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Mark Burns, managing director of property investment firm Hopwood House, spoke to Property Investor Today and said Manchester was the one to watch for investors.

He identified the city as “on the up”, and bucked the trend for investors normally focusing on London.

Manchester consistently appears in top ten places for rental growth in the UK, and Mark revealed rental yields in the are have reached “almost nine per cent year-on-year”.

Focusing in on the different areas in Manchester, Mark explained where he thought investors should be looking.

He said: “If it is high rental yields you are looking for, it seems areas such as Pendleton, Claremont, Langworthy and Salford top the charts at 8.84 per cent.

“Their typical monthly rents come in at £1,034 thanks to their proximity to the centre of Manchester and the University of Salford.”

He also highlighted eight per cent yields in Moss Side, Rusholme and Followfield.

Discussing why Manchester has enjoyed such a boom, Mark said: “A major regeneration of Manchester has played a significant part in turning it into an investment hotspot.

“With affordability and rental yields both doing better than those in the capital, many investors are now setting their sights in a northerly direction, particularly thanks to the number of students and young professionals moving to Manchester.”

He continued: “Property investment has often been fuelled by many factors, but it seems to currently be driven by retirement needs, a desire for a second income, the need to start a property portfolio or inheritance purposes.

“City centres will always attract a high number of people, and a shortage of property keeps rental demand high, giving great scope for capital growth.

“A growing population and the construction of nearly 20,000 new homes around the city means the potential for investment will continue to grow for some time to come.”

The Express

UK rents to rocket 20% in the next five years... !---->

UK rents to rocket 20% in the next five years... !---->

 

Rents are forecast to rise by more than 20% over the next five years as the falling number of new landlord instructions persists, according to the Royal Institution of Chartered Surveyors (RICS).

The surveyors’ latest monthly residential property market survey found that the number of landlord instructions dropped by 10%, the weakest reading in over two years.

RICS estimate that this trend will continue for the foreseeable future as changes to mortgage interest tax relief from next month have an adverse impact on investment levels in the buy-to-let sector.

But while new housing supply in the private rented sector falls, demand for rental accommodation looks set to increase further and it is this widening supply-demand imbalance that is likely to place upward pressure on rental values.

Rental prices look set to increase faster than house prices over the next five years, RICS said.

When it comes to home prices, chartered surveyors said that they anticipate an increase of about 18% over the next five years.

Reflecting on RICS’ survey, Stephen Wasserman, managing director of West One Loans, said: “The persistent supply versus demand challenge plagues the property market, with landlords looking to capitalise on strong demand having to overcome sustained supply-side issues.

“The changes to buy-to-let taxation are likely encouraging some to put the brakes on their investments but, with many hungry renters, landlords shouldn’t walk away completely.”

Perseverance in the buy-to-let market is likely to “deliver results” for landlords, according to Wasserman, who reports that a growing number of professional landlords are switching to buying through limited companies and other methods to mitigate the tax changes.

“The government and private sector are working to rectify the supply issue, but this will take time and there are opportunities for investors in the interim too,” he added.

Landlordtoday.co.uk

 

 

Many landlords are failing to protect tenancy deposit... !---->

Landlords Failing To Protect Tenancy Deposits

A number of landlords putting their property investments - probably their biggest assets - at risk by failing to comply with basic legislation, such as placing their tenants’ deposits in a government-backed tenancy deposit scheme.

When renting out a property, most landlords choose to take a deposit from the tenant prior to the tenancy starting. The deposit gives a level of protection to landlords and means that should the tenant breach the terms of the tenancy agreement, such as causing damage or not paying rent, the landlord can then make appropriate deductions from the deposit.

Deposits taken on assured shorthold tenancies in England and Wales by landlords or letting agents must be protected within 30 days in any one of three government-backed insurance based or custodial deposit protection schemes operated by MyDeposits, Deposit Protection Service (DPS) and the Tenancy Deposit Scheme (TDS). 

Insured scheme 

The insurance product enables landlords or agents to retain the deposit during the tenancy but in return pay a protection fee to the scheme. 

Custodial scheme

The custodial scheme allows landlords or agents to hand over the deposit for protection during the tenancy, with no fees attached. The scheme is funded entirely from the interest earned from the deposit pool. 

There are separate tenancy deposit protection schemes in Scotland and Northern Ireland.

The three appointed scheme administrators in Scotland are Letting Protection Service Scotland, Safedeposits Scotland and MyDeposits Scotland. 

In Northern Ireland, the schemes are Deposit Scheme Northern Ireland, MyDeposits Northern Ireland and Letting Protection Service NI. 

But although it has been mandatory to hold a tenancy deposit in a tenancy deposit scheme since 2007, many landlords are running the risk of a heavy fine for not placing money into a government authorised scheme, according to Danielle Cullen, managing director at StudentTenant.com who stated,

"A small proportion of landlords did not put student deposits into government protected schemes, some landlords were holding tenants deposits in private bank accounts; breaking a law introduced in April 2007" .

