Landlords: Refreshing The Way You Rent – Letproof.com

The past year has not been filled with the best news for UK Landlords; there have been an abundance of hurdles thrown in the direction of the buy-to-let Landlord and costs only seem to be rising.

Let’s begin with the tax changes; Buy-to-let landlords were hit with the announcement last year that their tax relief was being ‘phased out’ to mean now paying tax on their ‘turnover, rather than the difference between rental income and mortgage interest’ and this was expected to slow the buy-to-let market. April 2016 then saw landlords suffer a 3% increase on stamp duty. And earlier this year the Autumn Statement landed some great news for tenants and potential renters; there will be no more estate agent fees charged to tenants. This was, however, bad news for Landlords as it meant a high likelihood of them now footing the bill for these fees. But landlords are finding certain ways to deal with these changes, registering as a LTD company to lower taxes is one solution being utilised.

There is a need for change in the way buy-to-let landlords are able approach letting their properties. Cutting out any unnecessary fees and costs is becoming vital to ensure profits. Letproof.com has been built on this premise; to improve the experience for landlords and tenants, because while all of this signifies hard times, the market is still there for buy-to-let landlords. The demand for rental properties is high, partially as a result of a slight decrease in those investing in buy-to-let. However it is also largely due to the fact that renting is proving to be increasingly popular. Populations are rising and the trends and attitudes toward renting have changed. Renting has become a popular lifestyle choice, and popularity is predicted to continue.Happy friends meeting at cafe with laptop

The market is also looking up for buy-to-let investors, the build-to-let scheme offers fresh encouragement to rent and a whole new area of investment opportunities. London Rental yields are predicted to rise in the New Year. Despite seeing a significant decrease over the past 2 years, 2017 will experience the benefit of fewer buy-to-let landlords entering the arena this year and a high demand for rental properties continuing.

A change is needed in attitude and practice. Letproof.com is offering an alternative to the traditional practice of letting properties via an agent. Letproof.com is a platform enabling landlords and tenants to connect directly, without the middlemen. A new concept that gives both parties more control over their letting experience, fewer costs and offers support and flexibility.   The platform is free for tenants and starts from only 10p a day for landlords. By signing up, tenants are free to search for their perfect home, and via the direct messaging feature, can contact landlords about their favourite properties.letproof-logo

In changing times in the rental market, Letproof.com may be one way to ensure lower costs and more control over your buy-to-let investments.

For more information on Letproof visit their website http://www.letproof.com

 

Tax Changes and the Buy-to-Let Landlords

Over the next three years the amount of tax owed by many buy-to-let landlords will double or even triple as a direct result of the changes that are being phased in from April 2017. Landlords who have been enjoying four-figure net annual profits could sadly end up facing large losses – and it is thought that if interest rates rise, then this will make the situation even worse.

As a Landlord in the United Kingdom today, you can’t help but feel slightly battered by the Government and rather than being praised for helping to provide accommodation when there is clearly a shortage in the UK of decent housing, Landlords are being hit hard with tax changes and law changes.

If the Government keep demonising Landlords, we feel that more Landlords will have no choice but to sell up and invest their money else where and seeing as though the Government can not keep up with the demand for housing, it seems ludicrous that they insist on battering the Landlords, who are indeed only trying to help.

To read the article from the Guardian in full click here.

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Top 10 places to buy-to-let in London, according to Portico Estate Agents

Over the past 5 years, all 32 London boroughs (and particularly those in central London) have experienced substantial property price growth, fuelled by a combination of record levels of overseas investment and historically low interest rates.

Whilst it is true that the recent reduction in the availability of interest-only mortgages and increases in stamp duty for the most expensive properties may mean that this trend will not be sustained indefinitely, it is certainly the case that, at the moment at least, central London property prices are at an all time high.

However, whilst property prices have increased substantially, rental prices have broadly continued to track earnings growth. As a result, rental prices have not increased at the same rate as property prices and yields have steadily declined in central areas for at least the past five years that we have been tracking them.

– See more at: https://www.portico.com/yields

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How many “Buy-to-Let” Properties do you own?

We came across an article featured on Simple Landlords Insurance and in the article they talked about how many properties landlords in the UK had in their portfolio.

We have one property in our “portfolio” and this was an inherited property making us “Accidental Landlords”. At one stage we would have considered adding to our “portfolio” but with recent changes to tax etc, we are less inclined to think that adding is a good option.

According to the statistics in the article the number of landlords with only one property dropped from 78% to 63% in the past 6 years. We wonder if this figure will remain static for a few years now, as people (like us) that would have bought another property on the back of an existing property, hold back on their plans due to having to pay significant increases in stamp duty.

