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Are we heading for a buy-to-let exodus?

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The number of homes for rent in Britain could drop dramatically, as landlords leave the market thanks to higher taxes and stricter rules.  

Almost a million landlords, more than a third of the total, will review their property portfolios in the next year, according to the Nottingham Building Society, and the number planning to sell homes outnumbers those planning to buy new ones.

A fifth plan to sell some or all of their portfolio, it said, while 16 per cent plan to buy more. 

While those homes going to first-time buyers or families would help more people climb onto or up the property ladder, it could also lead to a shortage of roperty to rent. In some popular parts of the the country a lack of rental homes has recently led to bidding wars.

Letting go: There are more landlords considering selling their buy-to-lets than there are new ones wanting to buy them, according to two reports

Letting go: There are more landlords considering selling their buy-to-lets than there are new ones wanting to buy them, according to two reports

Meanwhile, a new report by the University of York and the Nationwide Foundation found that a large cohort of baby boomer landlords were now ‘ageing out’ of the market –  and were not being replaced at the same rate by younger landlords due to diminished returns and more stringent regulation.

This, it said, could mean that there are not enough rental homes to go around in future – especially for those tenants on lower incomes and who receive benefits.

It added that across the entire sector, there was a fall of 30 per cent in the volume of buy-to-let mortgages between 2014-15 and 2018-19.

Both reports noted that tax changes have been one of the main factors making buy-to-let less attractive for some. Previously landlords got tax relief on mortgage interest, but this ended in April 2020.

There are also new restrictions on private residence relief, which reduces the capital gains tax due on homes which people rent out after living in them.

Dr Julie Rugg, lead author of the report, said: ‘Letting property looks altogether different to landlords now: it looks like a much risker proposition, delivering a lower level of return and with a lot more hassle.

‘As one landlord said to me, ‘stocks and shares may not deliver the same level of return, but they don’t phone me on a Sunday morning because the boiler’s bust”.

‘We feel we’re being picked on’: Landlords have their say 

 The University of York report features interviews with landlords, who gave an insight into their thoughts about the buy-to-let market. 

One smaller portfolio landlord who self-managed with his wife said: ‘We want to wash our hands of the whole thing and take the money out. 

‘It’ll mean that we won’t have an income but we think we might have enough capital to carry on to, well, the rest of our lives. We’re 72 now so, being realistic, we might only have another few years left.’ 

On Universal Credit, one landlord said: ‘It’s another nail in the coffin because the legislation’s getting tighter, the mortgage interest rate change was a massive thing, the loss of Section 21 that’s on its way. 

‘It’s just, yes, we feel like we’re being picked on and must be top of the list, someone doesn’t like us sort of thing’ 

A Leeds-based landlord said that people in receipt of benefit carried too many disadvantages compared with other tenants: ‘If I can get somebody who can pay on the day he walks into the house, pay a month in advance plus a month deposit, why would I bother taking someone who can’t pay for five weeks and I can’t get insurance on? It really doesn’t make any sense’.

However, another was more lenient: ‘Personally, I’ll take a good-as-gold tenant on benefits over probably like a normal tenant, because if you treat them right and make sure the house is all looked after and stuff, they stay a long time. They’re happy. 

‘I’ve got plenty of DSS tenants that take pride in their houses and they’re always asking me, ‘Can I paint? I can do this? Can I change the carpet?’

Rugg also mentioned the ‘regulatory burden’ which landlords felt they were faced with thanks to stricter Government rules on how they managed their tenancies.  

They are now open to possible criminal convictions and fines of up to £30,000 if they contravene the Housing Act, for example. 

Restrictions on landlords’ ability to serve section 21 ‘no fault’ eviction notices also meant that some landlords were worried that they would be unable to evict problematic tenants, the York report noted. 

Some landlords interviewed in the report said they had ended up paying such tenants to leave. 

