 40%.

His tax position for each of the years is as follows:

As a result of the shift from relief by deduction for 100% of property finance costs to relief by basic rate reduction for 100% of finance costs, Ian's retained profit is reduced by £1,200.

Sting in the tail
Moving from deduction to tax reduction has hidden costs. The relief is given later in the calculation, which has the effect of increasing the taxpayer's taxable income. This may move him into a higher tax bracket or trigger the high income child benefit charge or the abatement of the personal allowance.

Friday 1 July 2016

Substantial Increase in Mortgages for Buy to Let Investors via Limited Companies

According to a recent industry survey, there has been a substantial increase in lending over the last six months to investors who are purchasing properties as a company.

The specialist broker, ‘Mortgages for Business’, who conducted the survey discovered that buy to let mortgage applications completed by limited companies rose to 30% of all buy to let transactions in the first half of 2016. This is up from 21% in the second half of 2015 and just 18% in the first half of 2015 respectively.

The amount of mortgage lenders offering products to limited company borrowers increased to 14 from 2 six months ago, with total products available from lenders rising to 154 from 147 over the same period.

There have been varying suggestions, although expressed with caution, that landlords could incorporate to minimise the effects of recent buy to let tax changes, especially the new stamp duty levy for second properties and the phasing out of individual landlords’ mortgage interest tax relief.


“Applications and completions for limited company borrowers appear to have stabilised at around one third of all buy to let business. However, this masks a dramatic change in the investment pattern for new purchases where the proportion investing through limited companies has risen from less than 20 per cent by number - or 25 per cent by value - in the first half of 2015 to over 50 per cent in 2016” said David Whittaker, Managing Director of Mortgages for Business.

The Chancellor has also announced that he intends to lower corporation tax to 15% following the Brexit result. This could lead to even more landlords incorporating shortly.
“Clearly, the trend for limited company buy to let represents a real step change in behaviour as landlords adapt their investment strategies to mitigate the increased costs brought about by recent changes in the tax regime” said Whittaker.

Friday 24 June 2016

50.9% of Chichester Voters voted to leave the EU – What now for the 39,837 Chichester Landlords and Homeowners?

It’s 5.50am as I start to type this article and David Dimbleby has just announced the UK will be leaving the EU as the final votes are counted.

As most of the polls suggested a Remain Vote, it came as a surprise to most people, including the City. The Pound has dropped 6% this morning after the City Whiz kids got their predictions wrong and MP’s from the Remain camp are using words like “challenging times ahead”.

.. and now the vote has been made, what next for the 33,481 Chichester homeowners, especially the 13,271 with a mortgage?

The Chancellor in the campaign suggested property prices would drop by 18%. Using Treasury estimates, their method of calculating this was tenuous at best, but focused around the abrupt and hasty increase in UK interest rates, which in turn would raise the cost of mortgages, and therefore lower demand for property, causing a drop in property prices.… and I would say, yes, that will probably happen.

Chichester Property Values

Chichester Property values will probably drop in the coming 12 to 18 months – but by 18% - I am sorry I find that a little pessimistic and believe that figure was rhetoric to get homeowners and landlords to vote in a particular way. But the UK property market is quite a monster.

Since the last In/Out EU Referendum in June 1975, property values in Chichester have risen by 2089.7% (That isn’t a typo) and whilst property prices did drop nationally by 18.7% between the peak of 2007 and bottom of the market in 2009, when one compares property values today in the country, compared to that all-time high of 2007, (the period before the financial crisis of the Credit Crunch of 2008/9), they are still up 10.14% higher.

Another Credit Crunch?

And so, notwithstanding the Credit Crunch, the worst global economic outlook since the 1930s and the recession it brought us, a matter of a few years later, the Government were panicking in 2012/3/4 that the housing market was a runaway train.

Now the same Credit Crunch doom-mongers and Sooth-Sayers that predicted soup kitchens in 2008/9 are predicting Brexit meltdown. Bad news sells newspapers. Stock markets may rise, stock markets may fall, yet the British public continued to buy property in 2009/10 and beyond. Aspiring first time buyers and buy to let landlords dusted themselves down, took a deep breath and carried on buying… because us Brit’s love our Bricks and Mortar - we need a roof over our head. 

However, as mentioned previously, if the value of the pound drops, in the past UK Interest Rates have risen to reverse that drop. However, whilst a cheaper pound will make your pint of Sangria a little more expensive on your Spanish holiday this year and make your brand new BMW pricier, it will make British export cheaper! Which is great for the economy.

