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TODAY'S OTHER NEWS

Buy-to-let market ‘continues to thrive’

Despite ongoing uncertainty following the Brexit vote and recent stamp duty increase, the private rental market ‘continues to thrive’, according to letting agency Belvoir.

But the company’s chief operating officer, Dorian Gonsalves, fears that the situation could rapidly change unless the government rethinks its plans to reclassifying mortgage interest relief as anything other than a normal business expense, and introduce measures that will help boost the supply of much needed rental homes on the market.

“If there is no reversal in government policy with regards to mortgage relief taxation, and no measures are introduced to increase the supply of rental properties then landlords are likely to come under increasing pressure to raise rents,” said Gonsalves.

“If they [landlords] subsequently start selling off properties, this will clearly have a negative effect on the availability of good quality accommodation. We await the chancellor’s Autumn Statement on 23rd November with great interest,” he added.

Belvoir report that rents in Q3 rose marginally, with plenty more room for growth on the back of increasing demand from tenants.

A glance at the data relating to tenant demand shows that 88% of Belvoir offices reported an increase in demand for houses and 63.5% of offices reported an increase in demand for flats, while the majority of Belvoir franchise owners expect to see tenant demand increase further in Q4.

As far as rental price movements are concerned, Belvoir agents do not anticipate a major change in the run-up to Christmas, which is understandable as we enter the traditionally quiet festive season.

Gonsalves continued: “Historically Q2 and Q3 tend to show an increase and Q4 tends to be when there might be a decrease, as landlords don’t want properties to be left vacant at this time of year and so it is an opportunity for tenants to pick up a bargain.

“Two to three bedroom houses remain top of the list for stock shortages, with 81% of offices reporting a shortage of three-bed semi-terraced houses, 68% reporting a shortage of three-bed detached homes and 66.5% of offices reporting a shortage of two-bed houses.”

“Our analysis of rental periods in Q3 versus Q2, showed that almost half of franchise owners [46.3%] reported that the average time for tenants to rent was 13-18 months, and over a quarter [27.78%] reported the average time in a rental property was over two years,” he added. 

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    The changes will come after the Autumn statement if it is clear that the government wishes to continue with its Landlord tax change proposals. It is then that the rents will start to increase and there will be many b2l houses empty but on the market.

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    I've already sold in London because the impact of s.24 would have turned a modest profit into a loss due to the new [irrational] tax liability. My 2 bed flat had been providing much needed good quality accommodation to young people for 10 years, but the previous Chancellor imposed a new tax on ONLY smaller landlords, while permitting the large [limited] property companies, and [strangely] holiday let owners serving the leisure industry [not providing much need rental homes!] to escape the tax. Not only is that unfair, it is perverse and irrational, and will have a devastating impact on both the private and social rental market.

    Most small landlords are caring, provide good quality accommodation, are responsive to their tenants needs, and do not make huge profits. So why punish them for providing that service? They will be forced to sell, and it won't be first time buyers who pick them up at a bargain price, it will be the big landlords getting even bigger, and even less accountable to their tenants! Well done Osborne! For all those charities that forced his hand ...be careful what you wish for; you may [will] receive it!

    My flat did not go to a first time buyer; it went to an older couple who had sold up and bought a cottage in the country, but also wanted a flat in London. 2 more beds removed from the rental market!

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    The article states that 'the buy-to-let market continues to thrive'. This may not last forever and isn't even the case in all areas due to the new tax laws that will come in to play next year and potentially higher rates from lenders.
    Student Tenant (www.studenttenant.com) are here to help any student landlord. It is completely free to advertise your property and it will be listed on Rightmove and Zoopla for full national coverage. This will save the landlord money immediately or when the squeeze really kicks in.

    The letting agency model is changing. Student Tenant also charge fixed management fees rather than high street agents that take a percentage, which obviously rises as rents rise - for no extra work! Greedy high street agents!

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