 

Many landlords are failing to protect tenancy deposit... !---->

A report by the Centre of Economics Business Research last year found that a total of £514m worth of deposits was believed not to have been placed in one of the three schemes in England and Wales. 

It comes despite the risk of a penalty for the landlord, potentially running into thousands of pounds for not doing so. 

“While deposit protection schemes protect tenants, there is little or no policing to ensure landlords and agents are compliant,” said Jane Morris, managing director of online letting agents PropertyLetByUs.com. 

Be warned: Tenants can apply to a local county court if they think their landlord has not used a deposit protection scheme when they should have, and if found guilty, the court can order the landlord to pay up to three times the deposit within 14 days of making the order. 

Landlords could also face penalties if their agent failed to comply with the tenancy deposit regulation. 

 

www.landlordtoday.co.uk

 

The government is ‘wiping out the buy-to-let econom... !---->

The government is ‘wiping out the buy-to-let econom... !---->

 

Philip Hammond’s failure to reverse the previous chancellor George Osborne’s deeply unpopular tax reforms will have far-reaching implications for the buy-to-let industry, it has been predicted.

Government plans to strip buy-to-let landlords of mortgage interest tax relief will have a “detrimental impact” on households up and down and the country, according to David Hannah, principal consultant, Cornerstone Tax.

From next month, landlords will start to lose the right to tax deduct their mortgage interest costs at the rate they pay income tax - currently up to 45%. Instead, they will see this fall over the next three years and replaced with a 20% tax credit.

Hannah has criticised the move, claiming it will result in rent increases for tenants across the UK.

Responding to yesterday’s spring statement, the tax expert said: “With real estate representing 21% of the UK economy, it is a mystery as to why the government persists in hindering a crucial sector, by creating an unnecessary burden on tenants, landlords and homeowners.”

He insisted that the “double blow effect wiping out the buy-to-let economy”, namely the restricted mortgage interest relief for landlords from April 2017 to the basic rate of income tax, and the 3% stamp duty surcharge on additional properties, “doesn’t chime with the current socio-economic needs of the UK”.

The principal consultant continued: “The demand for rental accommodation is set to rise by one million households in the next five years - a combination of restricted access to mortgage finance, unaffordability created through eyewatering SDLT rates, and a shift in labour market trends towards a more mobile workforce.

“Yet the government continues to breakdown the very sector that has absorbed change and provided homes for those who simply either cannot afford or do not wish to commit to homeownership.

“With the sector currently in its fourth consecutive quarter of decline, paired with a fall in homeownership rates, we are fast approaching a new type of housing crisis."

Hannah is urging the government to stop “their obsession with homeownership” and “think carefully” about what our country really needs – “an accessible, flexible and affordable housing supply”. 

“The private rental sector, where buy-to-let landlords are a major contributor, provides just that,” he added.

As for future challenges, the growing popularity of zero hour contracts where it is near impossible to obtain a mortgage, will impose further pressure on the rental market, according to Hannah.

He continued: “Interestingly as the UK government is the widest user of these contracts, it remains to be seen where they anticipate our public-sector workers will be able to live.”

Landlordtoday.

 


House Shortage Set To Drive Up Rents

 

Rental prices look set to increase in the coming months on the back of a growing supply-demand imbalance, the latest Private Rented Sector (PRS) report from the Association of Residential Letting Agents (ARLA) Propertymark suggests.

Fresh figures show that demand for rental accommodation rose by 31% between December and January 2017, while the number of available homes in the PRS increased by just 3%.

Letting agents report that a ‘seasonal lull’ was to blame for the shortage of rental accommodation available between December and January, although the report added that both demand and supply had increased sharply over the previous 12 months.

On an annual basis, the prospective number of tenants rose by 10% in January, with an average of 34 prospective renters registered at each ARLA approved letting agent, up from 31 in the same month last year.

Meanwhile, the volume of homes available on the market increased by 12% over the corresponding period, with an average of 193 per branch in January 2017, up from 173 a year earlier.

David Cox, chief executive at ARLA Propertymark, said: “As expected, the New Year brought with it a flurry of activity in the rental market. While supply of rental stock rose slightly, the number of prospective tenants increased by a much bigger margin.

“When supply and demand are out of kilter, as they have been for so long now, the market isn’t balanced and fair for tenants, and rent prices will just continue to rise.”

Almost a quarter - 23% - of agents surveyed witnessed rent hikes in January, but this was down from 30% in January 2016.

Cox warned that the government’s plans to implement an out-right ban on letting agent fees will make the situation worse for tenants.

He added: “The costs of the vital services letting agent fees cover will need to be recouped, and this will get passed on to renters in inflated rental prices.

“This, combined with new landlords’ tax, particularly the upcoming changes to mortgage interest release, means the rental market is far from reaching equilibrium.”

 

Property Portals