Real Estate

It’s been well publicised that Buy-to-Let landlords have been hit in the pocket by recent updates to the tax regime around the investment class. However, according to a recent survey by property consultants Knight Knox, the Yorkshire and Humber region is still thriving. In defiance of the 3% stamp duty hit added to the cost of buying buy-to-let or second properties and landlords no longer being able to deduct mortgage interest from taxable rental income, average gross rental yields in the region rose last year.

Mortgage data suggests that recent changes to the tax regime around investment properties is leading to waning enthusiasm among buy-to-let landlords. However, with the UK property market’s performance becoming increasingly fragmented on a regional level over the last year or two, certain areas are still a hotbed for buy-to-let.

After nearly a decade over which prices have been strongly on the up, the UK’s property market has notably slowed over the past 12 months or so. Halifax reported this week that April saw a 3.1% drop in average prices on a country-wide basis. Over the last quarter, a more accurate gauge than any single month, prices edged down by 0.1% when compared to the previous 3 months. April’s slide was the most significant since 2010 and naturally prompted concerns it may mark the onset of a more sustained malaise for house prices.

Do you own more than one investment property? If so, re-mortgaging them is probably about to become a lot harder. New directives issued to the UK’s banks and building societies last year by Bank of England branch, the Prudential Regulation Authority, specifically targeted ‘portfolio landlords’ who own four or more investment properties and operate outside of a limited company structure. They mean tightened requirements that require the whole portfolio to be assessed rather than just the property a re-mortgage is being applied for. Until now approval criteria were based solely on the financials of the property being re-mortgaged.

Blockchain technology is best known as the technology that cryptocurrencies such as Bitcoin run on. However, for those not interested in investing online in cryptocurrencies, recent developments mean that in the near future your next investment properties might also be purchased over a blockchain platform. Many experts believe that one of blockchain technology’s most natural and effective applications will be in changing the way property deals are done.

Milan is becoming a bit of a hotspot for international investors looking for properties. While the capital of Lombardy doesn’t have the same tourism pull as other Italian renaissance cities like Rome and Florence, it actually boasts more visitors. MasterCard’s Global Destination Cities Index puts the number of visitors to the city over 2017 at 8.17 million compared to Rome’s 7.09 million. The reason behind the high visitor numbers can be linked to why property investments in the city have become so popular – business is booming. More than 25% of the visitors to Milan come on business, compared to only 14% of the total to Rome.

The slowdown in London’s housing market has been well documented over recent months. Prime London sales have been reported as going through on an average of 10% below the asking price and sales numbers have generally slowed since the Brexit vote as buyers adopt a cautious ‘wait and see’ approach. While the wider London area, after several years of runaway price increases, is expected to see minor to stagnant property price increases over the coming twelve months, the malaise has generally been reported to have had by far the greatest impact on the most expensive neighbourhoods.

There hasn’t been a lot of cheer in recent months for buy-to-let landlords with investment properties in and around London. Property prices and rents in London seemed to be on an inexorable rise during a long boom period following the international financial crisis. While other regions of the UK suffered steeper price drops and took longer to see the housing market stir back to life, between 2012 and 2017 property in London recorded average gains of 61% – capital value growth of over 10% a year before rental income was taken into the equation.

It is probably fair to say that, given a straight choice, the average Brit has more faith in investment properties than investments in the stock exchange. The phrase ‘safe as houses’, has not made its way into our everyday vocabulary without a deeply ingrained cultural belief in the security of property as an asset class.

For anyone on the lookout for higher end investment properties, the Financial Times today suggests there is currently a sale on in exclusive London postcodes. Over the course of 2017, properties advertised for sale in the most upmarket neighbourhoods of London went for an average of 10% under their asking price. The gap is currently wider than it was even during the immediate aftermath of the financial crisis in 2008 and 2009.