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How Landlords Are Affected By 2015 Pre-Election Budget

How Landlords Are Affected By 2015 Pre-Election Budget

How Landlords Are Affected By 2015 Pre-Election Budget

During the pre-election budget last week, Chancellor of the Exchequer, George Osborne MP announced some significant changes that could have a detrimental impact on landlords the UK’s private rental sector (PRS) and residential property owners.

Below are the highlights of the pre-election budget that are of relevance to landlords and property owners:

  • £13 Billion (GBP) sale announced of the mortgages of UKAR – Northern Rock and Bradford and Bingley (Mortgage Express) to reduce national debt which followed the bailing out of the banks.
  • Introduction of 20 new housing zones.
  • The economy of the North grew faster than the South during 2014.
  • The UK has the highest rate of employment in its history!
    Employment is growing fastest in the North West, Yorkshire having the biggest employment.
  • Living standards are higher in 2015 than 2010.
  • Inflation forecast downgraded to 0.2%.
  • Low interest rates to be “locked in”.
  • Original target of debt reduction set in 2010 budget has been met.
  • 13 years of rising national debt has now been stopped.
  • UK achieved the largest and most sustained debt reduction of any major economy according to the IMF.
  • Government borrowing is falling.
  • The wealthy are making the biggest contributions to reduce debt.
  • End of austerity in 2019.
  • The annual tax return is to be abolished. New digital tax accounts to be created.
  • The personal tax free allowance has been raised to £10,600 (GBP) and will be raised to £11,000 (GBP) in 2017.
  • The higher rate tax threshold will rise to £43,300 (GBP) by 2018.
  • Class 2 national insurance contributions abolished for self-employed.
  • Stronger measures against tax avoidance and tax evasion.
  • Review of avoidance of inheritance tax through deeds of variation.
  • New penalties for tax evasion and those professionals who assist them.
  • Crime down 20%.

There was some good news contained in the 2015 pre-election budget too:

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CML Forecast 16% Mortgage Lending Growth In Next 2 Years

CML Forecast 16% Mortgage Lending Growth In Next 2 Years

Council of Mortgage Lenders Predict Significant
Mortgage Lending Growth

The Council of Mortgage Lenders (CML) have predicted that gross mortgage lending in the UK will increase by 16% over the next two years.

The CML says gross mortgage lending in the UK reached around £207 Billion (GBP) in 2014 and they firmly believe that gross mortgage lending will grow by 7% to £222 Billion (GBP) during 2015.

Following that, the CML also forecast a further 8% increase to £240 Billion (GBP) in 2016, up 16% when compared to gross mortgage lending in 2014.

While the CML are happy to forecast 2 years of mortgage lending growth, it acknowledges that the pace of growth has slowed compared with the 18% recorded from 2013 to 2014, with gross mortgage lending increasing from £176 Billion (GBP) in 2013 to £207 Billion (GBP) in 2014.

In its analysis, the CML said that the stamp duty reforms announced by the Chancellor, George Osborne, in the Autumn budget would help boost overall mortgage lending activity, following the lull encountered in the summer of 2014.

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If You’re Not Achieving Your Business Or Property Investment Dreams, You Need To Speak To Matthew Moody

If You’re Not Achieving Your Business Or Property Investment Dreams, You Need To Speak To Matthew Moody

If You’re Not Achieving Your Property Business Dreams, You Need To Speak To Matthew Moody

If you spend as little as 10 minutes a day, trying to visualise what it is possible to achieve through business, then it’s virtually guaranteed that you’ll want to get out there and actually achieve those things.

  • Think of all the things you wanted to do as a kid?
  • Think of all of the dreams you have right now that you want to achieve?
  • Think of the places you want to travel to that you haven’t been yet?
  • Think of the experiences you want to mark as your own that you haven’t done yet?  

But what’s stopping you?

  • Fear Of Not Having The Time
  • Fear Of Not Having The Money
  • Fear Of What Other People May Think
  • Fear Of What You Have To Give Up

A wise man once said “Fear is just false expectations appearing real

So let me ask you a couple of direct questions; 

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2014 UK Property Prices To Increase Further

2014 UK Property Prices To Increase Further

UK Property Prices Extend Best Run Since 2007

There was some good news for property investors looking for capital appreciation this week as it was reported that UK property prices have continued to rise, increasing for the 14th consecutive month in March 2014, the longest run of price growth for nearly 7 years.

Residential property values across the UK increased by an average of 0.6% in March, with the South West and East Anglia regions recording the largest property price increases of 0.8%, according to data supplied by Hometrack Ltd.

Yorkshire & Humberside and the North West regions registered the smallest gains, with property values increasing by just 0.2% in March 2014.

Even independent surveyors are forecasting property prices to increase by a further 6% this year and are including this information on property condition reports for prospective purchasers.

