Buying a home would save average tenant £1,300 a year over renting

Low mortgage rates mean monthly repayments are less than rent for average three-bedroom house, says the Halifax

Despite rising house prices the average tenant of a three-bedroom house would save £1,300 a year if they could buy it instead of continuing to rent, according to research from the country's biggest mortgage lender, the Halifax. Even factoring in the cost of maintaining and insuring a home, the lender found that with today's low mortgage rates first-time buyers pay an average £677 a month to own a three-bed home, against the £787 a month they would pay to rent the same property.

The gap has grown since last year, when it was £93 a month cheaper to own, according to the Halifax.

The figures continue the reversal since the depths of the credit crunch in 2009 when average rents were £37 cheaper a month than buying costs.

At the time, banks were reluctant to back any but the least risky of buyers and mortgage deals for anyone trying to get a foot on the housing ladder were thin on the ground, with average interest rates of a hefty 4.92%; today it is 3.09%.

First-time buyers have been entering the housing market in growing numbers since early 2013 as lenders have become more willing to take on borrowers with small deposits, originally encouraged by the government's Funding for Lending scheme which channelled cheaper money to homebuyers through the banks, and later the Help to Buy scheme offering government backing for 95% loans.

Between April and June this year 79,900 new buyers entered the market, 24% more than in the same three months of 2013. But those left renting have seen monthly costs rise to record levels. On Thursday the website SpareRoom.co.uk reported that average rents had increased by 10% over the past five years, while the amount available to tenants to spend on accommodation had stagnated.

For many the rising cost of renting has made it increasingly tough to save for deposits, leaving them trapped in the private rental sector.

Halifax's figures show that buying has become cheaper than renting in all areas of the country except the East Midlands and East Anglia. In London, where both rents and house prices have soared since the financial crisis, it put the average cost of buying for those getting their first property at £1,308, while average rents on the same properties were £82 higher. The West Midlands had the same price differential, with buying costing £589 a month against an average rent of £671.

Craig McKinlay, mortgage director at Halifax said: "It is clearly encouraging that since 2009 there has been a significant decline in the cost of buying a home for those trying to get on the housing ladder.

"The improvement is due to a combination of lower mortgage rates and rising private rents. In contrast, market conditions for renters have deteriorated as rents have risen over the same period."

The housing minister, Brandon Lewis, said the figures confirmed that the government's approach was working. He said: "We've cut the deficit to keep interest rates low, built half a million homes and helped thousands of responsible, hard-working people purchase properties with smaller deposits through Help to Buy."

However, Alex Hilton, director of the campaign group Generation Rent, called on politicians to take action to help those faced with rising costs. "It's untenable to suggest this is an acceptably functioning market and in an election year, we expect parties to tell us what they will do to fix this. Ten million tenants are being milked like cattle and this cannot continue."

Most homebuyers taking out new deals are fixing their interest rates as expectations grow of an interest rate rise from the current record low of 0.5%.

https://www.theguardian.com/money/2014/aug/23/buying-home-cheaper-renting-average-tenant-halifax

Landlord association hits back at Corbyn's 'misguided' accusations

The Residential Landlords Association (RLA) has hit back at accusations made by Jeremy Corbyn in his Labour conference speech that private landlords are being subsidised by more than £9bn of housing benefit.

Corbyn attacked the Tory government’s record on housing and slammed the fact that official figures show that private landlords pocketed in the region of £9.3bn in housing benefit last year – double the amount they received a decade ago.

The Labour leader (right) said: “Look what’s happened to housing under the Tories: housebuilding has fallen to its lowest level since the 1920s; home ownership is falling as more people are priced out of the market; evictions and homelessness go up every year; council homes are sold off without being replaced.

“And another consequence is that we’re paying over £9bna year to private landlords in housing benefit.

“Instead of spending public money on building council housing, we’re subsidising private landlords. That’s wasteful, inefficient, and poor government.”

But the RLA defended private landlords and the role that the private rented sector plays in providing people with much-needed housing in this country. It was also quick to point out that total housing benefit spending for social rented tenants in 2014/15 hit £15.2bn, which was significantly more than the amount paid for those residing in the private rented sector, despite the private rental market being larger.

The RLA’s policy director, David Smith, said: “Millions of tenants rely on housing benefit in both the private and the social housing sectors, but proportionately far more is spent on social housing tenants than those in private accommodation.

“With the private rental market having doubled in size since 2002, it is inevitable that more housing benefit claimants will be living in the sector.”

https://www.landlordtoday.co.uk/breaking-news/2016/9/landlord-association-hits-back-at-corbyns-misguided-accusations

Will I pay CGT if I sell my buy-to-let to help fund a new home?

