Monthly Archives: April 2017

RICS Economic & Residential Property Outlook (End of April 2017)

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Below is a summary of a spring 2017 talk given by Simon Rubinsohn, chief economist at the Royal Institute of Chartered Surveyors (RICS) – largely based on his insights using the high profile market surveys regularly conducted by the organisation as well as other reputable data sources. Rubinsohn is closely involved with policy development and regularly works with the Bank of England, International Monetary Fund (IMF) and the World Economic Forum on issues related to property sector as well as being on the board of housing provider L&Q. Simon split his talk into two parts: the macro-economic picture and a more specific exploration of the housing sector. The Macro-Economic Picture Commenting that many economists have had to admit a gross overestimation of the impact of Brexit, Rubinsohn started by referring to the Citi UK Economic Surprise Index demonstrating that the preponderance of data flow has shown that the economy... [Read More]

Purplebricks on Expanding into the Lettings Sector

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The online estate agency´s role in how homes are bought and sold looks set shape the evolution of the property industry in the coming years.  Established in 2014, Purplebricks was the first to adopt the “hybrid” model, bridging the gap between using the experienced local knowledge of traditional agents with the convenience of online and mobile access.  As a result, with a current market cap £746.63 million, the company has been able to position itself solidly in what is a massively competitive sector and remove itself from some of the negative murmurings regarding this non-traditional sales route. Comparative research by Which?, for example, demonstrated that vendors using Purplebricks had to reduce their asking prices the least compared to other online estate agencies and, interestingly, online/hybrid agents sell on average 38 days faster than traditional agents. With the company now bringing its expertise into the rental sector,... [Read More]

How Landlords Can Be More Tax Efficient Post Section 24 (Part 1)

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Although there is arguably a broader awareness of the tapered erosion of mortgage interest relief resulting from Section 24 of the Finance Act 2015, many landlords have decided to adopt a “wait and see” approach with regards to their future liabilities.  Indeed, for basic rate taxpayers there may not be too much cause for concern – even after the full implementation of the legislation in 2020.  For everyone else however, early preparation for what will be a notable hike in tax liabilities is strongly advisable. With a thwarted Judicial Review attempt and a Chancellor seemingly paying little attention to the issue, hedging on some form of policy reversal or retrospective allowance is risky and could create insurmountable challenges down the line. We explored the issue with Simon Misiewicz of Optimise – a Nottingham-based accountancy practice that works predominantly with property investors and traders.... [Read More]

How Landlords Can Be More Tax Efficient Post Section 24 (Part 2)

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Following on from part 1 of the Property Investor Blog´s extended interview with Simon Misiewicz of Optimise Accountants, in this post we explore the pros and cons of some of the prominent strategies touted as a means of reducing Capital Gains Tax (CGT) and Stamp Duty (SDLT) when transferring properties into a Limited Company.  Simon also discusses how investor landlords can engage in a cost-benefit analysis to examine if incorporation is genuinely worthwhile, seek approval from the HMRC and ensure that any future Limited company buy to let purchases are undertaken in an efficient manner. (5) What are Optimise advising clients who are considering transferring personally owned properties into a Limited Company, particularly with regards to ensuring that General Anti-Abuse Rule (GAAR) are observed?  For example, there is a lot of talk of transferring properties into a Limited company and it would be great to hear... [Read More]

Can Landlords Help Alleviate Homelessness? (Part 1)

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Accurately tracking the how many people are homeless and rough sleeping has become practically impossible given that an increasingly large number of people are falling in and out of fixed accommodation.  However, there is little doubt that the problem is getting worse, particularly when observing the “hidden homeless” phenomenon – i.e. those in gainful employment that are still struggling to find a decent and affordable place to live. Exclusively blaming the speculative nature of larger property markets such as London would be unfair – but, objectively speaking, market rents that are increasingly out of sync with incomes and other negative influences such as Local Housing Allowance caps are undoubtedly having a contributory effect. Many readers would already aware of the charity Crisis´ work both in service centre provision across the UK and as a central government lobbyist.  What may not be known is that the organisation is also actively looking to build synergies with the private... [Read More]

Can Landlords Help Alleviate Homelessness? (Part 2)

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In the second part of the interview with Chris Hancock, Head of Housing at Crisis (see part 1 here), we continue to explore tenancy lengths, ensuring that management and solid lines of communication are in place, mortgage borrowing on properties specifically let to LHA tenants / ex-homeless, the noteworthy political will to eradicate rough sleeping (particularly in London), what the UK can learn from other global models and initiatives. Scroll down to the bottom of this post, for information about up and coming events in London, Scotland and Wales which will certainly be of interest to landlords interested in this area. PIB: This may be a difficult question to answer – as you may find that there´s a trade-off between longer, secure tenancies with landlords perhaps being wary about extended commitments and other unknowns – but what kind of tenancy lengths are... [Read More]