The Future of Buy-to-Let
2016 will long be remembered as a year of immense political change, with the election of Mr. Donald J. Trump adding to the latest in a string of unexpected results. Shifts like these are not only confined to the political sphere, but are also visible in the property sector through revisions to the buy-to-let market. This year’s 3pc Stamp Duty tax rise stands out, but the announcement that the Bank of England will be given new powers to curb ‘risky’ buy-to-let lending echoes a very similar theme for the market.
So, is the government initiating mini property-revolution?
The logic behind the move…
The Treasury’s reasons for making these changes are related to the huge risk that the buy-to-let market places on our financial system, which would heighten if interest rates were to rise. If rates go up in the future, this will pose a problem for landlords and their future interest repayments. During Chancellor Phillip Hammond’s statement on the new powers gained by the Bank of England’s Financial Policy Committee (FPC), he focused on ensuring the longevity of the buy-to-let market – a positive signal for any stakeholders. He suggests “expanding the number of tools at the Financial Policy Committee’s disposal will ensure that the buy-to-let sector can continue to make an important contribution to our economy”.
The implications…
From a long-term perspective, the Treasury’s decision has been labelled as an attempt to protect the future of the market. This is necessary considering the important role of the buy-to-let market in balancing and broadening the overall housing market. However, the more immediate impact is arguably more destructive to the sector, not to mention the power being transferred to the FPC. These include:
• The ability to restrict the size of the loan relative to the value of the property
• Limit the size of loans relative to the amount of rent landlords receive to cover interest payments
Should the FPC decide to exercise its powers as suggested above, there are fears it will further dampen the outlook for the buy-to-let market. Coupled with an imminent increase in Stamp Duty, Arthur would recommend keeping as up-to-date as possible with any changes over the coming months. The emerging short-term lets market, dominated by companies like Airbnb, are a welcome breath of fresh air for any property portfolio should one wish to diversify. Nevertheless, the increasingly dynamic nature of the property market means it pays off to be clued up, especially considering the possible implications of the FPC’s new powers.
These changes exemplify why it is essential that your management practices, as a landlord, are as slick and efficient as possible. Whether you decide to continue with your existing buy-to-let investments or decide to diversify your portfolio, Arthur can help! Arthur’s property management software enables you to have complete control over all aspects of your portfolio and it’s accessible from your computer, tablet or mobile phone. Arthur brings your landlords, tenants, contractors, agents and owners all under the same interface, making problem solving a breeze. With our system, you can manage your portfolio from anywhere in the world, which is guaranteed to give you a peace of mind as the buy-to-let market undergoes so many radical changes. Arthur provides you with complete flexibility and is excellent for multi-unit properties (no matter what size) such as: student accommodation, blocks of flats and HMOs.
Come and try our 30-day free trial today!
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How to Protect Your Rental Property
There is a lot to think about when you dip a toe in the buy to let property market. Finding the right property is crucial, so it is sensible to research your market before making an offer on a derelict property with “potential”. After all, if you are hoping to attract students but the nearest […]
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View Full Article: How to Protect Your Rental Property
Black Friday – The best deals for landlords
Black Friday returns to the RLA on the 25th November 2016. Each year our Black Friday deals get bigger and better and we can’t wait to share our membership and training offers with you. This Black Friday landlords will be able to join our association at half price from as little as £39.98 for their first […]
The post Black Friday – The best deals for landlords appeared first on RLA Campaigns and News Centre.
View Full Article: Black Friday – The best deals for landlords
RLA Safety and Energy Survey closing soon!
We have recently launched our quarterly survey into the Safety and Energy issues affecting the private rented sector. We are now urging landlords across the UK to make their voice heard in this comprehensive survey of these issues. We have received fantastic support from landlords already, and the more landlords who complete the survey, the […]
The post RLA Safety and Energy Survey closing soon! appeared first on RLA Campaigns and News Centre.
View Full Article: RLA Safety and Energy Survey closing soon!
Can you not evict if your Liverpool Landlord License has not yet been granted?
I am looking for information regarding a tenant who i may shortly be evicting. I have been informed that issuing a section 21 will be invalid as I still haven’t obtained a license for the property as it is in the Liverpool area. I have registered all my properties with Liverpool City council for a… Read more
The post Can you not evict if your Liverpool Landlord License has not yet been granted? appeared first on Property118.com.
View Full Article: Can you not evict if your Liverpool Landlord License has not yet been granted?
What we want in the Autumn Statement…
A lot’s happening in politics right now; you might say we’re going through the biggest “sea change” for generations, with Brexit, a new radical government in waiting in the US and the prospect of major changes in Europe. Consequently, Theresa May and Philip Hammond have a lot on their plates besides UK property policies. But […]
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View Full Article: What we want in the Autumn Statement…
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