Landlords Call For Council Tax Relief On Empty Homes

Landlords are calling on Ministers to tell local authorities that they should not charge council tax on rented homes left empty because of coronavirus. A significant number of rented homes have been left empty because tenants have been unable to take up tenancies, or have chosen to move out to be closer to family during the lockdown. During this period landlords will become liable for the council tax on the property and have no realistic prospect of finding new tenants. Read more on the RLA website.

https://news.rla.org.uk/landlords-call-for-council-tax-relief-on-empty-homes/ 

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/

BTL Market Will Stabilise By 2021

A report by Shawbrook Bank and the Centre for Economics and Business Research predicts that activity in the BTL market will continue to fall until 2021, at which point the market will stabilise. The report uses a scenario analysis approach to chart the effect on the market of various government interventions over the years, such as changes to mortgage interest tax relief and the stamp duty surcharge, and projects this to 2023. It compares this with as picture of how the market would likely look if these had not occurred. Read more on the Mortgage Strategy website.

https://www.mortgagestrategy.co.uk/btl-market-to-be-stable-by-2021-shawbook/

Could Landlords Be Offered Tax Relief For Offering Longer-Term Tenancies?

Landlords are set to benefit from new incentives if they offer longer agreements to their tenants.  Perks could include clawing back tax relief that is currently being withdrawn from thousands of landlords, a leading property expert has suggested. The government wants to offer greater support to those who rent, as the number of people who do not own their own home continues to grow. Policies introduced could benefit landlords who comply.  Secretary of State for Communities and Local Government Sajid Javid indicated in his Conservative party conference speech that details will be revealed in the Autumn Budget on November 22.  Read more on the Daily Mail website.

Drop In Buy To Let Valuations Over April

Buy to Let valuations dipped to 7% of market activity last month as the cut to landlord mortgage tax relief kicked in. The proportion of Buy to Let valuations is six percentage points below the five year average for April. Buy to Let valuation activity is even lower than it was in April last year – when the stamp duty surcharge was introduced. The decline in Buy to Let valuations has likely been driven by the stamp duty surcharge and the cut to Buy to Let mortgage tax relief. As of April, landlords can only offset 75% of mortgage interest payments against rental income – down from 100% in March. Read more on 24housing.

Almost Half Of Landlords To Quit By 2020 Says AXA

Tax relief for landlords began to be phased out from 6 April 2017. AXA’s latest study of UK landlords reveals that far more believe they will be affected than Government estimates suggest, and almost half plan to quit the rental market by 2020, fearing they are being unfairly targeted. AXA’s research shows that more than 40 per cent of landlords believe they will be worse off as a result of the changes. This is despite the UK Government’s assurances that 82 per cent will not have any additional tax to pay. AXA found evidence that this change coming on top of a raft of legislation aimed at landlords in recent years means that almost half of private landlords will withdraw from the market by 2020. Read more on the ARLA website.

Tax Changes Put More Pressure On Buy-To-Let Landlords

On 6 April, buy-to-let landlords will begin to feel the direct effects of the next tightening of taxation of the sector. From that date, tax relief on landlords’ mortgage costs will be restricted to the basic rate of income tax. And, over the next three years, the proportion of their borrowing costs that landlords can offset against tax will taper down to zero. On top of this, landlords are affected by new rules restricting other deductible expenses that they incur from renting property, including reforms limiting tax relief for wear and tear in fully furnished properties. The government has published guidance and a series of worked case studies to help landlords understand how the changes will affect them. Read more on the CML website.

Rent Rises Are Inevitable After Tax Clampdown On Buy-To-Let

Buy-to-let landlords may have failed in their legal battle against planned government tax relief changes for buy-to-let homes, but the real losers will be private tenants. The rules that permit landlords to offset all of their mortgage interest against tax will, from April 2017, be phased out, restricting the amount of mortgage interest landlords can offset against tax on their property investments. By April 2020 Section 24 will mean higher-rate tax payers will only receive 50% of the relief that they currently get. With many landlords likely to face the prospect of having their profits unjustly wiped out, the majority of landlords will have no option but to recoup their losses through higher rents. Read more on the Home UK website.