Interest rates

… and what of interest rates? Since 2009, interest rates have been at 0.5% and lots of people have become accustomed to those sorts of levels. So what if interest rates rise - end of the world? Interest rates in the 1986/88 property boom were on average 9.25%, the 1990’s they were on average around 6.5% and uber-boom years (when UK property values were rising by 20% a year for three or four straight years across the UK) - 4.5%. Many of you reading this who are in their 50’s and older will remember interest rates at 15%.

But I suspect interest rates won’t rise that much anyway, as Mark Carney (Chief of the Bank Of England) knows, raising interest rates causes deflation – which is the last thing the British economy needs at the moment. In fact, they have been printing money (aka Quantitative Easing) for the last few years (which causes inflation) to the tune of £375bn a month. A bit of inflation because the pound has slipped on the money markets (not too much mind you) might be a good thing?

.. because whilst property values might drop in the country, they will bounce back. It’s only a paper loss... because it only becomes real if you sell. And if you have to sell, again as most people move up market when they sell, whilst your property might have dropped by 5% or 10%, the one you want to buy would have dropped by the same 5% to 10% ... and here is the best part – (and work your sums out) you would actually be better off because the more expensive property you would be purchasing would have come down in value (in actual pound notes) more than the one you are selling.

The Chichester buy to let landlords have nothing to fear either, nor do the 6,356 tenant households living in their properties.

Buy to let is a long term investment. I think there might even be some buy to let bargains in the coming months as some people, irrespective of evidence, panic.  Even if we pull up the drawbridge at Chichester and immigration stopped today, the British population will still increase at a rate that will exceed the current property building level. Britain is building 139,600 properties a year, but needs according to the eminent ‘Barker Review of Housing Supply Report’, about 250,000 properties a year to even stand still, and as the birth rate is increasing, the population is living longer and just under a quarter of all UK households now are occupied by a single person, demand is only going up whilst supply is stifled. Greater demand than supply equals higher prices. That is definitely a fact.

So, what will happen next?

Well, there are many challenges ahead. The country has spoken and we are now in unchartered territory – but we have been through a couple of World Wars, an Oil Crisis, Black Monday, Black Wednesday, 15% interest rates and a Credit Crunch … and we survived!

And the value of your Chichester property? It might have a short term wobble… but in the long term - it’s safe as houses regardless.

Monday 20 June 2016

Capital Gains Tax and mortgage interest relief are top worries for landlords

The exemption of residential property from the new Capital Gains Tax cuts tops the list of concerns expressed by professional landlords for the health of the sector over the next 12 months, according to new research.

Some 63 per cent of landlords surveyed by lender Amicus cited the chancellor George Osborne's decision to maintain existing CGT rates on residential property sales while reducing them by eight per cent on assets, as their biggest challenge. 


In a close second place, on 61 per cent, is the abolition of tax relief on mortgage interest, which means that landlords will no longer be able to claim tax relief worth 40 or 45 per cent of the interest payments on their buy-to-let mortgages. 

Instead, the maximum tax relief will be set at 20 per cent with the change being introduced over a four-year period. 

This was followed by the tax changes to maintenance and improvements (57 per cent), whereby landlords will only be able to claim for 'wear and tear' costs actually incurred on replacing furnishings when calculating taxable profits.   

Increasing costs being passed on from the Right to Rent legislation (53 per cent) and rising legal and accountancy fees (52 per cent) were in fourth and fifth places respectively.

Fewer than half (44 per cent) of landlords expressed concern about the impact of Brexit and only a third (34 per cent) are worried about accessing long term finance to grow their portfolios. 

However, the survey was conducted across a small sample - just 187 landlords, in April.

(Article courtesy of Letting Agent Today)

Saturday 11 June 2016

Mortgage 'windfall pay-outs' likely to be around £4,300 per buy to let borrower

It is now thought that the likely average payout to each buy to let borrower affected by this week's court decision regarding the West Bromwich building society will be around £4,300.

Around 6,500 landlords are likely to receive payments after a class action against the society for increasing its tracker mortgage rates in December 2013. 

The Court of Appeal ruled this week that the building society was not, after all, allowed to break the terms that said the mortgages would track the Bank of England's base rate.

"Landlords could simply never believe that a lender would try to hike mortgage rates on what were tracker mortgages, that were supposed to only move in line with and track at a set margin over Bank of England base rate" according to David Lawrenson of LettingsFocus.