I’m hoping I don’t need to pay capital gains tax as I am using the ‘gain’ to help me move from one main residence to another

Q I would really appreciate your advice on capital gains tax (CGT).

I own a second property, which I have let out for the past 10 years. I have declared the rental income each year on my self-assessment tax return.

I am now in a position where I want to sell the second property and put the profit I have made towards moving out of the home I live in to another place. Do I need to pay CGT on my second property even though I am using the gain to help me move from one main residence to another? VS

A The short answer is yes, you do have to pay tax on any gain you make from selling your second property. What you plan to do with the money you have made has no effect whatsoever on whether CGT is payable.

You may have heard of “private residence relief”, which makes gains on a home that you have lived in for the whole time you have owned it CGT-free. Sadly, private residence relief is not available for a property that has been let for the whole time you have owned it, even if you are going to use the gain to buy a new home.

The good news is that you don’t pay tax on the sale proceeds from selling your second property. Rather, you take the sale price and then take off what you paid for the property 10 years ago plus buying and selling costs such as legal fees, estate agents’ fees and stamp duty. You can also knock off the cost of improvements to the property, such as a loft conversion or kitchen extension (but not regular maintenance costs because these can be offset against income tax on the rental income). Assuming that you have no other gains in the 2016-17 tax year, you can reduce the taxable gain by subtracting your CGT annual exempt amount of £11,100.

The bad news is that the gain after all the above deductions is taxable at 18% if you are a basic-rate taxpayer, or 28% if you pay tax at higher rates. Gains on residential property do not benefit from the new lower rates of CGT – 10% and 20% – which came into force on 6 April 2016.

https://www.theguardian.com/money/2016/sep/29/capital-gains-tax-cgt-if-i-sell-buy-to-let-fund-new-home

Property auction calendar – 19th-25th September

Property auctions are a good place for investors to pick up a bargain, and every week these events are taking place at venues across the UK, offering a wide range of properties for sale. Here are details of the property auctions taking place this week.

Here is the full list of property auction dates for September 2016.

19/09/2016         Savills (London - National)            London

19/09/2016         Bagshaws Bakewell         Derbyshire

19/09/2016         Rendells Chagford           Devon

20/09/2016         Countrywide Property Auctions                South Yorkshire

20/09/2016         North West Property Auction - iam-sold                Lancashire

20/09/2016         Cumbrian Properties - The Agents Property Auction        Cumbria

20/09/2016         REA Leinster Auction      County Kildare

20/09/2016         David Plaister Ltd             Avon

20/09/2016         Stags Honiton    Somerset

20/09/2016         Stags Taunton   Somerset

20/09/2016         Stags Wellington              Somerset

20/09/2016         The County Property Auction     Lincolnshire

20/09/2016         Kivells Callington              Cornwall

20/09/2016         Andrew Grant   Worcestershire

21/09/2016         East Midland Property Auction - iam-sold             Lincolnshire

21/09/2016         Smith & Sons     Merseyside

21/09/2016         Fisher German Denton Clark       Cheshire

21/09/2016         Shonki Brothers (London Road) Leicestershire

21/09/2016         Allitt Auctioneers             Lancashire

21/09/2016         Bagshaws Leek Staffordshire

21/09/2016         Graham Watkins & Co    Staffordshire

21/09/2016         Tayler & Fletcher Bourton            Gloucestershire

21/09/2016         Tayler & Fletcher Stow on the Wold        Gloucestershire

21/09/2016         Bagshaws Uttoxeter       Staffordshire

21/09/2016         Steve Gooch      Gloucester

21/09/2016         Astleys West Glamorgan

21/09/2016         Romans                Berkshire

21/09/2016         Auction House Devon & Cornwall             Devon

22/09/2016         North West Property Auction - iam-sold                Lancashire

