The stability in the property that has been brought by the most recent General Election is the latest of several positive announcements that look set to benefit British landlords this year. At the same time, tax and benefits change s are also affecting tenants in buy-to-let properties, having a ripple effect on landlords and their investments. So what are the biggest trends of 2015 that landlords need to stay aware of?
1. A majority Conservative government
We at Canonbury Management should probably confess to having a vested interest here. The stability of government delivered by the election result means that house sales and the housing market in general, are looking healthy in the short-term. In the months leading up to the election, there were warnings that the housing market would freeze up in the face of an uncertain result. Some momentary hesitancy before the election seems now to have given way to a new confidence, with asking prices for houses rising by £1.6% to an average of £286,133.
The election of 2015 was also beneficial because it means that the proposed Labour ‘mansion’ tax will not come into effect. Likewise, two-thirds of buy to let landlords had reportedly threatened to quit the market if a Labour government had introduced a promised cap on rent inflation. 80% of landlords were deeply concerned about how the election would have affected their investments.
2. Levels of demand in the capital are falling
Despite rent levels continuing to rise in the capital, demand for property is actually falling in the centre of the capital. This has been partially attributed to more cautious tenants who are more acutely aware of the gap between supply and demand in the London property market; indeed the only exception appears to be on properties in the highest price bands and the luxury market. Properties let in the most expensive price bands have risen by a third in the last year.
3. Sitting tenants are becoming increasingly popular with landlords
The number of landlords who have bought properties with sitting tenants is at its highest level since 2005. The North-East of England saw the largest uplift in landlords buying flats with tenants already in place. There is a great incentive for landlords to buy properties with existing tenants, as they have a source of income firmly in place from the point of sale.
4. There is a higher demand for semi-detached properties
There has been a marked increase in the number of landlords on the lookout for semi-detached properties. This suggests, among other things, that landlords are attempting to cater for the wide range of people searching for properties on the market, be they students, single young professionals, or families.
5. Buy to let is more stressful than a job!
Landlords are becoming more stressed by a number of factors in the buy-to-let market, including tax, dealings with Inland Revenue, rent arrears and red tape. In some cases, being part of the buy to let market is proving harder than the landlord’s day job. Rent arrears and dealing with a tenants’ complaints are chief amongst the worries quoted by landlords, followed by repairs to properties in third place. Landlords are becoming increasingly worried about securing finance to expand their property portfolios. A third of landlords cite void periods as their biggest worry.
1. A majority Conservative government
We at Canonbury Management should probably confess to having a vested interest here. The stability of government delivered by the election result means that house sales and the housing market in general, are looking healthy in the short-term. In the months leading up to the election, there were warnings that the housing market would freeze up in the face of an uncertain result. Some momentary hesitancy before the election seems now to have given way to a new confidence, with asking prices for houses rising by £1.6% to an average of £286,133.
The election of 2015 was also beneficial because it means that the proposed Labour ‘mansion’ tax will not come into effect. Likewise, two-thirds of buy to let landlords had reportedly threatened to quit the market if a Labour government had introduced a promised cap on rent inflation. 80% of landlords were deeply concerned about how the election would have affected their investments.
2. Levels of demand in the capital are falling
Despite rent levels continuing to rise in the capital, demand for property is actually falling in the centre of the capital. This has been partially attributed to more cautious tenants who are more acutely aware of the gap between supply and demand in the London property market; indeed the only exception appears to be on properties in the highest price bands and the luxury market. Properties let in the most expensive price bands have risen by a third in the last year.
3. Sitting tenants are becoming increasingly popular with landlords
The number of landlords who have bought properties with sitting tenants is at its highest level since 2005. The North-East of England saw the largest uplift in landlords buying flats with tenants already in place. There is a great incentive for landlords to buy properties with existing tenants, as they have a source of income firmly in place from the point of sale.
4. There is a higher demand for semi-detached properties
There has been a marked increase in the number of landlords on the lookout for semi-detached properties. This suggests, among other things, that landlords are attempting to cater for the wide range of people searching for properties on the market, be they students, single young professionals, or families.
5. Buy to let is more stressful than a job!
Landlords are becoming more stressed by a number of factors in the buy-to-let market, including tax, dealings with Inland Revenue, rent arrears and red tape. In some cases, being part of the buy to let market is proving harder than the landlord’s day job. Rent arrears and dealing with a tenants’ complaints are chief amongst the worries quoted by landlords, followed by repairs to properties in third place. Landlords are becoming increasingly worried about securing finance to expand their property portfolios. A third of landlords cite void periods as their biggest worry.