Buy To Let Activity Saw Significant Increase In August

Buy to let activity increased by 12.7% in August as the sector successfully absorbed policy changes and enjoyed a post Brexit bounce, according to new research. Changes to the tax treatment of the buy to let sector looked to be choking off activity in 2015 and early 2016, says the latest report from Connells Survey and Valuation. Although the restriction of tax relief on mortgage finance costs to basic rate tax only, the removal of the 10% wear and tear allowance, and the introduction of additional 3% stamp duty surcharge hit the sector following the 2015 budget and the last Autumn statement, but the report explains that the August rebound suggests the Government’s changes are set to have been a short term problem for the sector. Read more on the PropertyWire website.

Nationwide Tightens Lending Criteria For Buy-To-Let Landlords

Nationwide building society is tightening up its criteria for lending to buy-to-let landlords ahead of changes to how much tax relief they will be allowed to claim against their repayments. Landlords who take new loans from the society’s specialist arm The Mortgage Works (TMW) will only be able to borrow up to 75% of a property’s value, instead of the current 80%, and will have to prove that their rental income is at least 145% of their monthly mortgage payments. Currently the figure is 125%, in line with most other lenders. The changes come ahead of new rules on mortgage interest relief for landlords, which will begin to take effect in April 2017, and as the Bank of England attempts to rein in buy-to-let lending. Read more on the Guardian website.

Landlords ‘Forced Into Debt’ If Interest Rates Rise By 2.5%

Buy to Let in seven out of 10 UK towns and cities could become unprofitable if interest rates rise by just 2.5% according to Property Partner. The average investment property would be making an annual loss of £325, the property crowdfunding platform report. Property Partner looked at more than 100 of the largest towns and cities in the UK, to see what impact interest rate rises, coupled with the changes to mortgage interest tax relief, would have on local buy-to-let markets. By 2020, buy-to-let investors will have lost higher rate tax relief on their mortgage interest payments. Read more on 24dash.

Almost Half Of Landlords To Raise Rent In 2016

With an uncertain year ahead for buy-to-let landlords, almost half (45%) are planning to raise their rents in 2016, and almost one in five (18%) are planning inflation-busting increases of more than 3%, according to a survey carried out by SpareRoom.co.uk. The most common reason landlords cite (38%) for raising rents is the additional costs incurred by new government legislation, meaning future cuts to mortgage interest and wear and tear tax relief, stamp duty changes and costs of the 2016 Right to Rent roll out will be felt by tenants as well as landlords. Other reasons for rent increases include rents rising locally (23%), expensive property repairs and maintenance (6%) and higher mortgage repayments (4%). Read more on 24dash.

3% Stamp Duty On Buy-To-Let Properties Could Raise Rents By £55 A Month

George Osborne’s decision to raise stamp duty for buy-to-let landlords will cost tenants an extra £55 a month in rent. Buy-to-let is on the rise. Lending to landlords was higher in the first nine months of 2015 than in any of the last six years. Rather than dampening the buy-to-let market and free up housing for first time buyers, the increased rent will make it harder to save for a deposit as tenants face higher monthly rent, mortgage lenders have warned. Landlords will also face greater tax on the profits from their properties from April 2017, with minimum tax relief dropping from 45 or 40 per cent to just 20 per cent. Read more on the Independent website.

Barclays Is First To Toughen Buy-To-Let Tests

Barclays has rushed to impose stricter affordability checks on aspiring buy-to-let landlords ahead of the Chancellor’s tax squeeze. In a bid to put the brakes on the booming buy-to-let market, the Government will impose swingeing cuts on the amount of tax relief landlords can claim on their mortgage interest payments, dramatically pushing up landlords’ tax bills. Barclays has responded to fears that buy-to-let mortgages will soon become unaffordable for many people, particularly when interest rates finally rise. To qualify for a new buy-to-let mortgage, its customers will have to prove their rental income covers at least 135 per cent of their monthly mortgage payments. This is an increase from the current level of 125 per cent – which is fairly typical for mortgage lenders. Read more on the Daily Mail website.

