The Chancellor has announced a shock 3% extra stamp duty on buy-to-let!

The full details are yet to be released but it has been announced today that George Osborne will be introducing a 3% surcharge on stamp duty for second homes and buy-to-let properties from April 2016!

Get buying your new properties now to save considerable amounts!

The Industry in a Nutshell

350,000 ‘Homeless’ by 2020

Rightmove has released figures stating that a lack of housing will result in 350,000 households being excluded from the housing market by 2020.

Those on low and middle-incomes will be affected the worst, as rents and house prices will keep going up. Households in London and the South East are particularly at risk: 26,000 households in London and 11,500 in the South East are already being priced out a year.

Worryingly, the data does not include right-to-buy property and the sale of council homes, which could actually impact house prices more severely than Rightmove have predicted.

And Only a Quarter Will Own a Home by 2025

By 2025 only 26pc of ‘generation rent’ (20-39yr olds) will own their own home.

PwC pointed out that 38pc had bought a house in 2013.

Meanwhile, 59pc of generation rent will be in private rental accommodation, up from 45pc in 2013.

The expected shift rings true – houses are getting far too expensive and only those earning well over the national average salary can realistically afford to buy a house. A typical required income would be £50,000 to fund a purchase.

Source: PwC

Buy-to-Let Mortgage Rates Plunge Again

Rental properties are in high demand. Huge demand, in fact. Rents are going up because supply is going down.

As such, lenders are climbing over each other to offer the best rates to investors. Landlord loans have fallen significantly in the past five years, from a typical 5.23pc two-year fixed term in 2010, to 3.26pc.

Five-year fixed rates have also fallen from 6.12pc to 4.06pc in the same period.*

Landlord lending was up 7pc in September, and is up 36pc year on year, according to the Council of Mortgage Lenders data.**

However, interest rates are likely to increase next year, which should bring an end to the low-cost deals.

Source: http://www.express.co.uk/finance/personalfinance/619761/Buy-To-Let-mortgage-rates-plunge-lenders-enter-loan-war

*moneyfacts

** CML

Buy-to-Luton

Luton has seen its rent increase more than anywhere in the UK this year, besides London.

Rents in Luton have risen by 10.4% this year, to an average of £722pcm. The average across the UK (excluding London) has been 3%.

Landlords could benefit from buy-to-let investments in the area as renters who struggle to meet the demands of the capital move north to commute.

Other areas around the outskirts of London have also registered big increases in rent, including Swindon and Southend on Sea (both 9.7%).

We have recently published a set of reports categorising the best buy-to-let investment locations in the UK. Download them here for an insight into where you could invest next.

Source: This is Money

Nine Ways To Maximise Your Buy-To-Let Profits

Many landlords are concerned that announced tax changes in the buy-to-let sector will wipe out their profits.

So, how can you claim against the tax? Most of the basics still apply – buying and furnishing properties are capital expenditure and therefore not claimable – but there are elements of your portfolio that are claimable.

Mortgage interest

You are currently allowed to offset your mortgage interest against your tax bill at your personal tax rate.

Unfortunately, this is set to change – controversially. Landlords won’t be able to deduct their mortgage from their rental income once the changes are implemented. Instead, you will be taxed on the rent you have received, not the profit you make. Therefore, you can be taxed on profit that isn’t there – you can be taxed more than 100% of your profit.

Mortgage fees

Broker and arrangement fees are tax deductible and claimed for the year that the mortgage was arranged.

Letting agent fees

Based on a national average rent of £749 and an average agent’s fee of 10-15pc of the monthly income, you can claim back all of these. This could equate to £1,350 a year.

Securing a tenant

Landlords who find tenants without the help of an agent can claim back the cost of advertising for tenants, purchasing tenancy agreement, credit checking and other costs. You can expect these to cost roughly £300 each time a new tenant moves into your property.

Building and contents insurance

Cover for low-risk buy-to-let properties costs around £200 a year. This is claimable.

Maintenance and repairs

Although getting the property fit for purpose is capital expenditure, keeping it that way isn’t. Wear and tear is claimable. Maintenance costs include mending windows and doors, white goods, furniture and decorating.

Furniture

Another area subject to change. Your current 10pc wear and tear allowance is being replaced by an ‘actual costs’ tax allowance. Therefore, you will only be able to claim back on the furniture you replace in a tax year.

Ground rent and service

If you are a leaseholder you probably pay ground rent to the freeholder. You can also claim back the costs of gardening and electrical costs, cleaning, heating and lighting in common areas, and security and concierge staff. Depending on how many of these you incur a year, it would make sense to claim on them.

Council tax and utility tax

If you are paying the bills that a tenant would normally pay, you can claim back the whole cost. A major benefit is that you can claim these costs even during void periods.

Others

Other direct costs such as phone calls, stationery and traveling expenses to make home visits are claimable.

You can also claim back on the fee of an accountant who prepares your tax return.