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Beware Of Serious Maintenance Issues When Purchasing Investment Properties

Beware Of Serious Maintenance Issues When Purchasing Investment Properties

25% of properties for sale in the UK
have serious maintenance issues

New research by Halifax home insurance has revealed that home owners are far from proficient at keeping their property well maintained.

The research found that whilst 28% of home owners claim to be DIY enthusiasts, almost a third of people surveyed said they only had basic skills and knowledge to carry out basic cosmetic improvements, such as painting and decorating, grouting tiles or assembling furniture rather than tackling bigger property maintenance issues such as cleaning gutters and repairing fixtures and fittings or repairing cracks in plaster.

lacking the confidence to undertake even straightforward maintenance which could prevent problems such as damp in the longer term,

The research found that property owners in Aberdeen had the best maintained properties in Scotland, while Peterborough was the top region in England, and Newport came out top in Wales.

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North - South Divide Widens Again

North – South Divide Widens Again

A new study by the Office for National Statistics (ONS) has revealed that 20% of middle aged workers are property millionaires – on paper!

In the South East of England almost 30% of people in their 40s and 50s living in private residential properties can calculate their wealth to seven figures, when including savings, investments, the value of their homes and pension pots.

However, the study also revealed a sharp divide between North and South of England as well as between generations.

It claims that five times more children are growing up in households in the bottom top wealth bracket, North East, South East, wealth category as there are in the top wealth bracket.

While almost 60% of middle aged people in the South East have built up an impressive half a million pounds in savings, pension and property wealth, in the North East, 20% of the same age group have little or no assets that they can rely on.

The ONS study shows how wealth builds up through people’s working lives but begins to fall once they retire and begin using up their accumulated assets, in many cases on elderly care.

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The British Property Federation (BPF) handed a bit of good news to UK landlords who may have been struggling to make ends meet, after it was revealed that the UK coalition government may review imposing powers forcing landlords to share information on changes of tenancy with water companies, as well as making them liable for a defaulting tenant’s debts.

The failure of tenants to pay water bills for the property they are renting costs landlords and other home owning customers around £15 extra per year.

The new Flood and Water Management Act would mean that the government could make landlords and property owners pay water and sewerage bills if specified details of tenant occupiers are not forwarded to the relevant utility company departments.

Ian Fletcher, director of policy at the British Property Federation, explained: “Government policy in other areas is pushing for personal responsibility and the same should apply here that landlords should not be held liable for their tenants’ debts, which is simply unfair. We therefore welcome this review and agree that water companies could do more to limit bad debts. Landlords already provide a lot of information voluntarily, though this could be much easier and transparent with the right systems in place”.

Legal 4 Landlords advise all UK landlords to inform all utility companies (Gas, Electricity and Water) at the start and end of every tenancy as normal practice for all tenancies.

Home insurers and the UK’s coalition Government are still arguing over paying for flood protection, meaning Millions of homeowners and Buy-To-Let Landlords are facing uncertainty over house prices, mortgage availability and the validity of their insurance policies.

Buy-To-Let Property Owners In Flood Risk Areas Fear Worst

UK Landlords With BTL Property In Flood Risk Areas Fear Worst

If the UK Government fails to meet the demands of insurers to reinstate flood protection cuts then insurance cover for millions of homes, including buy to let rental properties, could be withdrawn from June this year.

Although insurers pledged to offer insurance premiums for properties at risk of flooding, it was on the proviso that the UK government would invest money in flood defence protection.

The agreement is set to run out on July 1st 2013, but Millions of pounds have already been cut from flood defence budgets earmarked for improving sea walls and river banks.

Insurance policies starting at the end of June 2012 could be withdrawn for properties in high flood risk areas if an agreement isn’t reached, as the policies would be in force after the date the current agreement ends.

Flood defence protection is a priority for all residents living near to waterways, lakes and rivers, many people in flood-prone areas now have the added worry that their properties may be difficult or even impossible to insure later this year.

Some insurers are already warning that property owners in high flood risk areas, might not be able to renew their cover after the end of June this year, because their new insurance policy will extend beyond the 1st July 2013 agreement cut off date.

Not being able to obtain insurance cover will blight property values in many areas, as mortgage lenders may not offer funding and in many cases the properties will be very difficult to sell on.

Many home owners and buy-to-let landlords could also risk breaching stringent mortgage conditions that require them to have buildings insurance in place for the life of their mortgage loan.

Business Development Director for SearchFlow, Richard Hinton, said “Buyers will be able to obtain flood insurance for the next few months, but the long-term prospects of properties at risk of flooding are potentially bleak. Buyers purchasing in high-risk flood areas face the possibility of very high premiums, significant reductions in value, less access to mortgage finance and even action taken by the mortgage lender due to breach of the mortgage agreements.”

Check if you have a property at risk by going to the Environment Agency flood pages

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