Denise Wells, head of mortgage operations at The Nottingham, said: ‘Our research suggests sellers currently outnumber buyers in the buy-to-let market with regulatory issues and tax changes among the reasons persuading landlords to pull out of the market.’

Some landlords complained about the 'hassle' of managing tenancies in a climate of diminishing returns (picture posed by models)

Some landlords complained about the ‘hassle’ of managing tenancies in a climate of diminishing returns (picture posed by models)

Interest still remains in property investing 

But despite these changes, The Nottingham also found that 11 per cent of people who have never been landlords want to purchase a buy-to-let in the next five years.

‘It remains the case that there are potentially strong returns to be earned in the buy-to-let market and we continue to see landlords buying rental properties whilst our research indicates that many more potential landlords are considering going into the market too,’ Wells added.

According to The Nottingham, their main reason for potentially investing in buy-to-lets was the low rates available on cash savings. 

More than half (55 per cent) said they wanted to put their cash into property to earn a better return while 48 per cent saw buy-to-let as a good way to diversify their investments and 42 were confident buy-to-let would generate a good income.

Most landlords interviewed in the York report were of the view that new entrants to the market could make it ‘stack up’, if they bought the right property in the right place. 

However they also questioned whether – given what they regarded as a ‘hostile environment’ for landlords – it would be wise to take the risk. 

Landlords' reasons for buying and selling homes, according to The Nottingham

Landlords’ reasons for buying and selling homes, according to The Nottingham

Low-income tenants could be hit particularly hard 

The York study found that many landlords had a ‘No DSS’ policy and would not rent to benefit claimants.

Of landlords that had been in the market for three years or less, only 9 per cent said they rented to tenants receiving housing benefit, along with 28 per cent of those in the market for more than 11 years.

The landlords said they were unhappy about the long delays with initial payments of housing benefit and problems with managing Universal Credit, and found it easier to deal with tenants who didn’t need help paying the rent.

Larger landlords renting to tenants receiving benefits were much more likely to be planning to reduce their properties or exit the market than to increase their lettings.

However, it noted that there were some locations where increases in the housing benefit rates combined with low house prices mean that landlords can achieve better returns by letting to benefit recipients, compared with letting on the open market.

And it said that some landlords were increasingly targeting the housing benefit claimants with the greatest additional needs, where rent is paid directly to the landlord.

Rugg added: ‘It’s a real concern that many good, professional landlords are no longer letting to housing benefit claimants because of the way that Universal Credit is administered’.

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Higgins raises concerns over volume of legislation received in recent weeks

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Two Oireachtas committees are being convened at short notice to consider concerns raised by President Michael D. Higgins at the volume of legislation sent to his office in recent weeks.

In a letter to the Ceann Comhairle, the Cathaoirleach of the Seanad and the Department of the Taoiseach, Mr Higgins said an “overwhelming number of Bills” were presented for his consideration in the final two weeks before the Christmas and summer recesses.

“For example, in the three weeks since the beginning of July I have been asked to consider 19 separate Bills. Nine were presented on the one day, sharing a requirement to be considered and signed in the same seven-day period,” he wrote, pointing out that in the entire preceding six months, he was presented with 13 Bills for consideration.

Last year, 21 of the total of 32 Bills presented to him were sent in the weeks approaching summer and Christmas recesses.

“It would strike me, as President and from my years as a parliamentarian, that there must be a more orderly approach to arranging the legislative timetable that allows all legislators the time to consider and contribute to proposals before the Oireachtas without unnecessary time constraints and an unseemly end-of-term haste to have Bills concluded,” the President wrote.

“Having this vital work concentrated into four weeks of the year strikes me as being less than ideal and, I believe, unnecessary.”

Mr Higgins noted that little time was being given over in the Oireachtas to debate often “very important and far-reaching legislative proposals”.

He said the process has “been curtailed through the imposition of restrictions on time in one or both Houses”.

He said amendments put down by Oireachtas members were often not discussed, and those proposed by the Government were at times “carried without an opportunity for scrutiny or debate”.

