Government Urged To Step In As Almost A Quarter Of Landlords Lose Rent Due To Covid-19

 Newly released data from the National Residential Landlords Association has revealed the scale of the financial impact caused by Covid-19 on private landlords, with 22% saying they have lost rental income as a result of the pandemic. According to the research, 19% of those questioned had lost up to half of their usual rental income as a result of COVID-19. However, 3% had lost more than half. An analysis of the results by the NRLA suggests that among those landlords surveyed saying that they have faced a loss of rent, the average (median) loss was between £751 and £1,000.  Read more on the Property Reporter website.

https://www.propertyreporter.co.uk/landlords/government-urged-to-step-in-as-almost-a-quarter-of-landlords-lose-rent-due-to-covid-19.html

Calls For 80% Rental Income Guarantee For Small Landlords

Asset manager Spicerhaart Corporate Sales has called for the government’s 80% salary guarantee to be extended to rental income for small private landlords. The call follows measures put in place to protect tenants from eviction, as possessions activity has been frozen for at least three months. Mark Pilling, managing director of Spicerhaart Corporate Sales, said: “If there seem to be no consequences to non-payment, some struggling tenants will naturally prioritise other bills, and will be more likely to ignore attempts to communicate with them to manage the situation.” Read more on the Property Wire website.

https://www.propertywire.com/news/iamproperty-to-continue-paying-estate-agents-during-the-covid-19-crisis

PRS Landlords Need A ‘Stable Platform’ To Balance Social Housing Debate

More than a third of landlords are looking to cut their annual spending as rising running costs and higher taxes bite – just as the private rental sector (PRS) needs stable platform on which to balance “one-sided” social housing debate. Research released by specialist mortgage lender Kent Reliance reveals the average landlord now spends £3,571 per property in annual running costs, before tax or mortgage interest – equivalent to 32.9% of rental income. These costs have risen by 5.6% in the last two years without factoring in increasing taxes, having jumped by 28% – a rise of £771 – since the start of 2009. Read more on 24housing.

https://www.24housing.co.uk/news/prs-landlords-need-a-stable-platform-to-balance-social-housing-debate/

Chancellor Urged To Back Longer Rental Tenancies In Budget

RLA wants tax relief on rental income, which could increase each year a tenancy continues – up to a maximum of five years if the tenancy is renewed. Landlords are urging the government to back longer tenancies in rented housing to meet the needs of the growing numbers of families with children who rely on the sector for their home. David Smith, Policy Director for the RLA, said landlords recognise the demand for longer tenancies which provide stability for they and tenants alike. Read more on 24housing.

https://www.24housing.co.uk/news/chancellor-urged-to-back-longer-rental-tenancies-in-budget/

Landlords Are Losing Out By Evicting Tenants When They Want To Sell Up

Over half a billion of rental income is lost annually because private landlords are evicting good tenants mistakenly believing that they need to sell their properties tenant free. The average landlord loses over three months’ rent as a result of evicting tenants to sell and the loss to a single private landlord, typically with just one home to sell, ranges from £2,757 to £5,514, according buy to let marketplace Vesta. It concludes that the practice of evicting good renters is not only losing landlords critical income but it is also causing unnecessary distress and costs to thousands of long term tenants who have to find alternative accommodation. Read more on the Property Wire website.

https://www.propertywire.com/news/uk/landlords-are-losing-out-by-evicting-tenants-when-they-want-to-sell-up/

Buy-To-Let Slump Puts First-Time Buyers In The Driver’s Seat

Buy-to-let landlords are finally in retreat in the housing market, leaving young adults in a better position to buy a property, according to the latest data from mortgage lenders. The Council of Mortgage Lenders said lending in March was £21.4bn, down 19% on the year before, almost entirely due to landlords withdrawing from the market. A double whammy of tighter Bank of England lending rules, which have forced banks and building societies to insist on greater rental cover and higher deposits, plus new taxes on rental income, has made buy-to-let far less financially attractive. Lending peaked in March 2016, as landlords rushed through purchases to avoid a 3% hike in stamp duty. But since then, lending has gone into freefall. Read more on the Guardian website.

