Is gentrification really lining Landlord’s pockets?

By | Bromley & Beckenham property management, Food for thought, property, Property market, Uncategorized | No Comments

“Gentrification” is a term first expressed by the sociologist Ruth Glass in 1964 to explain the return of an emerging middle class in London’s center.

With beard sporting, headphone clad hipsters on the rise- scurrying from pop up designer coffee shop to coffee shop is it any wonder that gentrification is a hot topic for discussion.

Until recently, only stuffy academics and demographic geographers for local councils would coin the term. Recently however, the word has entered our national zeitgeist.

It is generally understood that gentrification means that demand and property values rise, poorer residents end up replaced by wealthier, professional classed people with a soiree of new shops and neighborhood changes.

South east London is set to become the new fashionable Soho. Known to be Grimy and rough around the edges only ten years ago today’s Bromley, Beckenham and Peckham seem vastly changed in today’s London.

So with this in mind, despite the political pros and cons – the rising question among Landlords is: Is this good for us, or do we ultimately end up out of pocket?

Let’s take a look at some crime statistics:

The Metropolitan police crime statistic rates states that in the borough of Bromley the number of occurrences has actually increased over the past year.

October 2016 – October 2017 = 24,494 occurrences

October 2017 – October 2018 = 24,900 occurrences

Metropolitan Police Crime Statistics

with this as it may be perhaps gentrification is not such an ideal, although the general rise on crime over the past few years means that perhaps only a slight rise is actually a pleasant side effect of gentrification.

Lets take a look at house prices:

As the guardian states:  The average property sold in London fetched £40,000 in 1983; the figure is now £449,000. With the shocking surge in house prices over the last few years, renting has become the new in thing for younger generations looking to get their share of the big city. This is of course great news for Landlords but there are few things we should bear in mind.

The Guardian

With the rise in rentals comes a rise in the amount of competition. Landlords seeking to attract the best clientele in a soon saturated market. Attracting a potential tenant can be a developing problem. That’s where property management companies can provide large scale advertisement without additional costs. Check out Your Professional Lets for a highly recommended service: Your Professional Lets

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Let’s take a look at demographics:

The expectant state is that with a large increase in the price of living with newly gentrified areas -comes the topic of who can afford to live in these areas such as; Bromley, Beckenham, Lewisham, Croydon. It might be surprising to note however that this mass exodus of tenants to the outer skirts has not happened. There is a small amount of evidence to suggest from charities and food banks that poorer residents are staying and just paying more for their amenities. With that as it may whilst tenants who are not able to keep up may end up being moved to other areas it does that mean that the quality of residents is developing substantially.

It appears that overall Gentrification is set to continue to be a point of conversation for areas such as Bromley. With crime rising, house prices rising exponentially, and the actual demographics still unclear it is impossible to say whether gentrification is the blessed golden treasure chest for landlords.

Slowing inflation still racing ahead of rent in Bromley

By | Bromley & Beckenham property management, Property market | No Comments

Uncertainty for the value of rent in Bromley following announcements made this week.

Changes in the UK’s inflation rate and private rental prices across the UK threaten the profits of landlords in South East London and the yield of rent in Bromley.

The UK’s inflation rate dropped to 2.6% in July 2017, down from 2.9% (its four year high) last month, following fuel prices which were less than previously expected.

Simultaneously, the Office for National Statistics (ONS) has reported that private rents in the UK increased in the last months by just 1.8%.

Inflation in rental prices has not changed for three months in a row, as these figures show from the Index of Private Housing Rental Prices (IPHRP).

This is obviously bad news for Bromley landlords, as this means that rents in the private sector have gone down, relative to inflation, over the past year.

In much of England rents grew stronger than in the capital. Parts of London saw just 1.3% growth, whereas other areas of England have up to 1.9% growth.

Wales saw 1.1% growth, while Scotland saw the lowest with just 0.2% growth.

While rental prices in the private sector have shown yearly growth less than the Consumer Price Index (CPI), some policy makers remain keen to cap rents at or near inflation.

If this is their plan they will need to be aware that they risk allowing such policies to produce a 69% faster increase in rents than we have seen since July 2016.

HMRC providing help & support for Bromley & Beckenham landlords

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How can in Bromley and Beckenham landlords make sure they file their taxes correctly in 2016-2017?

