Summer Budget 2015 – Landlords Reactions

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

Very good!

I do think there are three very distinct housing markets in the UK.

1. London & SE "investment property" (which is now cooling) as Russia and China et al confront uncertain times.

2. London & SE where prices for HOMES have risen considerably and might be in a bubble, limited by affordability

3. Rest of the U.K. Where prices are stagnant or even lower than the 2007 peak.

The lies, damn lies and statistics are even less meaningful without being aware which market sector the author is referring to.

Grainger share price has risen quite a bit on the 5 year chart from under 100p to about 250p iirc, but was well over 625p on the 10 year chart before the 2007 crash.

So a pinch of salt with their figures, but it does look like the market should not drop greatly, when the "great BTL sell off happens in 2016, er 2018, er 2021, er if it happens. It is reassuring companies, incorporated LLs and unencumbered LLs are around to put a floor on the eagerly awaited hogwarts 50 to 90% expectations. They just might miss the boat.

Sure prices will go up in a non straight line, there will be dips, but pent up demand, greater expectations of a decent house, and many more arriving every year, will fill all projected increases in building so far proposed.

For a good read:
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/501065/EHS_Headline_report_2014-15.pdf

Seems to me it blows a lot myths out of the water.

A big part of "the crisis" looks like its a rise in the under occupancy of owner occupied homes - 2 million more since 1995

PRS takes on the worst, oldest housing stock and makes it better.

etc...

From Grainger:

"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)."

Simple analysis of the above demonstrates av rent per unit to be £12,500 pa or £1041.66 pcm as the initial gross yield , ....i cant imagine they are planning to reduce the yield so it will increase from this in time.

considerably higher than the national average , and appox 20% higher than in Salford itself (based on 1 & 2 bed units)- so Harry and co should take note of the projected rent grainger is looking for and understand that it is more likely to raise the local prices than lower them.

http://www.home.co.uk/for_rent/salford/current_rents?location=salford

Interesting that. 20% above average price, increase is approx the fig Private LL need to counter Gideots new tax regime.

On a wider scale ave rent of the 600 unit development @ £1041.66 is a whopping £301.66 above uk av rent, representing an increase of 40.76% above the uk av rent of £740 pcm

When London is excluded, the average UK rental value was £740pcm(Jan 16) - this is 5.5% higher than the same period last year (£702pcm) source:
http://homelet.co.uk/homelet-rental-index

Yesterday while playing monopoly with my kids we decided to play the new George Osborne rules. Not only is there a banker, there is a tax man.
Every time you land on something and want to buy it you also have to give an extra m$1 to the tax man. When you land on somebody else's square and pay rent, they take your money give it straight to the bank and then also have to pay an additional m$1 to the tax man. So owning the property and receiving the rent makes you out of pocket.
Funnily enough the game didn't last very long, everyone got frustrated and ran out of money and the only people who made money were the bank and the tax man. You were better of landing on the jail. I wonder if the makers of Monopoly will be changing the rules of the game in light of the changes, I doubt it it wouldn't take off!

Hi Trendo.Funny old place Salford Keys.I invested a fair sum in in the Exchange Key commercial development by way of a Master Trust in March 1998 along with many others some who invested millions of pounds.The properties were disposed of at a loss in April 2014 and the the trust wound up.I and my fellow investors lost a massive 91% of our
original investment

What has the Chancellor ever done for Buy to Let?

http://www.ftadviser.com/2016/02/18/training/adviser-guides/what-has-the-chancellor-ever-done-for-buy-to-let-OrW47JWzsNbws1gtFu421I/article.html

"MPs have finally waded in to criticise George Osborne's madcap move to target landlords in the buy-to-let sector, with some predicting it could even damage Britain's economic recovery."

"As predicted, the plans to penalise landlords by hiking up stamp duty has now attracted the attention of fellow Commons members, which should hit a nerve with the Chancellor."

https://www.simplelandlordsinsurance.com/landlord-news/buy-to-let-stamp-duty-rise-rent-increase

Not a new article, but still worth sharing...

"Scrapping buy-to-let tax relief will push rents up, warns lenders' group"

http://www.theguardian.com/money/2015/oct/20/buy-to-let-tax-relief-rent-increases-imla

Please can everyone SIGN and SHARE the below petition against George Osborne's stamp duty hike:

https://petition.parliament.uk/petitions/114140

One of Harry's gang is starting to realise that there is unlikely to be a hpc:

"HPC renter-savers may not get exactly what they want, but we're not going bankrupt whilst we wait to see what happens."

Pretty sure most of us wont be going bancrupt anytime soon either !