Will UK House Prices Fall In 2016?
January 28, 2016
I’ve been planning for 2016 and trying to forecast what will happen to interest rates and house prices. 2015 was an extraordinary year for the private rented sector. According to NLA research landlord confidence in the future of their business has fallen to the same low point it hit in the credit crunch. George Osborne’s surprise colonisation of government housing policy resulted in the reduction of mortgage interest relief, abolition of the 10% wear and tear allowance on furnished properties and increased taxes on dividends. The cherry on the cake in the Autumn […]
George Osborne has unveiled another punishing tax increase for landlords in his Autumn spending review. Purchases of second homes or properties to let will be subject to a stamp duty surcharge of 3%. A £275,000 property which currently attracts stamp duty of £3,750 will now cost £12,000 in tax, according to the National Landlords Association. Inevitably this measure will hit London landlords particularly hard where the average house price is £459,906 and 3% of that is an extra £13,797. This increase is grossly unfair, landlords […]
The chancellor pulled a number of rabbits out of the hat in his Summer 2015 budget statement. Although many column inches had been dedicated to the loss of buy to let tax ‘perks,’ the landlord community was not expecting the measure to actually materialise. Until April 2017, landlords will be able to set all mortgage finance costs against rental income, but thereafter relief will only be applicable at the basic tax rate, albeit phased in over 4 years. The big questions are who will this […]
In its latest Financial Stability report the Bank of England commented that buy to let could pose a risk to financial instability, especially if interest rates rise. The theory is that this could cause landlords to fall into negative cashflow, where their rental payments no longer cover the cost of the mortgage payment. This could force them to sell in a hurry, potentially destabilising the housing market.
It is busy on the landlord meetings circuit in London at the moment, I’ve been doing the rounds across the East London boroughs I look after for the NLA. Two weeks ago, I was at a very positive meeting in Hackney where cabinet member for housing, Cllr Phillip Glanville attended the whole meeting. He is sensible and approachable and in our obligatory licensing chat, he assured me it was an option, no definitive decision had been taken and we should meet to discuss further.