Landlords Bruised by U.K. Tax Rise Could Face New Loan Limits

The U.K.’s amateur landlords, already bruised by higher taxes when they buy rentals and lower rates of tax relief, could be facing a new blow. George Osborne told lawmakers in October that Bank of England will get powers to regulate the so-called buy-to-let market as soon as possible. The central bank may move as soon as Tuesday’s meeting of the Financial Policy Committee to curb lending for rentals. Governor Mark Carney moved to limit the riskiest loans to homeowners last year by setting loan-to-income limits for some mortgages. Lending to landlords soared afterward, leading Jon Cunliffe, the Bank of England’s deputy governor for financial stability, to warn that investors could amplify an adverse shock to the housing market because they might seek to sell their rentals. Read more on the Bloomberg Business website.

Scrapping Buy-To-Let Tax Relief Will Push Rents Up

Scrapping tax relief for buy-to-let landlords will constrain the supply of rented property and make life harder for tenants, a lenders’ group has warned. The Intermediary Mortgage Lenders Association (Imla) said measures that discouraged investment in private rental housing at a time of population growth and low supply would only push up rents. The organisation, which deals with banks and building societies that offer loans through brokers, said the removal of higher-rate tax relief announced in July’s emergency budget would push some investors into losses and raise the effective tax rate above 100%. Read more on the IMLA website.

Buy-To-Let Investors: 'Let Us Off Capital Gains Tax And We'll Sell To First-Time Buyers'

Britain's biggest representative body for buy-to-let investors has proposed that investors should be given tax relief on the gains they make when selling their rental properties - in return for selling the properties to first-time buyers. The Residential Landlords Association (RLA), which represents around 40,000 private landlords, has suggested the Government could "encourage" landlords to sell their properties to tenants and first-timer buyers via tax incentives. A survey of more than 1,500 investors found two in three would be "more likely to sell" if their capital gains tax liability was reduced. Read more on the Daily Telegraph website.

Housing Stock – Parliamentary Written Answer

Philip Davies: To ask Mr Chancellor of the Exchequer, what estimate he has made of the effect of changes to (a) tax relief to landlords and (b) regulations on buy to let mortgages on the number of homes (i) built and (ii) available to rent in the next five years.

Mr David Gauke: The Government expects the restriction to tax relief for finance costs for individual residential landlords to have a minimal impact on house building in the UK. Overall, the OBR believes the impact on the housing market will be small and, taking account of the other measures in the Summer Budget, have not adjusted their forecast for house prices. The Productivity Plan published alongside the Summer Budget includes a number of measures to make the planning system quicker, cheaper and more responsive to local housing needs.

HM Treasury expects a minimal impact on the supply of property in the private rented sector in the UK. The measure is expected to impact fewer than 1 in 5 landlords and will be introduced gradually from April 2017 over 4 years to give landlords time to adjust. The Budget also announced increased Rent a Room relief, which can help to increase levels of private rented accommodation. The Government is taking significant steps to support housing supply with housing starts now at a 7 year high.

Consumer buy-to-let mortgages will become regulated in March 2016 as part of the implementation of the EU Mortgage Credit Directive. However, independently verified government analysis suggests that approximately 86% of the market will remain unregulated, and that the costs imposed by this change are not of a sufficient scale to affect the supply of rental properties in the UK.

Half of Landlords Affected By Removal of Wear And Tear Allowance

Almost half (47 per cent) of landlords will be affected by the removal of the annual wear and tear allowance, according to new findings from the National Landlords Association (NLA). The research findings show that a quarter of landlords (24 per cent) let their properties fully furnished, with 22 per cent letting a mixture of furnished and unfurnished properties. Just over half of landlords (53 per cent) let their properties on an unfurnished basis. The news comes shortly after the government announced its intention to scrap the annual wear and tear allowance – which is only available for furnished properties – and replace it with a tax relief system that enables all landlords to deduct the costs they actually incur on replacing furnishings in the property. Read more on the NLA website.

Buy-To-Let Lenders Face Longer-Term Pain

Limits on tax relief for landlords could be a serious blow to specialist buy-to-let lenders, analysts at Barclays warned, as the changes in the Budget undermine some investors' income. Some banks will also end up being hit by the new 8pc additional tax on profits that George Osborne has decided to levy on the sector.  Mr Osborne's tax changes limit the tax relief landlords can gain from the interest payments on their buy-to-let mortgages. Previously they could set the cost off against their entire income tax bill. Now that relief will be reduced to the basic income tax rate of 20pc, so higher earners who pay 40pc or more will pay more tax on their rental income.  Read more on the Daily Telegraph website.