Webinars, e-learning and videos are just some of the methods that HMRC is using to help Bromley and Beckenham landlords to ensure they file correct tax returns this year.

To help save you the time we have put together some of the key information that the government has released for your benefit.

Click this link to HMRC’s course on letting out property.

Click this link to download HMRC’s Property Rental Toolkit (it shows key errors that HMRC often sees in returns and explains how to avoid them).

Click this link to watch HMRC’s video playlist on Self Assessment Help & Deadlines.

Register for a live webinar on 26 July 2017 (1.30pm to 2.30pm): here.

The topic will be ‘Income from property for individuals’ and will help new landlords and those considering becoming landlords understand what they need to do for HMRC. It covers registration, record-keeping and schemes such as Rent a Room.

The webinar will last up to an hour. You can ask questions during the presentation and get answers from your HMRC host.

Alternatively you can watch this webinar from December 2016 on the same topic.

Or this webinar on the new mortgage interest relief rules for landlords from June 2017, which includes a worked example.

What does the coming buy-to-let crackdown mean for Bromley & Beckenham landlords?

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What do changes to the buy-to-let landscape mean for landlords in Bromley & Beckenham?

In September buy-to-let landlords in Bromley & Beckenham as well as the wider South East London area will again be expecting to feel the pinch. The government has announced that it will double down on its crackdown on buy-to-let investors.

From two months’ time tougher standards will be placed on Landlords with four or more properties mortgaged. Portfolio landlords may find it harder to obtain an additional new mortgage.

The changes come from the Prudential Regulation Authority (part of the Bank of England).

What are the implications?

This means lenders will have to consider a Bromley & Beckenham landlord’s full portfolio before deciding what kind of mortgage they can provide on a single property. This is the first time this has kind of regulation will be enforced.

One implication is that lenders may require proof of rental income, a business plan and ‘stress test’ before mortgage approvals.

Some buy-to-let brokers have restrictions in place already for those landlords who exceed certain limits – between three or four or exceeding £1-2m in value.

However, nowadays it is rare brokers to consider whether landlords have buy-to-let mortgages taken out with a different lender.

Are the concerns of landlords in Bromley & Beckenham justified?

Many Mortgage Brokers worry that landlords in Bromley & Beckenham will decide they can no longer continue to operate.

It will also means that the amount of work lenders have to do increases dramatically. Experts have also warned lenders could stop lending to these landlords at all.

If this happens it will be because the increased underwriting will add costs to brokers work. Subsequently landlords will be hit with higher costs as well, making mortgages more expensive for landlords with larger portfolios.

Another implication is that there will be few options available to these landlords over the coming 12 months or more.

Lenders are also worried that this will affect the overall property market. In fact, borrowers are being urged to set up new deals they can before the new rules come into effect on September 30.

While Parisians welcome ‘Macron effect’—what next for Brexit era Bromley and Beckenham?

By | Bromley & Beckenham property management, Property market | No Comments

Paris is a world away from Bromley and Beckenham, but how do they compare following two very different election results?

London’s property prices have been dampened by Brexit, including in the key boroughs we serve in Bromley and Beckenham. However, there are reports that housing in Paris is booming thanks to the election of new President Emmanuel Macron.

Called the ‘Macron effect’, investors and developers have been given new confidence in Paris’ property market. This is because Macron is seen by many as being a safe pair of hands.

“We’ve now got a powerful combination of positive factors for the market: low interest rates, the Brexit effect [ . . .] and the election of President Macron that has brought a wave of optimism,” said Hugues de La Morandière, a high-end Parisian property agent, as reported by The Financial Times.

Circumstances seem rosy across the channel. So what lies in store for Britain’s property market and Bromley and Beckenham in particular?

Well, it is not all doom and gloom, as you might think. A prediction by Savills indicates that while prices maybe flat across the UK for 2017 they are expected to have risen by 13% by 2022.

Now, that is still a dramatic slow down from previous years, but many in the property sector argue that this more steady growth is potentially more healthy in the long term.

Many property experts also believe that falling prices at the top of the property market, and a slowdown everywhere else, have been caused by changes to stamp duty, and not the referendum.

Property prices and rental yields may look more sunny in the short term in France, but they are not as bad as some here in London would have you believe.

All in all good news for people investing wisely in Bromley and Beckenham property management services.

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