Hammond’s Autumn Statement Increases Pressure on Landlords

Hammond’s Autumn Statement Increases Pressure on Landlords

To state that Buy-to-let landlords are feeling underwhelmed after the Chancellor’s Autumn Statement last week is a massive understatement.

Property owners were hoping beforehand that Philip Hammond would abolish or reduce the Stamp Duty increase and forthcoming changes to mortgage interest relief which had been introduced by his predecessor.

The fact that neither happened will pile on the financial and psychological pressure felt by many landlords, who see their business plans coming under a fierce and sustained fiscal attack.

There is no question that normally, when a business faces increased costs it eventually must pass these on to their customers in order to survive. In this case the customers are the tenants.

However, recent research has shown that the vast majority of those renting in the private sector are already struggling to keep up with the cost of living. Even a modest rent increase, forced onto the landlord by Government policies, could tip them over the financial precipice into debt and arrears.

Consequently, many landlords are already in two minds about the long-term viability of their industry and their continued involvement within it.

If this resembles your current thought processes, then R&T Property Solutions can help.

We are based in Glasgow but are interested in buying property all over Scotland.

We take a long-term view of our investments and are not swayed by Government policy. Quite simply, we believe there is a fair price available for every property and we are happy to pay it.

This is true if your assets add up to a single one-bedroom flat or a respectable portfolio.

We’re also unconcerned about location and would be interested in hearing from you whether you are thinking of disposing of property in Glasgow, Edinburgh, Aberdeen, Dundee, Inverness, Dumfries or the Scottish Borders.

And it doesn’t matter to us if there is a tenant in the property. We are happy to take it on and respect the tenant’s rights. This means minimal disruption before during and after the transaction.

This is perhaps the best time to realise your investment.

Stamp duty reforms introduced by George Osborne have slowed the housing market, with fewer investors preparing to add to their property portfolios.

Figures from the Council of Mortgage Lenders show that the amount buy-to-let landlords borrowed fell on an annual basis, dropping 22% year-on-year to £2.8bn in September.

The number of loans fell 6% from August to 18,200, which represents a huge 26% drop compared to September 2015.

There are other contributing factors to this lack of long-term confidence in the market.

The shortage of detail surrounding the Westminster Government’s Brexit plans, coupled with continued statements from the SNP that if the UK leaves the European Union then they will call for another Scottish independence referendum, are adding to the confusion and uncertainty.

In addition to all that, analysts predict that nationally some 440,000 basic-rate tax payers will be forced into a higher tax bracket from April 2017 once planned changes to landlord taxation comes in to force.

The existing rules that permit landlords to offset all of their mortgage interest against tax will, from April 2017, be phased out, restricting the amount of mortgage interest landlords can offset against tax on their property investments.

By April 2020, once they have been withdrawn altogether, it is likely that higher-rate tax payers will only receive 50% of the relief that they currently get.

There are dire warnings from experts who are predicting that landlords will be forced to pass these higher costs on to tenants, or sell their properties when they discover the tenants can’t afford the increased rents.

This is why we think now would be a good time to sell.

If you wait until next year you could find yourself stuck in a buyer’s market because so many of your fellow landlords will be flooding the market with their portfolios.

There could be a selling stampede which can only force prices lower.

Rental income can also become a victim of economic factors in some parts of the country.

In Aberdeen rents have come down by over 13 per cent, while in nearby Aberdeenshire the drop is 9 per cent. Both have been affected by the serious drop in oil prices in the past two years.

Rents have also fallen in Inverclyde by just over 2 per cent and Dundee by slightly less than 1 per cent.

R&T Property Solutions are keen to hear from you if you are landlord who is thinking of selling up and getting out. We specialise in the purchase of regulated tenancies and problem properties in Glasgow and throughout the UK.

We aim to provide you with a confidential, hassle free transaction.

We can, if requested, buy your property for cash and are happy to take on properties which are structurally defective, un-mortgageable and of non-traditional construction.

We are experts in these types of properties, although we also purchase normal properties.

We offer quick sale turnarounds for structurally defective buildings and distressed vendors.

With extensive experience in residential and commercial property acquisition, our team will offer an effective, confidential and swift transaction, and more importantly, we do not require home reports.

Additionally, if you use one of our panel of solicitors, we can pay the fee.

So, if any of the above strikes a chord with you then get in touch with our team of experts right away.

Call our office on 0141 636 0521 and a member of staff will contact you. Whether you eventually sell to us or not, we will provide you with impartial advice regardless of your situation.