Landlords Scramble To Avoid Higher Buy-To-Let Taxes

Buy to let landlords are scrambling to avoid the impact of tax changes that come into effect next year. The Buy to Let Britain report found landlords were restructuring their portfolios to escape higher taxes on their rental income, which will be phased in from April 2017. Some landlords have set up limited companies while others have increased rents or transferred properties to family members. The average rent in Great Britain has hit a record high of £881 a month, and landlords indicated they intended to raise prices by an average of 5.4% – the equivalent of £571 a year for households. Strong house price growth has pushed the value of rented accommodation in the UK to £1.3tn, up by 16% in the last year to September. Read more on the Guardian website.

Ireland's Scrapping Of Buy-To-Let Tax Is 'Warning To Britain'

Ireland is reversing its 2009 policy that stopped landlords from claiming full mortgage interest tax relief on their rental income. Britain is introducing a similar policy in April next year. In his Budget statement made last week, Ireland's minister for finance, Michael Noonan, said landlords would be able to claim 80pc tax relief from next year, up from a current level of 75pc. Tax relief will then increase by another five percentage points each year until it reaches 100pc again. He said the policy was introduced in 2009 to "rescue the public finances" and that a housing crisis in Ireland made now an "appropriate time" to revisit it. Read more on the Daily Telegraph website.

Housing Minister Signals Return To CPI+1% Rent Formula

Brandon Lewis, Housing Minister, has signalled that social and affordable rents will return to an inflation-linked formula after the four year rent reduction period. Councils and housing associations were told by George Osborne that social and affordable housing rents would be reduced by one per cent per year for four years from April 2016. Powers to compel councils and housing associations to reduce rents are included in the Welfare Reform and Work Bill currently before Parliament.  The reduction over the four years will mean that by 2020/21 stock retained councils will suffer a drop in forecasted rental income of some £2.4billion and a loss of £30billion income over the 30 year business plan period. This will significantly affect the resources available for housing services and planned investment in building new council housing and investment in the existing stock. Read more on the ARCH website.

Ministers Urged To Examine New Buy-To-Let Boom In UK Care Homes

Private investors are being enticed to purchase rooms in UK care homes on a buy-to-let basis with the promise of large profits and rental income. The Bureau of Investigative Journalism has found hundreds of rooms being offered for sale for as much as £85,000 each. They offer “guaranteed” rental income of around 10% annually and a total return on investment of up to 188% over 10 years. Such buy-to-let room schemes are not regulated by the Financial Conduct Authority, while the Care Quality Commission, which oversees standards in care homes, says it does not have responsibility for providers’ financial sustainability. Servicing such high fixed returns could squeeze funds available for providing the actual care. Residents could also have to move if the care homes failed to pay their debts to investors and were forced to close. Read more on the BIJ website.

Buy-To-Let Returns 'Will Fall by 60pc in a Year'

Buy-to-let returns will plunge 62pc in the next 12 months, according to Britain’s biggest network of letting agents and property valuers. LSL Property Services predicts that by April 2016 total returns on buy-to-let, taking into account a combination of both rental income and capital growth, will be just 3.4pc, down from almost 9pc today. That return, which would be the lowest in at least four years, would be before mortgages, maintenance and tax are factored in, all of which could push landlords’ investments into the red. Read more on the Daily Telegraph website.

Buy-To-Let Puts £112bn in Pockets of British Landlords

British landlords earned £112bn from capital gains and rental income last year, in the latest example of the booming buy-to-let market. As would-be first-time buyers struggle to get a toehold on the housing ladder amid rising property prices and tougher mortgage-lending criteria, investors continue to pile in to the rental market. A report by mortgage lender Kent Reliance shows landlords made £67.2bn in capital gains, and £44.3bn from rent in the year to March 2015. The combined total represented an increase of £5.8bn on the same period a year ago. Read more on the Guardian website.