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How will the general election impact renters and buy-to-let landlords?

June 25, 2024June 25, 2024 interestratesinfo

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Private renters and landlords make up a significant portion of the UK electorate. With this in mind, it should come as no surprise that politicians have been appealing for their votes as we race towards a general election on 4 July.

Around 35% of people in England live in rented accommodation, according to the latest English Housing Survey. Sixteen percent are in social housing, while 19% are in private rented accommodation.

Meanwhile, around 13% of people in Scotland and Wales are private renters, versus 16% in Northern Ireland. It should be noted that a lack of regular data in Wales and Northern Ireland means we have to rely on information from the 2021 Census, so these figures could have shifted slightly since then.

Meanwhile, there are currently around 2.82 million private landlords in the UK, based on income tax data from HMRC. That amounts to around 4% of the population.

Against this backdrop, we look at the key policies each major party has promised when it comes to buy-to-let landlords and renters. How will a Labour or Conservative win affect you?

Buy-to-let: The rise of the professional landlord

June 19, 2024June 19, 2024 interestratesinfo

Buy-to-let has undergone some major changes in recent years and, as a consequence, the profile of a typical landlord has altered too. Emma Cox looks at how things have evolved and what opportunities property investors are seeking out in 2024

The buy-to-let (BTL) market has changed significantly in the last few years, largely due to a number of economic factors which have made BTL investments less beneficial for non-professional landlords.

Up until very recently, a large number of BTL investors were those who had inherited homes, or had held on to previous properties when moving – dubbed as the ‘accidental’ landlords.

Casual investors also looked favourably at BTL properties as a way to boost their income, especially heading into retirement. High house price growth, stable borrowing costs, attractive rental yields and tax reliefs made BTL properties a relatively safe option for non-professional landlords.

What’s the outlook for the rental market for the rest of 2024?

June 13, 2024June 13, 2024 interestratesinfo

The rental market is on track for a slowdown in rental growth to 5% in 2024. This is being driven by changes in demand and affordability, rather than any expansion in supply which should be a key focus area for any incoming government, according to Zoopla.

While a general election means the Rental Reform Bill failed to make it to the statute books, rental reform is still needed in the rental sector to improve the protections for existing renters.

The big policy focus of a new government should be on boosting the stock of homes for rent – both private and affordable – through increased housing delivery supported by additional funding and reforms to the planning system. Zoopla says this is the best option to improve the choice for renters and improve the quality of homes for rent. It’s important political parties set out specific policies to support the private rented sector in manifestos.

Growing trend of landlords investing in semi-commercial property

June 4, 2024June 4, 2024 interestratesinfo

Landlords wanting higher yields are increasingly looking towards semi-commercial properties for investment, research reveals.

Shawbrook Bank says that applications for new purchases are nearly double this year compared with 2023.

Using its internal data, applications for semi-commercial properties reached 24% in the first half of 2024, up from just 13% in all of 2023.

Shawbrook says the trend is down to a more stable market, allowing investors to diversify their portfolios with assets that offer higher rental yields.

More landlords planning to buy properties: Landbay

June 4, 2024June 4, 2024 interestratesinfo

Nearly half of landlords intend to buy property in the next 12 months. This is according to Landbay’s latest landlord survey, which reveals that 44% would invest in property, a significant jump compared to a similar survey at the end of last year in which only 32% said they would buy.

More than six out of ten of the landlords intending to buy said their main reason was to build a property portfolio. Nearly a third (31%) said it was because of an increase in the number of tenants. This compared to 26% in Landbay’s last survey. Some, (12%), based their intentions on a potential drop in house prices.

Most landlords who will buy are portfolio landlords, with 40% owning 11 or more properties and 42% having between four and 10 properties. But smaller landlords are also looking to purchase, with 19% owning one to three properties.

NRLA chief calls on the next government to instigate a new Renters (Reform) Bill

June 4, 2024June 4, 2024 interestratesinfo

After seeing five years of hard work in shaping the Renters (Reform) Bill for the private rented sector (PRS) evaporate when the general election was called, the next government must work ‘from scratch’ on a new law.

