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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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Tungsten and BC Partners launch €296m industrial JV (GB)

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Tungsten Properties have signed a transformative €296m (£250m) JV funding agreement with BC Partners. The newly formed joint venture company will target single and multi-let industrial opportunities across the UK, which will range from last-mile to big box logistics warehouses with a GDV of greater than €29.6m (£25m). Tungsten Properties will act as asset and development manager for the joint venture. With a strong conviction in the underlying occupational fundamentals of the industrial warehousing sector, the joint venture has already identified a strong pipeline to initially seed the partnership.

 

Jeff Penman, managing director, Tungsten Properties said:“This is a significant step in Tungsten’s expansion strategy to continue to deliver industrial and warehouse space to create growth, jobs and investor returns. This transformational JV agreement with BC Partners will provide reliable capital to continue delivering strategically located, environmentally friendly buildings across the UK. While there is volatility in the capital markets, both Tungsten and BC Partners believe that the industrial market’s long-term fundamentals remain strong. With a fighting fund behind us, we look forward to securing further opportunities.”

 

Laurian Douin, partner, BC Partners said: “The UK industrial and warehouse sector has strong secular fundamentals. Given Tungsten’s strong track record and like-minded approach to development, we are thrilled to partner with them to jointly invest in this asset class. The joint venture intends to deliver well-located, exceptional schemes to meet occupier demand, with a particular focus on schemes’ environmental credentials in-line with BC Partners Real Estate’s commitment to ESG.”

 

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Four homes for sale with swimming pools: With price tags from £1.1m to £190k

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Owning a property with a swimming pool might seem like one of life’s luxuries that is reserved for millionaires.

But, as our pick of homes for sale with swimming pools proves, you don’t have to have a multi-million pound property to have one.

That said, you may still need deep pockets for their upkeep, which can be costly, particularly if you want to keep your swimming pool heated to a comfortable temperature.

While water shortages and hosepipe bans are hitting the headlines, a pool that is already filled with water will not draw on resources but may be forbidden from being topped up by hosepipe in the case of a ban.

Our pick of four properties for sale with swimming pools are for various budgets, ranging from £1.1million to £190,000 (scroll down for more information about the house pictured)

Our pick of four properties for sale with swimming pools are for various budgets, ranging from £1.1million to £190,000 (scroll down for more information about the house pictured)

Here, we take a look at four swimming pools at properties for those with a range of different budgets.

At the top end is a six-bedroom house in Ramsgate, Kent. with an acre of land that includes an outdoor swimming pool. It has a price tag of £1.1million.

At the other end is three-bedroom property in Ashington, Northumberland, with an empty indoor swimming pool and an asking price of only £190,000.

Daniel Copley, of Zoopla, said: ‘With Britain currently experiencing a heatwave, it’s no surprise that homes with swimming pools are proving to be increasingly popular.

‘Whether your budget is more in the deep or shallow end, some homes with pools may be more affordable than you think.

‘While the rise in energy bills will have a very real impact on those wanting to heat a pool, at this time of year a refreshing dip may be just what’s needed.’

Four properties with swimming pools… 

1. Six-bed house, Ramsgate, £1.1m

The most expensive house in our list of properties with swimming pools is this £1.1million home in Ramsgate, Kent, which is being sold by Miles & Barr estate agents

The most expensive house in our list of properties with swimming pools is this £1.1million home in Ramsgate, Kent, which is being sold by Miles & Barr estate agents

The property is called Pond Cottage and it boasts a large outdoor swimming pool that has a curved slide at the side

The property is called Pond Cottage and it boasts a large outdoor swimming pool that has a curved slide at the side

Inside the property, the entertainment facilities continue - with a cinema room that has black chairs and a red carpet

Inside the property, the entertainment facilities continue – with a cinema room that has black chairs and a red carpet

The most expensive house in our list of properties with swimming pools is this £1.1million home in Ramsgate, Kent.

It boasts more than an acre of land that includes a large outdoor swimming pool, a patio and a pool area.

The property is called Pond Cottage and it is being sold by Miles & Barr estate agents.

