ExPat BTL Mortgages for UK Properties

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I would like some advice or guidance on the matter of Expat mortgages. I am a British National and have lived and worked outside of the UK for over 20 years. I already have a small portfolio of 5 x BTL’s in the UK and have had these for approx.

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Onward Report Riddled with Errors says RLA

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Onward Report:

A new think tank is fundamentally wrong in its analysis of private rented housing and the number of buy-to-let mortgages is falling, not rising.

In its first report, focussed on housing, the Conservative supporting Onward, claims that at the end of 2017 buy-to-let lending was above the 2007 peak. In fact new buy-to-let lending for house purchases has fallen from over 183,000 loans in 2007 to just 74,900 in 2017, a fall of nearly 60 per cent, according to figures from UK Finance, formerly the Council of Mortgage Lenders.

The total number of buy-to-let mortgages, including re-mortgages, also fell from 339,000 in 2007 to 227,000 in 2017, a drop of a third.

The private rented sector is actually shrinking with the Government’s own statistics showing that the number of private rented dwellings in England fell by 46,000 in the year to March 2017.

The report argues that landlords are taxed more advantageously than homeowners. This is not the case according to the respected Institute for Fiscal Studies which said following tax rises imposed on the private rented sector in 2015: “The tax system is not, and was not, even before the recent changes, more generous to people buying to let.�

On the back of its false assertion, Onward calls for further tax increases to reduce investment in new homes for private rent.

It argues that if the country had kept the ratio of privately-rented to privately-owned homes the same between 2000 and 2015, it would have ended up with 2.2 million more homes in owner-occupation.  This ignores the question of whether all of these households would have been able to afford a home of their own, especially as house prices rose by 154 per cent over that period.

With another report today saying that it now takes a single, first time buyer an average of ten and half years to save for a 15 per cent deposit for their first home, the RLA argues this is leading to increasing demand on the private rented sector and to take action now that would further reduce supply would just make finding somewhere to live more difficult and more expensive.

David Smith, Policy Director for the Residential Landlords Association, said:

“Today’s report is riddled with errors and fails to address the fundamental point that we need more homes to rent, not less.

“Rather than coming out with ideological assaults on the private rented sector, we need to reform tax so that it encourages the development of new homes to rent and longer tenancies so that the sector can adequately provide the pathway for tenants to go from renting to home ownership.�

• The Residential Landlords Association: The home for landlords
• The RLA represents the interests of landlords in the private rented sector across England and Wales. We are home to over 50,000 landlords nationwide, with a combined portfolio of over a quarter of a million properties. A growing community of landlords trust and rely on us to deliver day-to-day support, expert advice, government campaigning, plus a range of high-quality services relevant to their needs.
• It campaigns to improve the private rented sector for both landlords and tenants, engaging with policymakers at all levels of Government.  Our vision is to make renting better for everyone involved in the private rented sector.
• Paul Johnson, Director of the Institute for Fiscal Studies gave evidence to the House of Lords Economic Affairs Committee on 8th March 2016 as part of its inquiry into the housing market. The transcript can be accessed here

He told the committee:

“If you buy to let, you pay income tax on the return and capital gains on what comes out when you sell it at the end, which is not the case for owner-occupiers. The current system is clearly more tax favourable towards buyers and owner-occupiers than it is towards buy-to-let landlords and renters. The tax system is not, and was not, even before the recent changes, more generous to people buying to let.�

• The Government’s latest Dwelling Stock Estimates for England can be accessed here It notes that between March 2016 and March 2017, the private rented stock decreased by 46,000
• RLA PEARL’s analysis of buy to let mortgage data can be accessed here
• Nationwide publishes its UK House Prices index since 1952 and here

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Onward Report Riddled with Errors says RLA | LandlordZONE.

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New ‘How to Rent’ Guide!

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I’ve done a couple of tenancies today and the ‘How to Rent’ guide this has changed in the last 20 minutes!

I wonder what would happen if I had actually signed both of these tenants up today with one before the change and one after?