The mortgages contained a clause allowing the lender, under certain circumstances, to change the agreed interest rate - even though the landlords who took out the mortgages believed they would be 'tracking' the Bank of England's base rate.

Base rate has been just 0.5 per cent since March 2009 but the West Bromwich pushed up the rates on its buy to let mortgage product by two percentage points in 2013, to any borrower who had three or more BTL properties. 

Some landlords found their monthly payments doubled as a result.

The West Brom says it is likely to incur a loss this year because of the decision

(Article Courtesy of Letting Agent Today)

Thursday 9 June 2016

Landmark court ruling comes down in favour of buy to let investors

A landmark court ruling against the West Bromwich building society has come down in favour of buy to let investors. 

The case centres on mortgages issued up to 2008 to around 6,500 investors and landlords with three or more properties. 

The mortgages contained a clause allowing the lender, under certain circumstances, to change the agreed interest rate - even though the landlords who took out the mortgages believed they would be 'tracking' the Bank of England's base rate.

Base rate has been just 0.5 per cent since March 2009 but the West Bromwich pushed up the rates on its buy to let mortgage product by two percentage points in 2013, to any borrower who had three or more BTL properties. Some landlords found their monthly payments doubled as a result.


The Financial Ombudsman, when the issue was referred, found in favour of the building society but now a court has ruled in favour of a class action brought by around 400 landlords.

The case was led by the property118 website; yesterday's decision by the Court of Appeal was in favour of landlords who were appealing against an earlier judgement - in favour of the West Bromwich - by the commercial division of the High Court. 

Some 6,250 landlords are now expected to receive a refund which the building society says will cost about £27.5m.

(Article courtesy of Letting Agent Today)

Tuesday 24 May 2016

Buy-to-Let Deal of the Day - Substantial Four Bedroom Family Home Offering 4.3% Gross Yield AND Capital Growth

Landlords will often approach us looking for buy-to-let investments and one of their first questions often is "how long would it take to find tenants?"

Well, in the case of this four bedroom house in Stockbridge Road, the answer is "no time at all!". That's because this property currently has an excellent set of long-term tenants in situ at a rent of £1250pcm.

http://www.rightmove.co.uk/property-for-sale/property-41329899.html?premiumA=true

As well as providing the new purchaser with an income stream from 'Day 1' this also saves money in terms of letting agents fees for finding new tenants.


Further still, property prices in Stockbridge Road have risen by £4681 over the last 6 months (that's over £180 a week!) due to it's ever popular location to Chichester City Centre, railway station and Chichester Gate Leisure Complex. Couple this with a 4.3% gross yield make this property, in my opinion, an excellent buy-to-let investment proposition. 

Thursday 19 May 2016

Buy-To-Let Deal of the Day - Two Bedroom Flat Offering 5.1% Gross Yield

Looking through Rightmove this lunchtime and noticed a two bedroom apartment which has recently come to market in Whyke Marsh, Chichester.


Located towards the south of the city, this development was build by Persimmon Homes around 4 years ago and comprises of around 60 purpose built apartments, maisonettes and houses.

With a property of this age you are less likely to inherit the maintenance problems you can encounter with older investments which can have an impact on the rental return. You would also have the remainder of the NHBC warranty should there be any serious issues with the property.

In terms of tenant profile we would expect the property to attract a working couple, or perhaps professional sharers due to its proximity to the city centre and railway station. 

Modern and up-together properties normally command a solid rent and similar flats have let for around £850pcm.

This could net an investor a healthy 5.1% gross yield based on a £200,000 purchase price, however, as with all leasehold properties, please remember to enquire about leasehold costs and ground rent before committing to an offer!

Friday 13 May 2016

Tax increases may drive landlords out of the buy-to-let sector, say London School of Economics

Tax increases for private landlords could result in some leaving the sector, while others may pass the costs onto the tenants via rent increases, therefore stretching household budgets and putting home ownership further out of reach.

This warning comes from a new report written by the London School of Economics, “Taking Stock” which analyses the private rental sector and its importance to the UK housing mix.

Despite the Government’s efforts to introduce institutional investment in the form of ‘build-to-rent’, the majority of private rented stock is made up from small private landlords with 2 or 3 properties.
The report also says that demand for rental accommodation is set to grow and that to match this demand there needs to be investment in the sector.

However, it points out that small private landlords are already treated less favourably in terms of tax, compared to landlords in many other countries. These include a surcharge on Stamp Duty Land Tax, removal of wear and tear allowance and reducing the amount of mortgage interest eligible for tax relief.


