Buy-To-Let Market Plateaus In Q2 As Tenant Demand Stabilises

Tenant demand for private rental property is plateauing across the UK, as 45% of landlords report no change during the second quarter of 2016.  Landlords in central London were the only UK region experiencing a drop in tenant demand, while just over a quarter of landlords across the UK have seen demand rise.  Since last year’s Budget and Autumn Statement, when wide-reaching changes to the buy-to-let market were announced, landlord confidence has remained low, particularly in terms of landlords’ prospects for capital gains. Four in 10 landlords have increased rents across their portfolio over the past year by an average of 4%. Read more on the Mortgage Solutions website.

Two Bed Flats Considered A Good Bet For Rental Yields

One bedroom flats are considered a good bet for the most attractive capital returns over the next year, but two-bedroom flats will generate the biggest yield, according to a survey of landlords. The survey found that a quarter (25%) of UK landlords said that one bedroom flats will offer the most attractive capital gains over the next year, closely followed by student accommodation in university towns and cities (24%). Meanwhile, one in five (22%) landlords believe two bedroom flats will offer the best opportunities for capital gains while 21% suggested it would be three bedroom flats. Terraced houses were the fifth most popular option with 19%. Maisonettes were the least popular choice with only 3% landlords predicting capital gains. Read more on the Housing Excellence 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.

Generation Rent Renews Call for Rent Controls

The latest Buy-to-Let Index might bring a smile to investors’ faces but it has prompted Generation Rent to reiterate a call for rent controls and a state-led programme to build more affordable housing.  Rents have risen by 15.2% since 2010 – 3.6% beyond CPI inflation. The average rent across England and Wales has risen from £667 per month in May 2010 to £768 as of March 2015. Furthermore, annual rent rises have accelerated to the fastest pace in two years, with the average rent across England and Wales up 3.7% over the last 12 months.  The average landlord has seen a gross return of £21,078 over the last 12 months, before mortgage payments and maintenance costs have been deducted. Of this, figure rental income makes up £8,259 while the average capital gain amounts to £12,819. Read more on the Housing Excellence website.

Buy-To-Let Landlords Earn Returns Of Up To 1,400% Since 1996

Buy-to-let landlords have hit the investment jackpot by earning returns of almost 1,400% since 1996, leaving the performance of shares, bonds and cash trailing in the wake of Britain’s property boom. On average, £1,000 invested in a buy-to-let asset in the final quarter of 1996 was worth £14,987 by the end of last year, according to analysis by economists at the Wriglesworth Consultancy for lender Landbay. This was more than four times than the equivalent investment in commercial property, UK government bonds or shares and seven times the return on cash. Years of rising house prices mean that despite the slump after the financial crisis, property investors who bought 18 years ago are still sitting on large capital gains. Read more on the Guardian website.

Time for a Landlord Tax

In an age of austerity landlords have made £177 billion in capital gain alone over the past five years. On top of this they have received £30-40 billion in rent a year, including about £9 billion a year in Housing Benefit. Landlords are able to outbid owner occupiers who don't realise a cash return in the same way, making the housing market skewed in their favour. They get Mortgage Interest relief that isn't available to homeowners, many loopholes for releasing capital gain without paying Capital Gains Tax, and a special landlord tax break called the "Wear and tear" allowance. When they're making so much money, we don't think they should be getting such huge taxpayer subsidies. Read more on the Generation Rent website.