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Important: Government “How to Rent� guide updated

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The Government has issued an updated version of its How to Rent guide with landlords reminded they MUST make sure new tenants, or those renewing have the correct version. Landlords entering into tenancies have to give this new version to their tenants as of today, or they are leaving themselves at risk, with Section 21 notices […]

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Forum Spotlight-Providing tenants with fans during heatwave

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This week is set to be a scorcher for the UK, with a heatwave already bringing temperatures of 30 degrees in some parts of London on Monday. This week’s Forum Spotlight is all about keeping tenants cool when the mercury starts to rise. A landlord posted in our Forum a question about providing his tenants […]

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RLA policy director to give evidence to Hackitt enquiry

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RLA policy director David Smith, will be presenting evidence to the MHCLG Committee’s Hackitt enquiry tomorrow. The evidence session is being held by the Ministry of Housing, Communities and Local Government Committee and is the first following the publication of the Independent Review of Building Regulations and Fire Safety, led by Dame Judith Hackitt. In […]

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Small is beautiful – except in the private rented sector?

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Once again we read headlines predicting a grim future for the smaller landlord due to a combination of legislation change and increasing costs. Tory think tank Onward is proposing further tax changes to dampen investment in buy-to-let homes, with finance firms claiming more and more landlords are setting up as limited companies. In an article […]

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Onward’s paper “Green, pleasant and affordable� is incredible, unfortunately

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Onward has published its first policy paper, “Green, pleasant and affordableâ€�..  It was written by Neil O’Brien, who has been an MP since June 2017.  He is a Conservative, believe it or not.

His attack on BTL is only a small part of the paper

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Landlords being advised to keep in mind next EPC deadline

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Energy Efficiency:

Since 1 April 2018 it is an offence to rent out a property on a new tenancy, both residential and commercial properties, which includes a renewal tenancy, without a valid Energy Performance Certificate (EPC), which normally means having a minimum energy performance rating of E.

So far existing tenancies are exempt, but landlords with existing tenancies on properties currently rented out in the private rented sector are being advised to take note of the next deadline that relates to the energy performance of the building.

The next deadline comes on 1 April 2020, which means that then it will be unlawful to be renting any property with an existing tenant unless it has a minimum energy performance rating of E.

This reminder by Clare Gregory from Clarke Willmott LLP in Cardiff, published by businessleader.co.uk, is advising that landlords to start making plans now so that any properties in their portfolios are up to standard by the 2020 deadline. If landlords fail to do so they will be subject to a fine of £4,000, and also they could hit mortgage and re-mortgage problems, even if just one property in their portfolio is below standard.

Clare Gregory has said:

“From a tenant’s perspective, the forthcoming changes mean that they may find that they can potentially drive down their rent or threaten to move on if the required improvements aren’t made.

“The landlord will then be unable to re-let or sell the property without carrying out potentially costly works to improve its energy efficiency rating. If this scenario is repeated across a portfolio of investments, then the risks are easy to see.

“A landlord may find themselves with a portfolio of properties which can’t be let without expensive improvements being carried out, and not even able to cut their losses and sell poorly performing assets which fail the EPC test.

“When looking at their list of legal obligations, landlords might see the introduction of this legislation as another hoop to jump through. However, they have been brought in as a way to improve energy efficiency of homes.

“Thinking they can do little or nothing is therefore not really an option unless owners are happy to risk ending up with a portfolio of void properties on their hands, whereas undertaking a programme of improvements over the next couple of years could help to spread the cost and minimise future risks.

“There is still plenty of time to make sure any properties are up to scratch in terms of energy performance. Conversely, savvy landlords who are already ahead of the game and have better rated properties will be able to attract those wavering about whether to stay put or move on.�

“The obvious thing to do is to undertake any energy efficiency improvements during current void periods or lease breaks. They will more than likely be simple, low-cost measures which can be implemented and will have a significant impact on the energy rating of a building.

“We will be encouraging residential property owners to prepare a programme of capital improvements so that the necessary spend can be spread over the next couple of years rather than left to the last minute.

“By undertaking works and improving the energy rating there is the additional benefits of reduced energy use and operating costs, which may be attractive to potential tenants. Better still, it could also avoid a potential fine that could run into thousands of pounds!�

Changes you can make

These are some priority changes that landlords should consider, quick hits to bring the average rental home up to standard, and in some cases help with funding will be available:

• Put in double glazing – estimated cost: £2-3,000
• Replace an inefficient boiler – estimated cost: £2,000
• Loft and wall insulation – estimated cost: loft £500 and wall £400
• Install new radiator valves – estimated cost: £4-500
• Switch all your light bulbs to LED – estimated cost: £80-100

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Landlords being advised to keep in mind next EPC deadline | LandlordZONE.

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End ‘Tax Breaks’ for landlords says Tory think tank!

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Tory MP Neil O’Brien, former aide to George Osborne and Theresa May at No. 10, has produced the first report for radical new Conservative think tank ‘Onward’ called Green, Pleasant and Affordable. Click here to read the full report.

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