The authors of the report, Kath Scanlon, Christine Whitehead and Peter Williams highlight that the private rented sector has more than doubled in the last 15 years and now accounts for almost one-fifth of all dwellings.

The report also states that the growth of buy-to-let is, in part, a product of the low returns available to investors elsewhere in the market. High house prices and the need for large deposits make it unlikely that younger household will enter owner-occupation to the extent they did in the last four decades – increasing the reliance on a strong private rented sector.

By hindering landlords via new tax treatments this could damage returns and create disincentives to invest in the sector.

Kate Scanlon concluded: “The current Government favours institutional landlords, but even if that part of the sector were to grow rapidly, small landlords would still be the backbone of the industry"

“We need a private rented sector that works for the long term, with policies that reflect the housing challenges the UK faces”

Friday 6 May 2016

What would Brexit mean to the Chichester Property Market?

I don’t know about you, but I find that if you read the Daily Mail there are normally two topics that make the blood boil of ‘Middle England’. Bureaucracy from Brussels and House Prices. If we as a country are to unshackle ourselves from the chains of Brussels, could we inadvertently effect the second topic and make UK house values drop?  

If you read the newspapers, the Brexit debate seems to be focused solely on central London. Many commentators have said Brexit would mean central London would have a lower standing in the world, meaning less people would be employed in central London, with the implication of lower wages, fewer jobs etc., “in central London” – but we are Chichester, not Marylebone, Mayfair or any part of Zone 1 London.

Now on the run up to the vote on the 23rd of June, I predict that the ‘in’ camp will start to scare homeowners with forecasts of negative equity and the ‘out’ camp will appeal to the 20-somethings, who have been priced out of the property market, with the prospect of a new era of inexpensive housing. There are also fears from central London estate agents and developers who believe the bottom will fall out of the market if we were to leave.  In my opinion, the only reason the Mayfair’s, Knightsbridge’s and Kensington’s of central London are attractive to foreign buyers are political and economic steadiness, an open and honest legal system and a lively cultural life. None of his is threatened by Brexit.

…But again, we are in Chichester and central London is 72 miles away! We are the famous Cathedral City, home of the Festival Theatre and birthplace of astronaut Timothy Peake! Whilst the central London property market exploded after 2009, this explosion really and honestly didn’t affect the Chichester property market. So, putting central London aside, what would an ‘in’ and ‘out’ vote really mean to the 15,550 home owners of Chichester?

Initially, over the coming months approaching the referendum, I believe it will be like the run up to last year’s General Election. With the short-term uncertainty in the country, quite often, big decisions are put on ice and people are less likely to make big money purchases i.e. buy a property. However, in the four months up to last year’s Election, property values in Chichester increased by 0.76%, not bad for a country that thought it would get a hung parliament! So that argument doesn’t hold much weight for me.

Post vote, should the UK opt to leave Brussels, there would be a much more noteworthy impact. I believe that a vote to stay in the EU would see the Chichester property market return to a status quo very quickly, but the contrasting result could lead to some changes. The principal menace to the Chichester (and UK) housing market could be variation (in an upward direction) in interest rates as a result of a Brexit, which could theoretically see the cost of mortgages grow swiftly, pricing many out of the market, but then again two thirds of landlords buy without a mortgage, so that won’t affect them so much. Also, according to the Bank of England, 80.33% of all new mortgages taken out in 2015 were fixed rate. Looking at all mortgages as a whole, according to the Bank of England, 44% of all UK mortgagees have a fixed rate mortgage, but that’s 56% that don’t! So, if you aren’t on a fixed rate, talk to your mortgage broker, because they can only go in one direction! 

So in reality, if I really knew what will happen, I wouldn’t be a letting/estate agent in Chichester, but a City Whiz-Kid in London earning millions! However, I suspect that whatever decision the electorate of Chichester and the country as a whole make, over the long term it won’t have a major effect on the local property market. We have seen off ‘the end of the world’ credit crunch of 2008/9 and subsequent property crash, the 1988 Nigel Lawson induced post dual-MIRAS property crash, the 1979 Winter of Discontent property crash, the 1975 oil crisis that stimulated another property crash. We can even go back nearly a century with the 1926 post General Strike slump in property prices!

Today, property prices are 274.85% higher than 20 years ago in Chichester and are 15% higher than 5 years ago. So, make your own decision on 23rd of June 2016 safe in the knowledge that whatever the result, there might be some short term volatility in the Chichester property market. In the long term (and property investment is a long term strategy) there aren’t enough houses in Chichester to live in either to buy or rent, and until the Government allow more properties to be built, the Chichester property market will be just fine! Even if it has a little blip in the summer, there could be some property bargains to be had on the run up to Christmas.

