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ARLA calls for more investment in UK buy to let

ARLA Calls For More Investment In UK Buy-To-Let Property Rental Market

The Association of Residential Letting Agents, (ARLA), have urged the Chancellor of the Exchequer, George Osborne, to use the forthcoming Budget to encourage more investment into the UK’s Private Rented Sector, (PRS).

ARLA have called on the UK coalition Government to support the observed growth in the UK Buy-To-Let sector and remove many of the prohibitive barriers to further investment.

ARLA’s Budget submission calls for landlords to be treated as running businesses for Capital Gains Tax purposes, for the introduction of roll-over relief for landlords looking to reinvest, and for UK Stamp Duty to be made fairer.

UK landlords currently have to shop around for a wide range of landlord services in order to help them save money and operate as a business. The emergence of Tenant Referencing and Tenant Eviction services and the development of specialist Landlord Insurance products have ensured that there is still money to be made, by UK landlords, from the UK PRS rental market.

ARLA’s Operations Manager Ian Potter, said: “Buy To Let landlords must be treated as the entrepreneurial businesses they have now become. Supporting growth and encouraging greater investment into the private rented sector will help boost our economy and is an open goal for the Chancellor. Demand for private rented housing continues to grow, with 3.4 Million tenants living in the private rented sector – an increase of over 1 Million tenants since 2005. The tax system can be used by the Government to incentivise investment in housing stock in the PRS, and therefore improve the conditions in which those 3.4 Million tenants live. Some landlords face tax bills of up to 28% when selling a property, preventing them from reinvesting in the market.”

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275,000 new tenants flooded the UK Private Rental Sector in 2011 – a 24% increase on the previous year.

275,000 new tenants flooded the UK Private Rented Sector in 2011

Latest Government Figures Confirm What savvy UK Property Investors & Landlords already knew

Latest Government figures confirm the steady decline of UK Home ownership and the social rented sector, (Council Houses), together with the indisputable rise of the Private Rented Sector (PRS) following the credit crunch.

The figures confirm what property investors who have been expanding their rental property portfolios already know, Buy-To-Let in the UK is BOOMING!

The new 2010-2011 English Housing Survey shows that in that period;

  • 66% of households (14.5 Million) were owner occupiers, down 1% from the previous year, continuing the downward trend observed since 2007.
  • The social rented sector last year accounted for 17.5% (3.8 Million households)
  • The private rented sector accounted for 16.5% (3.6 Million households).
  • Thirty years ago, there were over 3 Million more tenants in the social housing sector than in the private rented sector.

Now the gap is just 200,000.

Last year, a total of 394,000 new households were formed in England

  • 68% were private tenants forming 268,000 of the new households
  • 14% were owner occupiers (55,000 households)
  • 18% were social renters (71,000 households).

One key difference is that couples with no dependent children were the most common type of household in 2010-11 with 35% in the owner occupied and 43% in the private rental sector.

However, the most common type of household in the social rented sector was a single person aged 60 or over (24%).

17% of tenants in the social sector, were lone parents with dependent children, compared to 12% of tenants in the private rented sector with the same status. The figures compared to just 3% of owner occupiers.

In 2011, private sector rent was around twice that of social rents (an average weekly £160 compared to £79).
In the same period, 63% of social renters and 25% or private tenants received Local Housing Allowance (LHA) or Housing Benefit.

Another key difference is in length of tenure: 54% of private tenants had been in their home for under two years, whilst 59% of owner occupiers and 43% of social tenants had been in their home for ten years or longer.

Chief Executive of Countrywide, Grenville Turner, said of the survey: “Successive governments have widely encouraged home ownership but the impact of the recession has led to a structural change in the property market. The impact of this has caused an additional 275,000 new tenants to flood the private rental sector in 2011 – a 24% increase on the previous year. Current demand levels indicate that there will soon be more people in the private rental sector than social housing, which will only add to the already saturated demand and supply imbalance in the market.”

BTL landlords can cash in on the current rental property boom by utilising the wide range of landlord and letting agent services offered by Legal4Landlords.com to ensure thorough tenant vetting and cashflow, including Tenant Referencing, Landlord Insurance, Rent Guarantee Insurance as well as Debt / Rent Recovery and Eviction services.The full report contains information about overcrowding, occupancy patterns, energy use and decent homes and can be found at the link below.

http://www.communities.gov.uk/publications/corporate/statistics/ehs201011headlinereport

UK property repossessions increase

UK Property Repossessions are forecast to increase 22% in 2012

UK Property Repossessions are forecast to increase 22% in 2012

Economists expect the recession and rising unemployment to squeeze the already stretched household finances of thousands of struggling families this year and are warning UK homeowners and landlords of a sharp rise in residential property repossessions.