The President noted an “unseemly end-of-term haste”to pass legislation and said a “real prospect” of having to convene the Council of State in the days after Christmas day to consider Bills had arisen more than once.

Seán Ó Fearghaíl, the Ceann Comhairle, told The Irish Times that the Dáil’s Business Committee and the Seanad’s Committee on Procedures would meet on Friday to consider the letter, and actions open to the Oireachtas to consider.

There have been renewed concerns during the lifetime of this Dáil about the use of the guillotine to force Government legislation through without extensive oversight, with several heavyweight pieces of legislation passed in a matter of days before the Oireachtas rose for its summer break earlier this month.

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Who do I need to notify if I move home?

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Moving house is frequently said to be one of the most stressful things anyone can do.

The massive investment both financially and emotionally can take its toll, especially if the process takes months to complete.

It is why anything that helps to elevate some of the stress along the way can be hugely beneficial. This includes addressing some of the practicalities in advance, and having a list of who to notify when you move can help. 

We look at some of the organisations and companies who you may need to contact when you move home

We look at some of the organisations and companies who you may need to contact when you move home

Dozens of companies will need to know your new address, whether this is an insurer who may use them to help calculate your insurance premiums or a retailer who need to know where to send the clothing you ordered online.

Without updating them, you may endure a bigger headache from moving home than you had anticipated.

North London estate agent Jeremy Leaf, said: ‘When moving home, it is vital to plan ahead. Moving day can come upon you very quickly, particularly if there is a short time between exchange and completion.

‘Buildings insurance is the most important thing that needs arranging on your new property as soon as you have exchanged contracts.

‘Confirm your moving date with your removals firm and make a list of who needs notifying about your impending change of address – the electoral roll, the DVLA, Amazon and other delivery firms, particularly supermarket deliveries. The last thing you want is for your orders to turn up at your ‘old’ address once you have moved.

‘Don’t forget to change your council tax, while utility providers will also need informing, and given final meter readings. The more you plan ahead, the smoother the process will be.’ 

A checklist for who to notify when you change address can help to elevate some of the stress of moving home

A checklist for who to notify when you change address can help to elevate some of the stress of moving home

Tom Parker, of property website Zoopla, agreed: ‘Moving home can be overwhelming with so much to do. When it comes to notifying organisations, it’s best to divide it into digestible categories like work, household and vehicle.

‘Notifying your employer is a top priority, especially if your payslips are sent to your home. If you own a vehicle, ensure you update your driving licence, insurance providers and vehicle logbook.  

‘Make sure you also notify organisations like your broadband, utilities, insurance providers and council tax. Finally, don’t forget the small things like magazine subscriptions and store cards.’

Here we look at some of the organisations and companies who you may need to contact when you move home.

Employment 

Perhaps one of the most important and probably most overlooked places that need to be notified of your change of address is HMRC, which needs to know for tax purposes.  

Similarly, your employer needs to know when you change address for your payroll, so that it can update your contact details.

In addition, your National Insurance number helps the Government to identify you and is used by the organisations such as the DVLA and HMRC, so this will need your new address attached. 

Household

There are various companies providing services to your household that will need to know about your move so that they can update your contact information.

In some cases, you may end up continuing to pay for a service in your former home that you are no longer using if you fail to update these companies.

They include your cable or satellite provider, your phone and broadband company. It is also important to update your TV licence contact details, which can be done up to three months before a move.

Vehicles

You can update DVLA via its website and within two to four weeks, you should receive an updated licence and V5C log book documents for your car. Failing to update the log book could lead to a fine of up to £1,000.

You will also need to notify the supplier of your vehicle breakdown cover and your car insurer.

Insurance

Most insurers take postcodes into account when calculating premiums and the cost of insurance cover, so they will need to be notified of your change of address. 

You may need to contact those insurers who provide cover for household contents, health, life, travel and your pets.

Healthcare

As well as your health insurer, you will also need to provide your address to other healthcare organisations.