22/09/2016         Tamlyn & Son    Somerset

22/09/2016         Morris Marshall & Poole               Powys

22/09/2016         Auction House Bristol & Somerset North               Bristol

22/09/2016         Whittaker & Biggs - Macclesfield               Cheshire

22/09/2016         McCartneys        Shropshire

22/09/2016         Nesbits Hampshire

22/09/2016         Wilsons (Scotland)           Ayrshire

22/09/2016         Besley Hill            Avon

22/09/2016         Whittaker & Biggs - Congleton   Cheshire

22/09/2016         Countrywide Property Auctions                Devon

22/09/2016         Bowen Son & Watson    Shropshire

22/09/2016         Greenslade Taylor Hunt Langport             Somerset

22/09/2016         Kivells Launceston           Cornwall

22/09/2016         Whittaker & Biggs - Biddulph      Staffordshire

22/09/2016         Nock Deighton  Shropshire

22/09/2016         Cooke & Arkwright      

22/09/2016         Durrants              Suffolk

22/09/2016         Boultons              West Yorkshire

22/09/2016         Gascoigne Halman Altrincham    Cheshire

22/09/2016         Andrews & Robertson   London

23/09/2016         Phillips Smith & Dunn Barnstaple              Devon

23/09/2016         Phillips Smith & Dunn Bideford  Devon

23/09/2016         Phillips Smith & Dunn Braunton Devon

23/09/2016         Phillips Smith & Dunn Torrington               Devon

23/09/2016         Auction House Symonds & Sampson       Dorset

23/09/2016         DNG Maxwell Heaslip & Leonard          

https://www.propertyinvestortoday.co.uk/breaking-news/2016/9/property-auction-calendar--19th-25th-september

European investors eye UK property post-Brexit

A significant drop in the value of sterling has seen a number of Europeans move to secure UK property investments while assets are below market value.

Since the Brexit vote, according to a survey conducted by BrickVest, an online property investment platform, there has been a shift in investor sentiment towards lower risk opportunities that offer income yield, with many investors targeting properties in the UK.

“Since Brexit, we also have seen demand pick-up for UK real estate from continental European investors who are looking to gain from the weak British pound,” said Emmanuel Lumineau, CEO at BrickVest.

Following the UK’s decision to leave the European Union, BrickVest has announced the launch of three new pan-European income-producing investment opportunities that it believes will be highly attractive and able to withstand market uncertainty by offering solid annual yields in a low-interest-rate environment.

The London-based firm allows investors to invest as little as €1,000 (£843) in what it claims is institutional quality property that previously was only accessible to large institutions such as pension funds, insurance companies and large family offices.

Lumineau added: “In light of Brexit and when income is the key priority to a lot of our investors, BrickVest prefers investments that provide strong diversification and increased stability throughout their hold period.”

https://www.propertyinvestortoday.co.uk/breaking-news/2016/9/european-investors-eye-uk-property-post-brexit

Surge in buyer interest offers room for ‘cautious optimism’ in prime London

There has been a significant rise in the volume of prospective property purchasers in the prime central London since the EU referendum, offering grounds for “cautious optimism”, despite a sharp fall in house prices in the heart of the capital, according to Knight Frank.

In the eight weeks following the EU vote, there was a 22.1% rise in the number of prospective buyers compared with the same period last year, as reflected by a 19% hike in the number of properties under offer and 49% increase in the volume of viewings recorded.

Greater interest in the prime central London housing market appears to have been fuelled in part by higher demand from overseas investors thanks to the sharp decline in sterling’s value against major foreign currencies in recent weeks, particularly the U.S. dollar, while home prices in the heart of the capital are rapidly falling; an attractive proposition for investors looking to buy property.

Home prices in prime central London dropped at the fastest pace in almost seven years last month, led by an 8.9% year-on-year decline in Chelsea.

“Whilst prices in Chelsea do seem to have dropped by more than other areas in London, this has taken a long time to transpire. As a result, we are seeing a return to the market of new buyers and a huge increase in viewings so it is having a positive impact on activity,” said James Pace, partner and head of Knight Frank’s Chelsea office.

While it is still too early for firm conclusions of future market moves following the EU referendum, the worst of the initial forecasts appear to have been avoided to date, according to Tom Bill, Knight Frank’s head of London residential research.

He commented: “The tentative improvement in some demand indicators provides grounds to believe the prime central London market is set for at least a modest recovery in trading volumes, whether this translates into an uptick in pricing is less clear.”


https://www.propertyinvestortoday.co.uk/breaking-news/2016/9/surge-in-buyer-interest-offers-room-for-cautious-optimism-in-prime-london

Brexit vote creating lethargy in prime central London property market

There are signs of lethargy in the prime property market in central London ahead of the vote on the future of the UK in the European Union, according to a new research report.
But beyond the distraction of the EU referendum there are signs that demand is strengthening, according to the research from international real estate firm Knight Frank.

Overall annual growth in the prime central London property market slowed to 0.1% in May, the lowest since October 2009 and the Brexit effect means demand is subdued even where asking prices have fallen 10% or more.

On top of this the number of active buyers to available properties has halved over the last year and Tom Bill, head of London residential research at Knight Frank, described it as a price sensitive market.

‘Demand remains relatively subdued but in a change from recent months, the primary cause in May was the Brexit vote rather than new rates of stamp duty. Indeed, there are overlapping layers of uncertainty affecting supply and demand that are difficult to differentiate but which produce a cumulative impact,’ Bill explained.

