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TODAY'S OTHER NEWS

Buy to let will now be an attractive safe haven, says market analyst

The director of the website Home says that investment in buy to let will look like a highly attractive safe haven once the lockdown is over.

Doug Shepherd, whose website publishes a monthly market snapshot based on an analysis of portal property listings, says: “Given that lending rates remain low and look set to go even lower, thanks to the wider economic malaise and market panic, British bricks and mortar will continue to be a highly attractive safe haven for investors once the lockdown has ceased.”

He says that buy to let, which had recently looked unattractive because of the government’s attacks on it in terms of higher taxes and stricter regulations, will now look increasingly tempting to landlords who may otherwise have been anticipating quitting the sector before the Coronavirus crisis.

“Shortages of rental property still affect the whole country and the scarcity is worst in London where rents were already skyrocketing before the pandemic took hold” he says in his latest market report. 

“Moreover, the possibility of a reasonable return on investment might entice more investors to return to the private rental sector and thereby redress the pitiful shortfall in available homes to rent.”

Shepherd’s data shows that newly-available rental property across the UK - already in short supply before the virus crisis - is now down 23 per cent year on year. 

“Competition for the dwindling number of available properties to let has driven up the mix-adjusted average rent in Greater London by 9.0 per cent in just 12 months” he adds.

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    Can I have some of what he's on?

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    They need to scrap S24 recognise btl as a self employed business.
    Instead we get zero help with CD19
    Taxed to the hilt.
    Then they use us to provide free housing.
    Yet HS can rent property at 80%market rent and pay no tax

  • Mark Wilson

    What about rent controls! I see that one lurking in the corner.

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    Rent controls don't worry me. I don't think they worry many landlords but happy to be proved wrong. I have/had a business ethic to never increase rents on sitting tenants though admittedly that had to change a little with S24.

    The issue is that many landlords will scrap the same ethic because they fear more control. If Government says you can't increase rents more than, say, inflation, then landlords will start doing that. Plus with all the QE we'll likely see inflation take off in a way we haven't seen in years so very unlikely that rents would keep up anyway.

     
    PossessionFriendUK PossessionFriend

    I somewhat agree with John, I infrequently increase rent and then always keep it below market rate for long-term tenants.
    Rent control, in my view, is just some 'smart, vote-catching concept' that won't really have a lot of impact on most landlords.
    Why does Govt and everyone else think that the PRIVATE [ business ] rented sector is any different from trying to ' Control ' the price of anything else ?
    Like Petrol, the only way to control price to end user, but Never the supplier, is by the proportion or influence of Taxation. Govt have tried that with Sec 24 and dismally failed, by less availability and increased rents.
    So many Govt policies are having the opposite effect.
    A sharp chisel in the hands of a skilled carpenter is a useful tool that can create craftmanship. - Put in in the hands of someone who 'doesn't know how to use it' and it becomes dangerous with consequences for the user and those around them.
    It will sound great and be " Chalked-up as yet another victory for the 'so-called' down-trodden poor Tenants "

     
  • Paul Barrett

    Rent controls will simply result in LL turning to self management so they can personally collect the brown envelopes that will be used to evade rent controls.
    Tenants won't have much alternative or be homeless.

    Rent controls will cause a decline in ALL property prices.
    A lender will only be able to lend based on reduced controlled rents IRRESPECTIVE of what the LL is actually receiving.

    Rent controls will destroy the leveraged rental sector.
    That is 50% of the PRS.



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    Safe haven not so sure. Shafted by the tax rules with a likely slump in property prices followed by a very slow return on the investment, I see the phrase as a naive spin. I don't believe a landlord is basing his decision to invest on supply. Either the removal of the section 21 or the now updated 18 pages of some highly irrelevant questions on the N5b is designed to create sitting tenants, a betrayal of some magnitude dressed up in government rhetoric. If the government back in Maggie Thatchers day recognized that rising housing needs is best served by the private sector, then by gosh the government had better look after the landlords lest they pull the plug, not buy more.

    Paul Barrett

    Unfortunately this is exactly what happened in Ireland.
    LL certainly pulled the plug and that was with a far less onerous version of S24 compared to the UK version.

    However there are still too many lettings properties.
    Until there are 10 tenants chasing every rental property there will be no real effect on the market.
    It will take about 3 years to reach that stage.
    During which time existing LL will continue to suffer.

     
  • PossessionFriendUK PossessionFriend

    I think there ARE 10 Tenants chasing each property now.
    Some properties a lot more than that, some maybe a little less and taking a longer time.
    But there is certainly Over-demand and Under-supply, no question.

    Paul Barrett

    Interesting.
    That is not my experience or rather lots of interest but many not willing to pay market rents.
    So I consider those as not serious applicants.
    I only have one or two serious interests per property.
    There is a distinct lack of suitable tenant applicants

     
  • PossessionFriendUK PossessionFriend

    Agree there's lack of suitable applicants, but even the unsuitable ones are still chasing properties,
    Its the demand I was referring to ( not suitable applicants ;-)

    Paul Barrett

    Yep I believe as you suggest that the demand is out there in their millions.
    Just LL don't wish to let to them for all the obvious reasons.
    The principal reason being the inability to get rid of rent defaulting tenants in timely fashion.

    LL therefore have to be extremely careful who they take on.
    Change the eviction laws to allow rent defaulting tenants to be got rid of quickly and magically LL will take on all the dud tenants.

     
  • Ingrid Mott

    Yes, defaulting tenants need to be OUT. This wont be the governments stance - they want to keep homeless figures down, keep them off the streets, they want tenants votes, they want to shove all responsibility for their failings re housing provision onto us ... but they want total authoritarian rule over we landlords. We are the easiest group to control. We are a minority group. We need a way of fighting back, like students do, like workers unions do, like even pensioners did when they were being financially pushed to the limit many years ago. It seems landlords just are sitting targets to be bled and controlled and held responsible when this virus problem is over we should have a countrywide MASS EVICTION DAY as protest. We cant seem to do anything as a group to take the government to task except grovel. Housing is as important as food and warmth but landlords are just

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    totally agree. Landlords are hard working people and need to unite together to make their voice for fair and justice

     
  • Ingrid Mott

    Cash cow fodder.

  • PossessionFriendUK PossessionFriend

    Yes Paul, Ingrid,
    see the article on my facebook page @possessionfriend title Good Tenants Advice and the attached article there from Joe Speye with my similar interpretations

    Paul Barrett

    Hmm!!
    Read your fb piece.
    Very worrying.
    Just makes me even more determined to get out of the AST or eventually AT lettings market.

    If the current eviction process isn't already dysfunctional enough what you suggest may be introduced makes bankruptcy certain for any leveraged LL attempting to remove a rent defaulting tenant.

    The new potential pre-action protocols won't even allow a LL to get rid of a rent defaulting tenant if the Court believes a payment plan is viable.

    It could take years to get rid of a rent defaulting tenant.

    By all accounts it takes years to get rid of rent defaulting social tenants.
    But of course HA and councils have deep pockets and can cover years of defaulted rent.
    Not so private LL.
    I sincerely hope I'm out of the PRS BEFORE what you suggest comes to pass.


     
  • PossessionFriendUK PossessionFriend

    The only glimmer of optimism I can offer in regard to the Pre- Action protocol, that there has been absolutely nothing further from the Master of the Rolls on it ( which given how quickly he responded to the staying current cases, is surprising ) I've put a message into MHCLG about two weeks ago formally asking for the Master of R's response, and I've chased this up by telephone. They told me the normal response time was 15 working days. Personally, I think the Master has turned MHCLG down and their too embarrassed to publish that. ?

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