Thursday 28 April 2016

Retirees would struggle without Buy to Let income

Almost three quarters (72%) of pensioners who have an investment property said they would struggle to make ends meet if they didn’t have the income from their buy-to-let, according to a poll carried out by Responsible Equity Release.

The reliance on income from buy-to-let in retirement is revealed, with eight out of 10 (81%) pensioners aged over 65, who own a buy-to-let, admitting their properties provide an important, even vital, boost to their retirement income, especially with low interest rates hammering retirees’ savings.


Responsible Life polled more than 1,000 retirees about owning a buy-to-let property. The majority, more than nine out of 10 (92%), said they are worried about the changes to mortgage interest tax relief and the impact on the profit they make from their investment property.

The buy-to-let tax changes coming into force have left many pensioner landlords considering whether it’s worth holding onto their buy-to-lets at all. Four out of 10 (41%) said although their buy-to-let property was a valuable income generator,they are now thinking seriously about selling it.

Steve Wilkie, managing director at Responsible Equity Release, said: "For many pensioners, having a buy-to-let property has been a life saver in this low interest environment. While their savings have languished, earning very little interest, and pension income has been hit hard by falling share prices, property income has remained strong.

“Without the income boost from their buy-to-let, many would really be struggling to make ends meet. But the Chancellor has yet again ignored UK’s retirees when he announced changes to the way buy-to-let would be taxed.

“George Osborne was so focused on taxing the rich, he forgot that a new tax on buy-to-let won’t just hit the wealthy, it will also hit those honest, hardworking people, who may have a single buy-to-let property, and were just hoping it would earn them a little extra income in retirement.”

Article courtesy of Landlord Today

Friday 15 April 2016

HMRC reports whopping 70% leap in transactions thanks to Stamp Duty Surcharge

There was an extraordinary 70 per cent leap in residential transaction volumes in March this year compared to the same month in 2015 - the first quantification of the extraordinary surge to beat George Osborne’s stamp duty surcharge.

HMRC’s provisional data shows 165,480 residential transactions in March, which was 41.5 per cent higher than in February.  

The Revenue says the large increase in transactions for March was very likely to be down to the 3% surcharge being introduced on April 1 for buy to let and second homes. It says the same applies to Scotland, where the Land and Buildings Transaction Tax surcharge - mirroring the stamp duty surcharge south of the border - was an issue.

HMRC mentions that buyers may also have been trying to beat new and much-anticipated restrictions on buy to let mortgages as a result of expected Bank of England reforms, expected to be rubber-stamped in the coming weeks. 

The figures produced by HMRC are dramatic enough but are in fact they are adjusted to take account of seasonal fluctuations and other irregularities. 

When these are not taken into account, the non-adjusted residential totals are even more dramatic with last month’s figure being 74.8 per cent higher compared with February, and 77.1 per cent higher than March 2015.

Article courtesy of Letting Agent Today

Monday 4 April 2016

Chichester’s “Generation Rent” to grow by 1,783 Households

 “The growth of the private rented sector, and the arrival of an investor class of buy to let landlords within it, is an issue that won’t be going away anytime soon, no matter what you read in the Daily Mail!” I said as I chatted over a coffee with a landlord client of mine last week.

Some commentators are saying that buy to let is about to die, with the new stamp duty changes and how mortgage tax relief will be calculated. Some say 500,000 rental properties will flood the sales market nationally in the next 12 months as landlords leave the rental market. Have you heard the phrase “Bad news sells newspapers”? Let me explain why buy to let in Chichester is only going in one direction – and not the direction the papers say it is going.

According to Sheffield University, buy to let landlord will continue fuelling the growth of the private rented sector in the coming decades. By their estimates (and they are considered a centre of excellence on the topic), the rate of homeownership nationally will fall to 50% by 2032 (today it is 58% in Chichester) while the rate of private sector renting will increase to 35% (interestingly, in Chichester it stands at 22% today). Therefore, the demand for rental accommodation in Chichester is expected to grow by 1,793 households’.


Chichester property values over the last six years have risen a lot more than average salaries, and as mortgage availability is dependent on your ability to pay, this means the dream of owning your own home is out of reach for many. This is at a time when the stock of council houses has actually withered (Nationally, the number of council houses in the last ten years has dropped from 3.26m to 2.18m – a drop of 31.1%).