Record low Bank of England (BoE) interest rates and lower than expected unemployment figures kept property repossessions to relatively small numbers through the worst days of the first half of the recession and they eased again as the country struggled into a tepid recovery.

However, with a double dip recession inevitably looming, workers incomes failing to cover spiralling household costs, the Government’s economic cutbacks and welfare reforms starting to bite whilst the beleaguered private sector fails to replace jobs lost in the public sector, economists are fearing the worst.

The Council of Mortgage Lenders (CML) had already forecast a 22% rise in UK property repossessions for 2012 increasing the annual property repossession figures to around 45,000.

The property repossession figures include private residential properties where mortgage payments have lapsed and Buy-To-Let properties where landlords did not have <a title=”Landlord Insurance” href=”http://www.legal4landlords.com/rent-guarantee/” target=”_blank”>Rent Guarantee Insurance</a> and have been unable to keep up with their buy-to-let mortgage repayments due to their tenants not paying the rent.

Read the full article here

Time for the tenant to leave

Parts of UK are Eviction Hot Spots

New research from Shelter highlights the areas of England where people are most at risk of losing their homes.

The charity claims that one in every 111 households is at risk of eviction by either a landlord or mortgage lender, with those living in London most at risk, followed by the residents of Manchester, Slough and Peterborough.

Shelter’s study also reveals clusters of high risk in the North West and the Midlands: Nottingham, Newcastle and Knowsley all have eviction risk rates more than one and a half times the national average.

While urban areas are more likely to have higher rates of eviction risk, rural areas such as West Lancashire and Bedford are also affected, with levels higher than the national average.

Shelter’s chief executive, Campbell Robb, comments: “Shelter research shows that a third of people are already struggling with their housing costs or falling behind on payments. In these unforgiving conditions, it only takes one thing – illness, job loss or relationship breakdown – to lead to things spiralling out of control and into homelessness.”

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The clock is ticking

Time is Running Out For LHA Landlords

1st January 2012 will see further changes to Local Housing Allowance (LHA) under the Government’s welfare reform.

 The age limit for shared accommodation room rate is set to rise from 25 to 35.

 This means that anyone under 35 and living by themselves or renting a room will be restricted to the shared room accommodation rate.

 This new figure is obviously well below the current market rent for 1 bedroom properties in most areas, as this will now be calculated on the 30th percentile of the rental cost for 1 bedroom properties in each area.

 This could mean disaster for landlords in the Private Rented Sector (PRS) as tenants in receipt of benefits will soon fall into arrears as their housing portion of their benefit payments (Universal Credit) are reduced by the Government.

 With increasing unemployment due to the state of the UK & World economies, more and more people are finding themselves having to make a claim for state benefits including LHA.

 2012 may well see an increase in evictions, homelessness and maybe even a drop in the average property rental price, as landlords could be forced to lower their rents to accommodate tenants who are only entitled to the lower threshold of housing allowance.

 This scenario has been cited by landlords who keen to avoid benefit tenants and now are only seeking tenants in employment. The private rented sector could end up the exclusive territory of the employed in a few years time and landlords are urged to make thorough reference checks when accepting new tenants.

Landlords who wish to learn more about successful LHA renting and how to deal with local authorities to ensure direct payment, should consider buying “The Essential LHA Manual For Landlords” by The LHA Expert – John Paul.

The ebook costs £47 and is packed full of the exact processes and systems The LHA Expert uses to get paid directly by Local Authorities on 97.9% of the 500+ properties he has let out to LHA Tenants, the contents include:

  • Why you should bother with LHA, and how embracing the opportunity can take you from “Arrears Hell to Cash-flow Heaven”
  • Which properties to target for maximum profit
  • How to make sure you get the full amount of rent available
  • Who to steer clear of to avoid problems
  • Some little known “secrets” to using the LHA rules to your advantage
  • How to switch Tenants on the old system onto LHA to increase your income
  • Exactly how to make a claim – so that you actually get paid!
  • How to virtually GUARANTEE you get paid directly by the Local Authority –(this one alone is worth buying the book for!!!)
  • How you can get paid direct after 4 weeks NOT 8 weeks
  • The latest on Overpayments, and how you can make sure they are taken from the Tenant and NOT you

There Will Never Be A Better Time To Invest In Property

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