Also the article talked about landlords seeing renting out property as a “nest egg” rather than a business and we are inclined to agree with this statement. In a landlord meeting we attended in April we met with many landlords who did indeed have one property and who did not consider themselves to be in business with that one property. We guess that the more property you own, the more work you do and therefore the more likely you are to feel that the running of the properties is akin to running a business.

To read the article in full please click here

A revolutionary way to let a property or a recipe for disaster?

Browsing through our endless emails from Google alerts we came across an article from Simple Landlords Insurance which caught our eye – “An estate agent is paying tenants first year’s rent” and it got us thinking…. Is this a revolutionary way for landlords to let their property or is it a recipe for disaster?

It looks like it could be a win – win situation for Landlords as they get their 12 months rent upfront and their property back in its original condition at the end of the tenancy, but could this idea be open to abuse?

The “cynic” inside us says yes.. it is a strong possibility that “rogue tenants” could abuse this system which could ultimately leave the estate agency out of pocket. Granted their are rent protection schemes in place that they could pay for, but they only work if the tenants are employed and guarantors could be also used if the tenant is unemployed / on state benefits.

Estate Agencies and Letting Agencies in the UK whether online based or high street based, need to keep ahead of the competition and what a competitive market it really is. We applaud agents that come up with great incentives to entice us landlords to use their services, but the business side of our head as opposed to the landlord side, thinks that letting agents should be a little more careful about the offers they use to entice landlords in, because it may mean they have a short lived life in the land of the letting agency. We would rather us landlords have a great service from a great letting agents than see our letting agents go bust after a year and then us have to search for another one to replace them.

Click here to read the article in full

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The UK decides to vote “Leave” but what now for UK Property

The dust has settled over the weekend and we have had time to adjust to the decision to “Leave” the European Union. Whether you voted to “Remain” or whether you voted to “Leave”, we are now facing a long period of uncertainty that will have a major impact on many of the personal decisions we make moving forward.

It would seem from the articles that we have read over the weekend that although we have made a decision as a country, it is actually how things will affect us personally that are concerning most people, which is ironic being that many people voted “Leave” for non-personal reasons.

From the viewpoint of the Landlord in the UK, we are facing a huge period of uncertainty as far as the housing markets are concerned and because no country has ever left the European Union, it is difficult for anyone to actually predict what will happen to property prices or the buy-to-let markets.

However, we do know that in the hours following the announcement that we would be leaving the European Union, shares in Housebuilder’s (Persimmon, Barrett and Berkeley) dropped by more than 20%, so does this mean that the housing market will fall dramatically?

Only time will tell, but Miles Shipside, Rightmove’s director and housing market analyst, stated: “Markets typically dislike uncertainty” and being as that is what the UK now faces it, it seems highly probable that house prices could lower as we pass through the two year period of uncertainty.

As for the Buy-to-Let sector, if property prices fall then investors can enjoy the benefits of purchasing property at lower prices, but given the recent changes in Stamp Duty, it may not be as simple as it would have been prior to the stamp duty increase. So yet again we face uncertainty as to how things will play out and we will just have to play the waiting game!

For more information on how the Property Markets will be affected click here 

UK Landlords will invest less due to tax changes

Since the Government announced last year that tax relief on rental income would be decreased and that stamp duty on buy to let purchases would be increased there has been a significant fall in new acquisitions by new and existing Landlords in the UK over recent months.

In response to the changes to tax , Landlords in the UK are opting to upgrade their existing properties and making the portfolio they have even better, rather than looking to buy more property to expand their portfolio.

A report from Paragon Mortgages  shows that only 9% of respondents intended to purchase a new buy to let property in the next three months, which is a figure that is down 14% from the previous quarter.

Now that they changes to stamp duty have been enforced it would appear that more Landlords within the UK are aware of the changes. According to the report, 76% of the respondents were aware of the changes and what the implications are for them personally.

Landlords are now also spending less of their rental income on mortgage repayments, which means that the average net rental yield is remaining at 4.7% for the third consecutive quarter.

John Heron who is the Director of Mortgages at Paragon said;”The Private Rented Sector is facing the prospect of a great deal of change as a result of the significant shift we have seen in fiscal and regulatory policy. Some Landlords are responding to this uncertainty by planning fewer new purchases and investing in their existing portfolios”

By purchasing less property and investing in your existing portfolio, we feel that this can only be an improvement for tenants. The Government changed the rules to allow more individuals to purchase property, rather than having all the housing stock eaten up by Landlords, so with Landlords buying less property and instead opting for improving their existing properties, we can see this as a positive  step.

Individuals that wish to purchase their first property can do so, as there will be more housing stock available and for those that wish to remain as tenants, they will have their rental property improved by Landlords looking to invest in making their portfolio nicer.