Now it’s true that the Government’s efforts to fix the deficiency of affordable housing have focused on those who want to buy a home, ranging from Help to Buy and their much vaunted Help to Buy ISA and Starter Homes Scheme (an initiative offering a 20% discount for first time buyers). But if you are unable to save for the deposit, none of this means anything to the “20 somethings” of Chichester who still need a roof over their heads!

Currently 3,035 households live in private rented accommodation in Chichester. These are big numbers and a sizable chunk of the electorate. So whilst it appears Chichester’s “Generation Rent” will continue to rent and not to buy for the reasons set out above, Chichester’s buy to let landlords will be lifted by the projections of greater rental demand. Chichester and the area around it still offers the prospect of strong economic growth forecasts and has a reputation as a very desirable place to live.

Taking into account the projections from the experts at Sheffield University, the number of households in rental accommodation in Chichester will rise to over 4,800 in the next decade or so. This prediction in growth is even on the back of the Government clamping down on tax reliefs for landlord’s. 

Gone are the days of making guaranteed returns on buy to let property. For the last 20 to 30 years, irrespective of which property you bought, making decent money on buy to let property was like ‘shooting fish in a barrel’ – anyone could do it. But not now. Landlords must take a more considered approach to their existing and future portfolio, especially in Chichester. The balance of capital growth and yield, especially in this low interest rate world we live in, means Chichester landlords need to do more homework to ensure the investment in property gives the desired returns. One place for local landlords and homeowners to visit for such information is the Chichester Property Market Blog – www.chichesterproperty.com 

Monday 28 March 2016

Martin & Co Chief Executive Ian Wilson gives his thoughts on the future of Buy-to-Let in Sky News Interview

Last week you may recall that we released the Spring 2016 edition of our Market Intelligence Report.

This publication has been very well received and the content has been featured in The Times 'Bricks & Mortar' supplement, as well as The Metro.

You may have also seen Martin & Co Chief Executive, Ian Wilson, being interviewed by Ian King on Sky News. A short clip of the interview can be found by clicking here.

To request your free copy of the report please contact me on either 01243 887887, email matt.berry@martinco.com or pop in and see us at 12 Southgate, Chichester, PO19 1ES.


Similarly, if you are considering your next buy to let investment in Chichester, or thinking of entering the market for the first time, please get in touch with us - we always give our advice freely on a no-pressure, no-obligation basis.

Friday 18 March 2016

Landlords Market Intelligence Report - Spring 2016

This year, Martin & Co celebrates 30 years as the UK lettings industry's expert.

To mark our progression over the years we have produced a celebratory, special edition market intelligence report analysing the private rental sector and its evolution since the first Martin & Co office opened in 1986, when just 10% of all UK property was being rented privately.

Today that number has virtually doubled, with 19% of households privately renting, a total of around 4.3m properties. Thus, landlords and the buy-to-let sector now occupy a fifth of the UK market.

"The population will divide into those who own multiple properties and those who rent." Ian Wilson, CEO, Martin & Co UK PLC.

The number of mature adults renting today has also skyrocketed 346% since the 80s, and house prices have grown a staggering 768% in the same time frame, at double the rate of FTSE shares (342%).

Average rents today stand at just over £750pcm and are growing at 3pc a year.
Nevertheless, media coverage and government intervention ignore these facts and signal the end of buy-to-let.

However, the figures stack up in favour of all serious landlords, and the last 30 years paint an interesting picture for further growth in the future. Migration, rising property prices and a much higher student population mean that more households will choose to forego owning a house in favour of the stability of renting, an estimated 100,000-200,000 households a year for at least the next five years.

"There is nothing the government can do to stop this growth unless it acts to control rents and grant tenants security of tenure." Ian Wilson.

We have the expertise to help you find, buy and manage an investment property, with all the support you need from your local Martin & Co team in Chichester.

If you are interested in receiving a FREE copy of the latest report please contact me on 01243 887887 or email matt.berry@martinco.com

Monday 22 February 2016

Boshams Top 10 Most Expensive Streets

As we have recently been discussing the Bosham property market, I thought that you might be interested in finding out which are the most expensive streets in the PO18 postcode sector:

Rank
Street
Average Price
 Transactions
1
£1,819,840
38
2
1,712,713
3
3
£1,313,217
37
4
£1,297,501
4
5
£1,281,257
36
6
£1,266,900
5
7
£1,139,784
4
8
£1,078,652
11
9
£1,066,202
9
10
£1,056,825
4