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Landlords struggling, stamp duty and overseas buyers, rent controls, and more property news

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Here is this weeks’ round-up of the latest property news and views ..

Many landlords ‘struggling financially’ and cannot subsidise rents

Many landlords face financial difficulty as tenants struggle to pay the rent when it falls due.

According to a story published by Landlord Today last week, less than half of the landlords questioned in a recent survey had received all the rent they were due since coronavirus restrictions were introduced in March.

In three-quarters of the cases where tenants have contacted their landlords, a rent holiday or a temporary reduction in rent has been agreed. But measures such as these leave landlords effectively subsidising rents – and many simply cannot afford to continue to do so.

The incidence of rent arrears is only likely to increase when the jobs furlough scheme comes to an end in October – when even more tenants will struggle to pay the rent.

It has reached the stage where 23% of those landlords who are struggling financially indicate that they are thinking about selling their buy to let property sometime before the end of the current stamp duty holiday at the end of next March, reported Landlord Today.           

Stamp duty: “Zero likelihood” tax rise will be scrapped for overseas buyers

If you are a foreign buyer looking for a home in the UK, you might want to act fast, before the cost of your purchase shoots up with effect from the 1st of April, suggested a piece in Estate Agent Today on the 15th of September.

At the moment – and until the end of March – foreign buyers are also able to take advantage of the stamp duty holiday on the purchase of homes valued at less than £500,000. With effect from the 1st of April, however, purchases by foreign buyers of residential property will be subject to a 2% stamp duty surcharge.

From next April, therefore, foreign buyers will – along with everyone else – lose out on the stamp duty holiday benefits but will also have a 2% stamp duty surcharge added to the bill for buying a home.

The likelihood of the government changing its mind on the treatment of foreign property buyers is zero, one tax expert is quoted as saying.

Rent controls would be a disaster for London renters

The National Residential Landlords Association (NRLA) has renewed its strenuous opposition to any suggestion about the reintroduction of rent controls in the capital’s private rented sector.

In a recent press release, the NRLA repeated its scorn for the London Mayor’s support for rent controls, saying that their reintroduction would see landlords leaving the market in droves, close off London to new residents, and further decay in the inner-city housing stock.

The NRLA’s latest report reinforces the stance we described it taking in our article dated the 12th of March 2020.

Homeowners remortgaging due to financial pressures of COVID-19

It is probably little wonder that many homeowners have been under such financial pressure because of COVID-19 – furloughed, short-time working, or unemployed – that as many as one in ten have needed to remortgage in an attempt to make ends meet, explains a report in Property Wire on the 14th of September.

Citing the findings of studies recently completed by NatWest Bank, the article said that 43% of those remortgaging said it was in order to reduce monthly mortgage repayments – though 19% also said it was to finance home improvement projects.

There have also been sharp changes in homeowners’ attitudes towards selling their homes. Of the four out of every ten homeowners who were intending to sell their homes before the pandemic, for example, 38% have now shelved those plans indefinitely while 47% are postponing any such decision until the economic situation has become clearer.

How a new work-life balance is changing attitudes in the UK housing market

A post-COVID reassessment of work-life balance is about to have a significant impact on the housing market, according to studies conducted by estate agents Savills and cited in an article posted by the Buy Association on the 15th of September.

The reassessment of an acceptable work-life balance has changed how people want to live and where they want to live, says the article. A garden or other outside space has become a matter of priority, for example, as has the capacity for any home to offer space for home working.

Seven out of ten of those surveyed thought that house prices will rise over the next five years, two out of ten believe they will fall, and 11% said they expected them to stay more or less the same.