The lettings agency chain Winkworth says the attraction of buy to let is waning for both institutional and individual investors.
This is because of mortgage interest relief changes, the scrapping of the ‘wear and tear’ allowance and the introduction of the three per cent stamp duty surcharge.
Winkworth says that institutional and individual Investors - once besotted with the residential sector - are increasingly investing in multi-use buildings.
Adam Stackhouse, head of development and commercial investment at Winkworth, says the trend is down in part to taxation: “With multi-use buildings, entry costs are lower with a reduced rate of stamp duty. They are very tax efficient during ownership and it’s a lower level of capital gains when you look to sell the property. There are also inheritance tax benefits as well.”
He says the VAT rating on buildings under construction also needs to be reviewed to accelerate regeneration of areas and specifically help conversions into multi-use buildings with the necessary combination of retail, office and residential uses.
He continues: “We need to see the five per cent VAT rating extended beyond listed and heritage buildings and applied to a regeneration/benefit to the community type assessment model. Reduced VAT levels may harm the government in the short term but it would speed up the creation of these hybrid buildings and bring renewed energy to city centres.”
Winkworth says that the current tax burden - particularly business rates - means businesses are effectively incentivised not to have a high street presence, leading to issues surrounding the appeal and long term viability of high streets.
Just last week Foxtons warned that rental supply was plummeting, partly down to landlords exiting the sector. The result was soaring rent levels.
It says rents were up 23 per cent in the year to date compared with the same period of 2021. Central London produced the highest average weekly rent at £627, a 33 per cent increase on 2021. Supply continued to be unseasonably low, with new listings decreasing 40 per cent on last year.
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I've dealt with winkworths , I no longer do , take from that what you may
All letting and estate agents are all rogue. No one needs
a register for them!
Nick, some are very good so better not tar them all. There’s
a great deal of good one too that provide a great Service and employ a lot of young people which are much needed jobs.
The 20% VAT tax added to their
Bills is enough to put LL off using them in addition to so many other costs.
I’m sure there are. I was just being facetious. In my own experience though they are not good at all. My agent let dreadful people
In on benefits who pay late, break things, complain for improvements and send me compensation letters. If they had done what I paid them to do I could have avoided all my troubles. I didn’t meet them first as i considered because of S21. Big mistake.
The agent always try’s to rip me off with their tradesmen costs something chronic.
I agree, I have a very good independent local agent that I've used 20 yrs now we get along fine, I would also agree with Nick that there many very bad ones, generally the large nationals that employ young wet behind the ears boys and girls
As with any industry it's a mixed bag. There are some excellent agencies out there, usually but not always the smaller independents who focus on smaller patches, the larger ones by virtue of their size have no flexibility and are able to cater to a local clientele or specific need. Computer decides everything from Cardiff to Bognor.
Any decent entrepreneurial agents move on very quickly or get promoted into more senior positions and become part of the policy machine. That’s not to say you can’t have an excellent individual operator in a high performing corporate office, but it won’t last for long, by design they are not natural bedfellows, and when that person leaves or is promoted, the office declines.
I’ve worked for both. The bigger agencies are good place to cut your teeth, the training is generally very good, job security/tolerance for poor performance greater, but rewards poor as a result and the rigidity suffocating if you are an extroverted salesperson. Independents encourage agents to be creative and entrepreneurial, everyone is a fee earner, expectations are higher as they need to be for a small business trying to grow, but so are the rewards.
I've always found it illogical that repairing, renovating or extending an existing building to make it habitable and provide additional much needed accommodation incurs a 20% VAT penalty whereas totally new builds are VAT free.
Even demolishing an existing building to build a new one is VAT free even without any net increase in accommodation.
That’s why you often see perfectly good buildings knocked down and then a new one built in it’s place. Financial that’s the way to do it.
fOXTONS !! HAS ANYONE SEEN WHAT THEY CHARGE IN COMMISSION, ESTATE AGENTS, I THINK WE ARE ALL PAYING FOR THEM TO RUN ROUND IN THEIR FANCY SUITS AND CARS, SO I CANT SEE WHY THEY ARE WORRIED
Reduced rental stock …. That’s what the government wanted right??
Yes apparent Bojo said he wanted to shrink the PRS I heard. So the policies they put out are to do just that. They are not interested in the tenants or the PRS industry. They want people on the ladder.
This site is getting very good at finding articles that state the bloody obvious!
Government appear not to give a monkeys on the chaos that they are creating and it is without doubt to me that S24 is the main reason rents have gone ballistic.
Existing private landlords are exiting the market due to S24 and other punishing legislation.
It is still a good market for those with no mortgage, but for all those, like me, whom do, then it is time to exit.
Institutional Investors are heading to BTR for lifetime profits at the cost of tenants whilst accusing good PRS Landlords of benefiting from rents-ironic.
Shelter, Politicians (from all parties), London’s current mayor, their associates/families/clans, John Lewis, Legal & General, Lloyds, Halifax, Aviva, other banks are all jumping at the chance of BTR lifetime profits from the tenants.
It would be interesting to know what actions Shelter would take to evict a rogue tenant for unpaid rents, property damages etc. from Shelter’s BTR portfolio.
Time will tell.
I have nearly forgotten the headline but sure no difference they all have the snout in the trough. I had a what I thought was a very good proposal to build a house had the plans calculations everything in place but repeatedly refused by Council, 4 times in fact & 2 Appeals costing me thousands even got light calculations when they came up with that. The first proposal was perfect but each time refused a new proposal has to be significantly different to be considered so each time it became more stupid and even been refused under Section 70a no need consider.
I now thank them for do doing me a favour if I had got permission I would have done it and being an NHBC member at the time would have had the 10 year guarantee but what for me to finance it pay all their fees and work like a dog to create a house for free for council to have C/tax every year since & if let thousands more p,a tax on income. They lost a property it saved me a load of work + extra hassle now to deal with along with what I have. Well done
Top marks
I've had similar experiences with both Norwich city council and my local council Breckland because all those councillors are failures in the real world they they hat those of us that succeed
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