For example, if you change doctors when you move home, you will need to let your old doctor know so that your medical information can be forwarded to your new doctor. This may similarly apply to your dentists and opticians.

Utilities

Your gas, electricity and water suppliers will need your updated contact information, even if you are leaving them behind at the old property and taking on new suppliers.

It can take a couple of days for energy providers to update your information, so it is worth contacting your suppliers ahead of your move. However, you may be able to move your deal to your new property.

Make sure you take readings of your utilities on the day of your move so you can update your suppliers with these and only pay for the amounts you have used. 

Royal Mail’s redirection service may be worth considering as it forwards any post sent to your former address to your new address. You can apply for the redirection up to three months before your moving date.

Money

There are several companies and organisations that fall into this category and will need to know your new contact address.

They include bank and building societies, your pension providers, loan companies, credit card providers and store cards. If you are on a state pension, the Government will need to know your new details.

Similarly, you will need to update your address for council tax purposes.

Others include your accountant as you don’t want important tax documents going to your old address (if you are not using the a postal redirection service). And don’t forget updating NS&I with your new address if you put money into premium bonds.

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Ireland ‘one of world’s best five places’ to survive global societal collapse

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Ireland is one of the world’s five places best suited to survive a global collapse of society, according to a new study. The others are Iceland, Tasmania, the UK and, topping the list, New Zealand.

The researchers say human civilisation is “in a perilous state” because of the highly interconnected and energy-intensive society that has developed and the environmental damage this has caused.

A collapse could arise from shocks such as a severe financial crisis, the effects of the climate crisis, destruction of nature, an even worse pandemic than Covid-19 or a combination of these, the scientists says.

To assess which nations would be most resilient to such a collapse, countries were ranked according to their ability to grow food for their population, protect their borders from unwanted mass migration, and maintain an electrical grid and some manufacturing ability. Islands in temperate regions and mostly with low population densities have come out on top.

The researchers say their study highlights the factors that nations must improve to increase resilience. They say that a globalised society that prizes economic efficiency has damaged resilience, and that spare capacity needs to exist in food and other vital sectors.

Billionaires have been reported to be buying land for bunkers in New Zealand in preparation for an apocalypse. “We weren’t surprised New Zealand was on our list,” says Prof Aled Jones, at the Global Sustainability Institute, at Anglia Ruskin University, in the UK.

“We chose that you had to be able to protect borders and places had to be temperate. So with hindsight it’s quite obvious that large islands with complex societies on them already” make up the list.

The study, published in the journal Sustainability, says: “The globe-spanning, energy-intensive industrial civilisation that characterises the modern era represents an anomalous situation when it is considered against the majority of human history.”

The study also says that environmental destruction, limited resources and population growth mean civilisation “is in a perilous state, with large and growing risks developing in multiple spheres of the human endeavour”.

New Zealand was found to have the greatest potential to survive relatively unscathed due to its geothermal and hydroelectric energy, abundant agricultural land and low human population density.

Jones says major global food losses, a financial crisis and a pandemic have all happened in recent years, and “we’ve been lucky that things haven’t all happened at the same time – there’s no real reason why they can’t all happen in the same year”.

He adds: “As you start to see these events happening I get more worried, but I also hope we can learn more quickly than we have in the past that resilience is important. With everyone talking about ‘building back better’ from the pandemic, if we don’t lose that momentum I might be more optimistic than I have been in the past.”

He says the coronavirus pandemic has shown that governments can act quickly when needed. “It’s interesting how quickly we can close borders, and how quickly governments can make decisions to change things.”

But, he adds, “This drive for just-in-time, ever-more-efficient economies isn’t the thing you want to do for resilience. We need to build in some slack in the system, so that if there is a shock then you have the ability to respond because you’ve got spare capacity. We need to start thinking about resilience much more in global planning. But, obviously, the ideal thing is that a quick collapse doesn’t happen.” – Guardian

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