There has been a collective sigh of relief from Landlords around the country as the threat of 3 year tenancy agreements, “rent controls” and the additional burden of red tape has been lifted, following the Conservative victory in the General Election.
Vitality quickly returned to the London property market, now that the spectre of “mansion tax” has been banished, with agents reporting that enquiries and offers started flooding in shortly after the Exit Poll news was revealed The Royal Chartered Institute of surveyors have reported today that they expect London house prices to rise by a further 30% in the next five years. One agent reported a 34% increase in listings of properties for sale in the weekend post the election result.
Confidence is also high in the South East, where high tenant demand coupled with low supply is pushing up rental yields.
The Conservative manifesto, unlike most other parties, did not meddle with the private rented sector, but focussed more on helping first time buyers.
They are supporting all house-building including social, owner occupation and private renting.
Post-election the Conservatives intend to:
- Build 100,000 new homes per annum
- A 20% discount for first time buyers under 40, which must be repaid if the home is sold within five years.
- Extend the equity loan part of Help to Buy until 2020 in relation to new-build homes
- A new Help to Buy ISA to help first-time buyers build their deposit by 25% up to a maximum Government contribution of £3,000
- Benefit cap to be cut to £23,000
- No housing benefit for 18 to 21 year olds
- Right to Rent immigration checks rolled out nationally
- Universal Credit rolled out nationally, combining 6 benefits into one monthly payment direct to tenants.
It has also been confirmed today that Brandon Lewis will remain as Housing Minister, a post he took up in July 2014. Surprisingly, it has not been given a Cabinet position though.
According to The Guardian newspaper 153 MPs declared an income from renting out at least one property in 2015. This is up from 117 in 2010.
Many senior Tories were amongst the second property owners including Prime Minister David Cameron, Chancellor George Osborne and Housing Minister Brandon Lewis, but the list also included prominent Labour figures as well. So this suggests that there is at least some level of understanding and support for landlords in Parliament!
With competitive mortgage products now combined with political certainty, many landlords who have been “taking a breather” or even considering exiting, will no doubt come back into the market and look to expand their portfolios.
Here at Northwood, we expect to see a continued interest in Buy to Let from those approaching retirement, who can now access their pension funds following the recent reforms that came into effect in April. Our Guaranteed Rent service is particularly appropriate in this scenario as it provides the reassurance of a fixed rental income each and every month whilst also removing the stresses of managing the property.
Our M.D. Eric Walker commented:
“With the Election result delivered, landlords will get back down to business! Politicians come and go, but whoever is resident in No. 10 should fully appreciate the service that landlords offer in housing the nation. It is small private landlords who have taken up the baton and delivered housing solutions that successive Governments have failed to provide.
As there is still no clear housing policy to create the number of new homes we need, and a decrease in social house building, the future continues to look bright for landlords. With the changes to pension rules, it is imperative that the over 55’s are attracted to invest in the private rented sector. Labour’s policies would have been a barrier. These new investors can provide much needed housing stock and there is little doubt that landlords of this type look after their investments and their tenants.
Our Guaranteed Rent service reduces the risk to landlords and provides a regular income and guaranteed return”
As ever, doing intense research and understanding your local market is key to any successful investment and our 80 plus offices around the U.K. are more than happy to help in this regard”.
Northwood provides a full range of lettings and sales services and is a leading supplier of Guaranteed Rent across the UK, giving landlords complete peace of mind that their rent will be paid each and every month.
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