Category Archives: Property Investor Economics

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]

Commentary on March / April Property Investor´s Factfile

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March / April 2017 Property Investor´s Factfile The Property Investor Blog´s monthly factfile aims to present relevant data including national / London house prices, the latest buy to let Limited Company (SPV) loan rates, LIBOR / SWAP rates, rental data, mortgage debt figures and information on the first-time buyer sector.  Some noteworthy observations from the last month are outlined below: The Nationwide house price index reported a drop of 0.3% between February and March 2017, annual growth softening to 3.5% as well as “some convergence in regional price growth, with the gap between weakest and strongest performing regions narrowest since 1978.” Rightmove´s most recent national asking price index indicated a 1.27% rise in prices between February and March and (arguably more reliable) data from the Land Registry reported a 0.59% drop between December and January[1]; In Greater London, Westminster´s noteworthy property price growth of 2.52%[2] between November and December 2016... [Read More]

Bisnow´s Financial Market and Real Estate Investment Event

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Below is a summary of an event run by Bisnow (London) in late February that grouped a number of property industry figures to discuss current trends in strategic funding and other related topics.  Although relatively London-centric in terms of content, the discussions also touched on the broader market´s reaction to the referendum result, the long term effects of a seemingly entrenched low interest rate environment, foreign investor´s appetite to fund deals post-Brexit, ongoing risks and the emergence of the build to rent sector: Paul Clark, Chief Investment Officer at The Crown Estate started the morning´s discussion elaborating on the business´s 3% return in 2016 as a reflection of post-referendum mild volatility. As the UK´s largest property manager with urban stock-holdings valued at £1 billion (and an interesting barometer of market performance as a whole), Clark reported that the slowdown was not as acute as... [Read More]

Commentary on February / March Property Investor´s Factfile

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February / March 2017 Property Investor´s Factfile The Property Investor Blog´s monthly factfile presents broad range of data including national / London house prices, the latest buy to let Limited Company (SPV) loan rates, LIBOR / SWAP rates, rental data, mortgage debt figures and information on the first-time buyer sector.  Using data from a range of sources (referenced on the last page of the factfile), we have outlined some relevant observations below: Between December and January, Halifax and Nationwide reported dips in estimated national house prices at 1.0% and 0.32% respectively. However, during the same period, LSL / Acadata stated an average price increase of 0.84%.  Land Registry data indicated that between November and December 2016*, prices rose by 0.74%. Rightmove asking price index pointed to a 1.99% increase between January and February 2017 (although investors should be aware of the often noticeable differences between marketed and actual sold prices);... [Read More]

The Future of Build to Rent (Post Housing White Paper)

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Despite the mixed feedback from early-February´s 2017 Housing White Paper, build to rent (BTR) developers were relatively jubilant on the back of government proposals to consult on the measures aimed at bolstering the sector, namely: Changing the National Planning Policy Framework (NPPF) so, where there is a need, local authorities know they should plan proactively for Build to Rent (BTR); Making it easier for Build to Rent developers to offer Discounted Market Rent (DMR) homes instead of other types of affordable housing; and Ensuring that longer, family-friendly tenancies of 3+ years are available for those tenants that want them.   The Property Investor´s Blog had the opportunity to speak with Ian Fletcher, policy director and lobbyist at the British Property Federation (BPF) at this year´s residential conference on the release date of the report entitled “Build to Rent – Unlocking the Potential of an Emerging Property Sector” (see parts 1, 2... [Read More]

Key Planning Issues + The Question of “When (London) Brownfield Isn´t Enough”

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Coinciding with the release of the delayed “broken market” White Paper, the annual British Property Federation (BPF) Residential Conference sought to address a number of pertinent housing-related topics of the day. Principally chaired by Bill Hughes, Head of Real Assets at Legal & General Investment Management, the various presentations and panel discussions delved into a number of key issues ranging from planning to London´s affordable housing crisis and the supporting role of government at local and national levels. The latter part of the day focused heavily on build to rent (outlined in a separate blog post), a tenure that benefitted from further traction by means of consultation on changing the National Planning Policy Framework (NPPF) (recommending that local authorities plan proactively for these schemes and allow discounted market rent to complement other forms of affordable housing provision). On this latter subject, readers... [Read More]

Allsop on What to Expect from the 2017 Property Auction Season

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Prior to their next auction on 16th February, we asked Gary Murphy – partner at Allsop and vice chair of the RICS Auctioneering Group – for some of his reflections on last year´s auction market, current residential yield trends, some broad expectations for 2017, the growth of mixed-use opportunities as well as his thoughts on foreign investor appetite. (1) Despite many predicting to the contrary, it would appear that Brexit had a relatively negligible impact on house prices thus far – how would you best describe overall activity in the auction room during the course of 2016? Examining 2016 as a whole, the proportion of purely residential property coming on to the market remained similar to 2015 (83%).  Allsop sold £432 million of residential stock in 2016, down by 2% year on year with a sales success rate of 78%.  In our last auction... [Read More]

Commentary on the January / February Property Investor´s Factfile

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The Property Investor Blog´s monthly factfile is principally aimed at UK property investors and traders and includes broad data on national / London house prices, the latest Limited Company (SPV) loan rates, LIBOR / SWAP rates, rental data, mortgage debt figures and information on the first time buyer sector.  This month´s issue (accessible here) presented a range of noteworthy market observations, using data from latter part of 2016*: Rightmove data pointed to an overall 1.1% asking price drop for English and Welsh properties coming on to the market in November and, in the same month, only 14% of RICS surveyors expected prices to increase over the subsequent 3 months (compared to 18% in October 2016); After 4 consecutive month-on-month post-Brexit drops, as at November 2016, Land Registry sold prices in the City of Westminster had broadly recovered to May 2016 levels. However, prices in the City of London fell by... [Read More]

Rightmove´s Sam Mitchell on the 2017 Lettings Market

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On the back of the most recent Rental Price Tracker (Q4 2016), the following summary is based on a short conversation with Sam Mitchell, Head of Lettings at Rightmove during the second week of January 2017.  We explored the validity of the portal´s data sources as a means of assessing local market dynamics; the reasoning behind the reported drop in London´s overall rental figures; the future impact of Section 24 (of the Finance Act 2015) and other top-down policy changes as well as some useful tips on achieving healthy yields moving forward. Rightmove base their yield calculation using rental and sales asking prices. With no equivalent of the Land Registry for the rental market, it can be difficult to establish real prices (i.e. what properties have actually been let for). However, the portal typically has around 300,000 rental properties on the site at any... [Read More]

Shawbrook Bank on the new Prudential Regulation Authority (PRA) Criteria

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One of the strongest challenger banks in the marketplace, Shawbrook´s most recent financial data reported £1.5 billion of gross origination levels for the nine months to the end of September, an increase of 23% compared with the same period in 2015.  Brexit-related uncertainties in the economy have seemingly had a minimal impact on overall business to date and the lender has firm intentions to continue expansion in the buy to let space. We asked Stephen Johnson, Deputy CEO and Managing Director of the Property Division some questions regarding the impact of the Prudential Regulation Authority (PRA) framework alongside some suggestions as to how buy to let investors can best prepare themselves in the new borrowing landscape. (1) Would you be able to provide readers with a broad overview of what the new Prudential Regulation Authority (PRA) criteria essentially means for buy to let investors? The new PRA guidelines, effective 1st January... [Read More]