‘There has been a discernible Brexit effect on the UK economy as decisions are delayed and the London property market is no exception. Buyers and sellers are postponing decisions because of the prospect of entering unchartered economic and political territory,’ he said.

‘The market has become price-sensitive due to higher levels of stamp duty, but an indication of the Brexit effect is that demand in May has remained subdued even for properties where asking prices have fallen by 10% or more,’ he pointed out.

He also pointed out that demand was already more restrained as a result of the impact of two stamp duty increases in the space of 18 months and the ratio of active buyers per available property in prime central London has fallen to 4.8 from 10 over the last year.

However, despite the looming referendum, there are signs underlying demand is strengthening, according to Bill as buyers drop asking prices to reflect higher transaction costs.

The number of transactions between January and the middle of May was flat this year compared to 2015. Meanwhile, viewings increased 31% between January and April versus last year, suggesting a degree of pent-up demand.

Overall, prices have grown 2.4% over the last two years and it has been three and a half years since annual growth was last above 10% in October 2012.

A breakdown of the figures show that in the 12 months to May 2016 prices have increased 7.4% in Islington, by 6.3% in the City, by 1.9% in Mayfair, by 1,7% in Kensington, by 1.3% in Tower Bridge and by 0.3% in Riverside.

Prices remained unchanged in St John’s Wood and Marylebone but fell by 7.5% in Knightsbridge, by 4.8% in Hyde Park, by 4.6% in South Kensington, by 3.5% in Chelsea, by 1.7% in Kensington, by 1.5% in Notting Hill, and by 0.2% in Belgravia.

The report also points out that housing was the key political battleground ahead of May’s London Mayoral election, with both candidates pledging to build more homes to address affordability concerns.

Sadiq Khan, the winning candidate, said he wants to double the amount of houses built to 50,000 a year by 2020. He also plans to increase the number of affordable homes and has talked about tighter restrictions on overseas buyers and controlling rents.

Full details have not emerged but the high level of political scrutiny on housing means the new Mayor is likely to adopt an approach that is economically viable for developers in order to ensure his target is met, according to Professor Tony Travers, a local government expert at the London School of Economics.

‘All the evidence so far is that pragmatism is triumphing over ideology. The last thing he will want to do is emit signals that undermine the capacity to deliver at least as many homes as last year. What is essential is that the number of new homes built doesn’t fall,’ he said.

‘What was unusual about the 2016 Mayoral election was that enough numbers were traded by the candidates to create a measurable benchmark, which his opponents in 2020 will point to if he falls short. With that in mind he needs to keep developers broadly onside,’ he added.

He explained that the relatively slow pace of announcements regarding policies and appointments since Khan won the election, was also a sign of a pragmatic approach. ‘If this is an indication of what is to come, the lack of rash promises suggests the cautious approach of a professional politician,’ he said.

However, the backdrop of the EU referendum has dominated Khan’s early days in office. ‘If the UK voted to leave and London voted to stay in, the Mayor would be well within his rights to argue for greater autonomy from the rest of the UK to ensure the city’s economy is protected,’ added Travers.


http://www.propertywire.com/news/europe/central-london-prime-property-2016060211988.html

17 ways to tell you are Obsessed with Property

1. You throw away the news and sports section of the Sunday papers and concentrate on the property section. Armed with a thick red marker pen you outline your best buys.
   
2. Your computer desktop is a picture of Kirstie Allsopp.
   
3. You calculate you spend more time talking to estate agents than talking to your own children.
   
4. You are able to sniff out boxes in a supermarket, you can't see them but you know that perfect box to help you with your move is close by.
   
5. If asked directions you find yourself navigating by estate agents rather than pubs and churches.
   
6. When walking into a friends house for the first time you enquire about the number of bedrooms and if planning permission has been given for an extension, before asking them how they are. You then quiz them about local amenities and possible flooding.
   
7. If you're a bloke, instead of enjoying a copy of the latest lads mag you are more than likely to be reading a stack of property particulars at lunch time, muttering to yourself in the corner about period features. If you're a women, a pile of Heat magazines lie unread in a corner, whilst the local property section is scoured, front to back, as soon as you get your hands on it.
   
8. You are on first name terms with your local estate agents and even some not so local, in fact you are now the godfather to one estate agent's child.
   
9. You know which day the interest rates are announced and can give a reason why the inflation rate has effected the Bank of England's choice to raise or lower rates.
   
10. You own all of Sarah Beeny's property books and have watched every episode of Location Location Location.
    
11. A walk down your local high street takes three times as long as most peoples as you have to stop at every estate agent's window to look for that bargain.
    
