Buy to let news to Friday, April 13th, 2018
- Published: Friday 13 April, 2018
- Category: News update
- By: Andrew Pelis
- Updated: Monday 16 April, 2018
New gas safety rules commence
New gas safety rules came into effect on April 6th, 2018, which will give landlords more flexibility around annual gas safety checks, whilst maintaining existing legal requirements.
The Gas Safety (Installation and Use) (Amendment) Regulations 2018 have now passed into law and introduce an “MOT style” element to gas safety checks.
Whilst landlords will still have to carry out annual gas safety checks by law, under the changes, they will now be able to carry out gas checks during the two months prior to the date they are due, whilst retaining the existing expiry date.
This additional flexibility means that landlords are not forced to wait until the due date to request access to the property, at which point the risk of not being able to gain immediate access may arise.
The legislation is available to read here.
Further information is on hand via The Health & Safety Executive.
HMRC data reflects growing number of landlords
There were a record number of 2.5 million buy to let landlords in the UK in the 2015/16 tax year, HMRC figures have revealed.
The data, provided under a Freedom of Information request to HMRC, by London agent ludlowthompson, the report reflects a 5% increase in landlords from the year before and a 27% rise over a five-year period.
The latest figures indicate that landlords on average, owned 1.8 buy to let properties each, a number which has risen for five consecutive years.
Ludlowthompson said that the data reaffirmed investor faith in residential property, particularly in London, suggesting that its own landlord customer base had seen average annual total returns of 9.9% each year since the start of the Millennium.
Stephen Ludlow, chairman, commented: “Rising numbers of landlords shows the enduring appeal of buy-to-let, particularly in London.
“The long-term picture for the buy-to-let market remains strong.
“Our own figures underline the strength of London’s attraction, with a significant increase in rental applicant numbers since the start of this year.”
Andrew Turner, chief executive at Commercial Trust made the following observations:
“In my view we can take little from this data, simply because it does not reflect where we are at in the current tax climate.
“The buy to let landscape has changed and will continue to do so, up to and beyond the tax year 2020/21, when the final phase of mortgage interest tax relief will be in place.
“I believe there will still be a degree of lag beyond that time, because until that last phase of the tax withdrawal has happened the full financial picture may not be clear for some landlords.
“What I anticipate we will see is a number of landlords operating at a small scale with one or two properties, exiting the market, whilst others with more properties will simply see the changes as the cost of doing business, will adjust their investment strategy accordingly and move forward."
UK rents up 0.9% YoY in March
March 2018 rental figures show a 0.9% year on year increase from March 2017, according to the latest index released by UK tenant referencing and lettings insurance company, Homelet.
The average rent in the UK is now £912. If London is excluded from this figure, the average becomes £759, up by 0.1% from the same month in 2017.
London rents up 1.5%
Looking at London in isolation rents are up 1.5% year on year, currently standing at £1,569, which is better than the UK average.
Highest rents in the capital top-out in Westminster, with a March average of £2,132 followed by Lambeth (£2,122), Camden (£1,938), Chelsea, Fulham, Hammersmith and Kensington (£1,852) and Tower Hamlets (£1,704).
North West and the Midlands
There has been a good deal of media coverage on the rising interest in the North of England for landlords, with Liverpool and Manchester both being commercial hubs and having strong student communities.
Homelet’s figures show favourable annual variance in average rents for these regions compared to the rest of the UK. The North West has experienced year on year growth in average rents of 2.1%. The West Midlands annual variance was 2.4% and the East Midlands 3.3%.
Homelet’s Martin Totty commented on the stability of rents throughout 2017 and into 2018:
“Rental price inflation was much more stable over the whole of 2017 compared to 2016, when rents rose at an annual rate of more than 4% in the first half of the year, before dropping back in the second half. So far, we are seeing this more stable market continue to prevail in 2018.”
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This information should not be interpreted as financial advice. Mortgage and loan rates are subject to change.