That’s the verdict of Ben Beadle, the chief executive of the National Residential Landlords Association (NRLA) writing to members on the organisation’s website.

He says the Bill was the government’s masterplan to transform the PRS with more security for tenants, the abolition of section 21 and the end of fixed term tenancies.

The controversial Bill was first mooted in 2019 with the NRLA working with its members and Government to amend and hone the plans so they were fair to landlords.

The discussions also enabled Ministers to honour their commitments to tenants.

Electrical Safety Inspections (installations and appliances)

May 21, 2024May 21, 2024 interestratesinfo

The Electrical Safety Standards in the Private Rented Sector (England) Regulations 2020 came into force on 1 June 2020 and apply to all tenancies created on or after that date in England from 1 July 2020.

These new regulations require landlords to have the electrical installations in their properties inspected at least every 5 years and tested by a person who is qualified and competent. Landlords will also have to provide a copy of the electrical safety report to their tenants as well as to the local authority if requested.

For most landlords in the private rented sector this will not require a change in behaviour. The majority of landlords already check their installations regularly so they can provide the safest homes possible. However to ensure every landlord can comply with these regulations, NAPIT have produced the following guidance on the requirements.

Landlords selling up leaving 2,000 households a month in England facing homelessness

May 21, 2024May 21, 2024 interestratesinfo

More than 2,000 households a month are facing homelessness in England because private landlords say they are selling up, with some blaming uncertainty caused by government delays to renting reforms.

Official figures show that more than four in 10 families who have asked councils for temporary housing after a private landlord ended their tenancy are in the predicament because the owner told them they were putting the property on the market.

Meanwhile, almost a third of landlords plan to reduce their rental portfolios and only 9% say they likely to grow them, a survey by the National Residential Landlords Association (NRLA) found. Stubbornly high interest rates are another key cause of sales, the association said.

Recent data showed that the number of children living in temporary accommodation in England had hit 145,800, a record high and up 12% in a year. The homelessness charity Riverside said this was evidence of a “humanitarian crisis unfolding behind closed doors in towns and cities across England”.

‘Blame the Government, not us, for rising rents’ says landlord peer

May 21, 2024May 21, 2024 interestratesinfo

Rising rents and lack of supply in the privately rented sector (PRS) are the result of long-term failure in government housing policy and is not landlords’ fault, peers were told during the Renters Reform Bill second reading last night.

Lord Truscott (main image) who has been a landlord for 30 years, said it was unfair to blame the current housing crisis on landlords when the government had repeatedly failed to meet their housing targets of 300,000 new homes per year.

Although the PRS had survived during buoyant times, it was now in serious trouble. “Landlords are being seriously squeezed,” he said.

“Some 1.7 million landlords have buy-to-let mortgages, and some face a tripling or quadrupling of their mortgage interest because of interest rate hikes.

“Capital values are so high, and rentals so relatively low, that the return on capital, even without a mortgage, is less than 2%. With tax and voids, a landlord may end up paying a tenant to rent from them in parts of the country.”

Landlords Make Radical Mortgage Changes to Ease Rising Costs

May 21, 2024May 21, 2024 interestratesinfo

Many buy to let landlords have made financial changes during the cost of living crisis to mitigate the rising costs of operating private rental units, including renegotiating mortgage finance, increasing rent or selling property.

That’s the claim in the latest Landlord Trends report, carried out by Pegasus Insight for Foundation Home Loans.

Landlords were asked to identify the changes they had made over the past 18 months: 30% said they had renegotiated their mortgage with their existing lender; 29% had increased rents; 25% had cancelled plans to purchase additional units; 22% had remortgaged to another lender; 15% had paid part of their monthly mortgage payment from savings or other non-rental sources; and 15% said they had sold a property to reduce outgoings.

One in six landlords now carry out more property management themselves in order to cut costs, while 8% had stopped using letting agents completely.

The research, comprised of 774 online interviews with landlords, was undertaken between March and April this year.