2. Five-bed semi-detached house, Welling, £625k

This semi-detached property in Welling, Kent, may not look like it can house a swimming pool from the front aspect

This semi-detached property in Welling, Kent, may not look like it can house a swimming pool from the front aspect

A slimline swimming pool has been added to the rear of the house and it has been covered to protect it from the elements

A slimline swimming pool has been added to the rear of the house and it has been covered to protect it from the elements

The Kent property is on the market with a price tag of £625,000 and the sale is being handled by estate agents MS Estates

The Kent property is on the market with a price tag of £625,000 and the sale is being handled by estate agents MS Estates

This semi-detached property in Welling, Kent, may not look like it can house a swimming pool from the front.

But a slimline swimming pool has been added to the rear of the house. It is on the market for £625,000 via MS Estates.

3. Five-bed house, Ripon, £450k

This three-bedroom house in Ripon, North Yorkshire, was once a barn and has been converted into a family home with a swimming pool

This three-bedroom house in Ripon, North Yorkshire, was once a barn and has been converted into a family home with a swimming pool

The curved shaped indoor swimming pool sits below wooden beams and has a separate bar area for entertaining

The curved shaped indoor swimming pool sits below wooden beams and has a separate bar area for entertaining

The barn conversion has a colourful interior and is on the market for £450,000 via Solo Property Management estate agents

The barn conversion has a colourful interior and is on the market for £450,000 via Solo Property Management estate agents

This three-bedroom barn conversion in Ripon, North Yorkshire, boasts an indoor swimming pool and bar area.

It is on the market with a price tag of £450,000 and the sale is being handled by Solo Property Management.

4. Three-bed house, Ashington, £190k

This three-bedroom house in Ashington, Northumberland, is the cheapest in our list of properties for sale with swimming pools

This three-bedroom house in Ashington, Northumberland, is the cheapest in our list of properties for sale with swimming pools

The 1930s detached property has an indoor swimming pool that isn¿t currently being used because it has been left empty

The 1930s detached property has an indoor swimming pool that isn’t currently being used because it has been left empty

The three-bedroom property is currently for sale for £190,000 and is being sold via Rook Matthews Sayer estate agents

The three-bedroom property is currently for sale for £190,000 and is being sold via Rook Matthews Sayer estate agents

This three-bedroom house in Ashington, Northumberland, is the cheapest in our list of properties for sale with swimming pools.

It is a 1930s detached property with an indoor swimming pool that isn’t currently being used as it is empty.

The property is for sale for a relatively cheap £190,000 and is being sold via Rook Matthews Sayer estate agents.

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Barwood Homes invests in Woodville resi scheme (GB)

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Harworth Group plc has completed the sale of an eight-acre land parcel at Woodville, Derbyshire to Barwood Homes for the delivery of 73 new houses. This represents Harworth’s first transaction with the Northampton-based housebuilder. The land parcel forms part of a 53-acre regeneration site which is owned by Beepart Ltd, part of Dyson Group, the Sheffield-based former manufacturer of industrial materials. Harworth is promoting the site on its behalf through a Planning Promotion Agreement. In April 2022, South Derbyshire District Council granted outline consent for the creation of up to 300 homes on the site, in addition to a c.30,000ft² local center with convenience retail and leisure amenities and over 150,000ft² of employment space for a range of uses.

 

The wider site has been unlocked by the delivery of Derbyshire County Council’s Woodville to Swadlincote Regeneration Route, which opened to traffic in December 2021, providing better access to Swadlincote and traffic relief in Woodville, as well as improved connectivity across the site. Preparation works will commence shortly for the next phases of residential and employment land sales at the development.

 

Ed Catchpole, Regional Director for Yorkshire & Central at Harworth, commented: “This sale is a fantastic start to the development at Woodville and we are pleased to welcome Barwood Homes to the site, who will deliver high-quality new housing for the local community. Our focus is now on bringing forward the rest of the development, utilising our extensive experience in the remediation of complex sites, including earthworks and infrastructure, to ready the remaining residential and employment land.”

 

Luke Simmons, Managing Director of Barwood Homes, added: “We are delighted to be working alongside Harworth on this exciting development. The team is looking forward to engaging with the local community as we gear up to deliver a scheme of excellent quality in design, build and service.”

 

Gavin Rosson, Managing Director of Dyson Group, added: “This first sale of a residential portion of the site is an important step in unlocking the full development potential of the whole, something we have been trying to achieve for many years. Such development will help regenerate Woodville and the surrounding area, somewhere we have had a presence since 1967 and are delighted to participate in.”

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