Summer Budget 2015 – Landlords Reactions

So, let me get this clear......

Tax payers money is being used actively to encourage corporates to invest in Build to Rent.

Tax payers money is being used to offer Help to Buy to first time buyers.

Tax payers money is being used to assist students, by way of student loans, to rent accommodation, increasingly from corporates with investors to satisfy.

Housing Associations are being actively discouraged from building or refurbishing existing properties by way of reduced funding and anticipation that Right to Buy will demolish the existing model.

At the same time, one of the traditional means of funding a first time purchase, by way of family assistance, is being actively discouraged by increased and rather complex new SDLT.

An equally traditional means to refurbish sub-standard existing homes is being threatened, also by SDLT. So long Homes Under The Hammer.

No wonder Mr. O. Wants to squeeze the PRS till the pips squeak.

I wonder when the corporates will launch mortgage products for tenants wanting to buy through the virtually inevitable, presumably tax payer assisted, Right to Buy from Your Private Landlord?

The large developers must be tearing their hair out if they haven't managed to get into bed with one of the Build to Rent guys.

Having just read the article re L&G lifetime mortgages, I wonder when they're goingbto enter the care home market!

Reply to the comment left by "Jon Pipllman" at "17/02/2016 - 15:19":

Harry , Harry Potter ...where are you ?....will this help your hpc quest ? 600 more properties denied to young families to buy and bring up their brood .......14% rent increases in last 12 mths and more planned, Harry my confidence in you is shaken, you had all the graphs and charts and one of you has even written a book on how not to buy property , you keep saying rent s CANT go up, ......whilst they have , are and will continue to do so, right in front of your very eyes, i am following your advice and mantras "leverage" is the problem - thanks for that - rents up to reduce my leverage down, there is a new leverage problem that you need to address now - the leverage of TENANT TAX direct to HMRC via LLin the form of not just leveraged LL survival move, but the unencumbered LL as well, an now the big institutions are are going to take rents where it is going to get really silly. It may be time for howarts to begin to object and direct their attention in a similar direction to individual LL , hey we are all really nice people, we knew it was going to take time for people to get their head around this and see what it actually going on, hopefully you are getting a clearer picture now and wll join us in our fight to save the PRS and keep rents at a reasonable level and save a better personal service delivered by individual LL rather than faceless greedy corporate institutions

▪ Build to rent PRS - As announced on 1 February 2016, contracts have been exchanged to acquire Clippers Quay, a c.£99m PRS development scheme in Salford Quays, which will deliver over 600 new private rented homes, along with commercial and amenity space. Once fully let, it should deliver over £7.5m of gross rent per annum (>7.6% initial gross yield on cost).

Peter Oborne thinks that George should spend more of his time in the Treasury:
http://www.dailymail.co.uk/debate/article-3445135/PETER-OBORNE-Cameron-axe-George-doesn-t-stop-juggling-jobs.html

I disagree. I think he should spend 100% less time in the Treasury, and make way for somebody competent.

Reply to the comment left by "Trendo " at "17/02/2016 - 17:51":

And these new builds get a 20% tax handout - of zero rated vat, that refurbishing does not.

But don't tell the goons on HPC that rents can and will go up with the Corporates and their double digit returns, and maxing up the rent on existing tenants, we, well I, don't want them snivelling back to the non incorporated PRS. No DSS, no HPCers, no pets. (I'd rather have pets.......)

P.S. Some say Gidiot is an idiot. No. Shrewd. Has Grainger made a contribution to Conservative Party funds? Yet?

Gidiot will be looking for a board job on companies like this when he does not get the top job when Dave goes in 5 years.

Reply to the comment left by "Chris Byways" at "17/02/2016 - 23:34":

The goons over at the Harry Potter Convention rely too heavily on innaccurate data even when it is clearly labelled as such. They Never know Where to find information that disagrees with their misplaced beliefs.

The ONS must be gospel of course or "burn me as a witch" ..

Hmmm... well here is the note from ONS on the figs direct from ONS themselves:

Index of Private Housing Rental Prices, October to December 2015 results...

"IPHRP is released as an experimental statistic. This is a new official statistic undergoing evaluation and therefore it is recommended that caution is exercised when drawing conclusions from the published data as the index is likely to be further developed. Once the methodology is tested and assessed, and the publication meets user needs, the IPHRP will be assessed against the Code of Practice to achieve National Statistic status. A complete description of the methodology and the sources used is included in the article Index of Private Housing Rental Prices - Historical Series along with the January 2015 article explaining improvements to the price methodology."

Anecdotally, i have been on the panel of LLs contacted regularly since 2003,. i have not been contaced for more than a year now, so that is >100 rental figs on "the chart" that have not been updated.

Also the chart that NeverKnowWhereToLook has based his arguement on is almost 6 mths out of date, which clearly doesnt allow for the reaction of LL to July announcements - which is only just beginning.

"If house prices decline, as they seem likely to with lower demand from speculators (and exiting speculators and continued construction subsidised by HTB likely to hold the supply side at or above current levels), then better off renters will move into owner-occupation once the market bottoms out and private rents will decline in real terms at that point because the average wages of the remaining renters will be lower"

Here is Graingers take on that theory;
"Rents - Strong demand and continued growth "

"Strategy - To capitalise on the compelling private rented sector (PRS) market opportunity in the UK"
"We will continue to increase and accelerate investment into existing and newly built rental homes, through re-allocating development team resources to deliver new PRS assets and by refocusing the acquisitions team to improve access to, and conversion of, opportunities. "
"We will retain our high quality, regulated tenancy portfolio, which delivers excellent total returns and cash generation to support our growth in PRS. We will continue to maximise the opportunities and competitive advantage that our market leading residential platform provides."

That doesnt sound like imminent hpc to me !!

...Then we have Idle & Wild goalie to deal with, "more houses rented" ..also means "less houses on market for OO" and with increased rents less chance for renters to save for deposits, ...def hpc is beginning then ?

http://otp.investis.com/clients/uk/graingerplc/rns/regulatory-story.aspx?cid=505&newsid=667914

Maybe time for some new wands from the wand shop

Reply to the comment left by "Trendo " at "18/02/2016 - 01:55":

The random fat giant is the best own Goal i have seen for a long,long time !...lol

Altho with the "level playing field" goals are being moved around a bit at the moment !

I think Grainger's figures on rentals speak for themselves: it is wholly clear that they expect rents to increase, as they did in FY16 and as they did in FY15.

FY16 new let rents were 7.8% higher and FY15 new let rents were 6.3% higher

FY16 renewals were 3.6% higher and FY15 renewals were 2.6% higher

Regulated tenancies (which are reviewed every two years) were raised 6.3% if reviewed in FY16 and raised 9.6% if reviewed in FY15

I remain to be convinced that Grainger is as good as it claims to be.

The switch from passively benefiting from reversionary surpluses as regulated tenancies end, to the much more active PRS rental model will be difficult to pull off.

The share price action since the announcement seems to indicate that I am not the only one who thinks that.

There are undoubtedly some potential advantages to tenants that come from having a good corporate landlord. But, just as a brilliant independent Butcher can thrive in a town where Tesco, JS, Asda, Morrison, Aldi, Lidl and Waitrose have shops, brilliant independent landlords can thrive in towns where Grainger, L&G et al have PRS units.

Reply to the comment left by "Jon Pipllman" at "18/02/2016 - 08:52":

A much larger spread sample than Grainger.

Actual achieved rental prices for new tenancies;

http://homelet.co.uk/homelet-rental-index

5.5% higher than the same period last year.