12. You can now visualise square footage when listed in property details and know exactly how much you need.
    
13. Your moving day plan is akin to the D-Day landings in complexity, the folder containing the plan is heavy enough to squash a small dog if it were to land on top of one.
    
14. Your Internet bookmarks groan under the weight of property websites and you have become such a frequent visitor to some property websites that they have invited you to be a shareholder.
    
15. When traveling to a new area you find yourself calculating the demographics and statistics, wondering if this could be your dream neighbourhood.
    
16. The bulk of your email inbox is made up of property email alerts as you have set up so many requests with property search websites.
    
17. Your house sale playbook contains more psychological tricks than Derren Brown, going beyond the simple "baked cookie smell", wafting through the house. You hang prints on the walls containing auto suggestions regarding how great the house is.
    
    http://www.mypropertyguide.co.uk/articles/display/10069/17-ways-to-tell-you-are-obsessed-with-property.htm

The Perfect Business Opportunity for the Property Investor

by Sally Lawson | Mar 17, 2016 | Property Investors | 0 comments

If you are a property investor, you are probably experiencing a few things:

• Difficulty finding great property deals that stack up
• Never having enough free cash to buy the deals you want
• A property management headache building with all the properties you have bought that need managing

This is where running a letting agency could solve all of these issues AND be a great asset in its own right (Leverage FREE too) plus it’s a load more tax efficient.

A Letting agency builds healthy continuous on going management monthly income from the property management margins and for an established business in the Midlands this would be around 30k per month, every month (before you open the doors).

This is why letting agencies are reaching the highest levels we have ever seen in the industry at the moment, and why the big boys are buying agencies as fast as they can to build their residual income.

You also get to utilise other people’s time and property to build yourself a valuable asset, the true definition of a business.

We are all aware of the new breed of Gazelle type business that are experiencing never seen before growth right in front of our eyes right NOW, and these are not ASSET based companies, they are “SERVICE based” which means they have no limits, they can service everyone and just keep growing and growing, and they are.

Think of the following examples:

• Alibaba, the largest worldwide warehouse but owns no stock,
• Facebook, the largest content machine that creates no content
• Uber the largest taxi firm that owns no cabs…
• Rightmove owns no estate agency but valued at £95million

Slightly different but along the same lines, it’s like the gold mine rush in California in of 1855, where everyone rushed to pan for gold, because they wanted to make it rich, but quietly behind the scenes, it was the it was the suppliers of the buckets and spades that made all the money.

The problem is that relying on asset building alone as a business model is too restrictive because you either run out of leads of great properties to buy, you get short of cash to secure the ones you want, or in the end give up through lack of motivation.

Monetising other people’s assets

The difference with building a “serviced based” business is that you are monetising other people’s assets, which means there are no restrictions, you can keep growing indefinitely, no barriers, no Mortgage restrictions, the sky is the limit.

It’s no surprise that at the moment well run and systemised letting agencies are achieving 2x turnover when sold, which means if you build your business in 5 years, to a £750k turnover then your business would be worth up to. £1.5million if sold.

The real bonus is that unlike property, it would be cash, free of any debts or leverage in most cases, as well as much more favourable than property is, with entitlement for entrepreneurs relief for taxation purposes too (as opposed to capital gains tax).

Another real bonus for a property investor of running a letting agency is that you will get a never ending source of leads driven into your hands of people wanting to sell their properties, the continuous residual income to fund them and a property letting and management solution right under your nose for everything that you buy too.

The Truth is…

Which is why when I was asked last week on an interview, “What properties are you investing in right now?” and the truth is I’m not.

Now I confess I have been a very active property investor, I was buying 4 per month at one point for clients and myself, and at 27 years old, I owned over 2.7 million pounds worth of property assets and I personally had purchases for rental, refurb, holiday lets and re-sale on the go continuously throughout the 90’s and early 2000’s but not now, it doesn’t stack up for me.

You see I would prefer to buy property agency stock, I can buy 100 properties under management for around £100k and this will generate over 60k income every year, with no additional expenses, because I have the management team in place already… 60% return!

It’s a no brainer, but I accept this is not for everyone, but we handle enquiries regularly from people buying agencies that then need a “system” to put in place to handle them and of course we are happy to help, so it’s definitely catching on.

So to summarise, to build a gazelle type business, utilise other people assets, and other peoples time, which means the sky is the limit, this will release the cash you need and the opportunities to carry on investing in fixed assets with a letting and property management solution built in (if you still wish to invest in property that is)

http://www.propertyagentscircle.co.uk/the-perfect-business-opportunity-for-the-property-investor/