Straight from the desk of one of our directors Rob Brown:
You may be feeling some what battered and bruised as a Landlord in England after the Chancellor seems to have intentions to bash up landlords, and there are a number of sticks that have been deployed to execute this beating;
- Any increased fee to LL will be passsed onto tenant hrough higher rent
- 3% increase in stamp duty on buytolet and second homes
- The phasing out of mortgage interest tax relief
- The disadvantage of a higher capital gains tax rate for residential property than for any other asset class
- In the futue probably more affordability tests for buy to let loans
- In London restricting airbnb lettings to 90 days
- The ban on letting agents charging fees to tenants
Whilst these measures might not be good news for Landlords, they are certainly “crowd pleasers” to the general public and to the millions of private renters.
Letting agents are cast in the role of chief pantomime villain; if only they knew the amount of work involved in the letting and management of a residential property!
However, despite all these negativities investors continue to invest. For where else can one attain the same levels of return in an asset class that can be simply understood.
It was interesting to read recently that residential property has performed far better than any other property-type in terms of appreciation over the last year, according to new data. While all property types – industrial, warehousing, office and retail as well as residential – returned an average of only 3.5 per cent appreciation in 2016, the residential sector in isolation was by far the best performer.
There was 8.3 per cent capital appreciation for residential alone, according to the MSCI/IPD Index, produced by the Investment Property Databank. The index covers 9,000 property investments across the UK with a total value of £150 billion. “The index is intended for large scale institutional investors – pension funds and the like – but the themes emerging from these latest results are interesting for all property investors”.
Sensible investment in residential property will continue. A high rental yield helps minimise the losses, a low absolute prices reduces stamp duty; by clever investing the pain can be minimised. Where can one buy an investment property with a 6% gross rental yield and a property valued at sub £150,000………………..think close by; Kettering, Wellingborough, Peterborough, Northampton.
Do call us to discuss our investment opportunities; we are always on the prowl for the very best investment opportunities for our clients.