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Property in 2019

Your expert guide

Rightmove director Miles Shipside and property expert Jo Eccles reveal property market trends for 2019, from emerging hotspots to buy-to-let rule changes.

  • Property in 2019 – with Miles Shipside and Jo Eccles

    The information contained in this podcast is for general information purposes only and is not intended to constitute financial advice. If you are thinking of making an investment in and/or purchasing property, please seek independent professional advice relevant to your circumstances. Barclays does not accept any liability for any losses as a result of relying on the information contained in this podcast. The views expressed by any third parties featured in this podcast are their views alone and do not necessarily reflect the views of the Barclays and the accuracy of any such information from any third party is not guaranteed by Barclays. All opinions and estimates are given as of the date of recording.

  • 5 buy-to-let rule changes and opportunities

    It’s a complicated time to be a landlord with increasing regulations, tax changes and property price fluctuations – but experts say the UK buy-to-let market still has the potential to offer solid returns for savvy investors. 

    We spoke to Miles Shipside, one of the founding directors from property website Rightmove, and property expert Jo Eccles of SP Property Group to find out the latest changes in the buy-to-let market.

    Here are 5 things to watch in 2019.

    1. Emerging hotspots

    Attractive rental returns and lower house prices have made larger cities in the north increasingly popular for investors, says Rightmove director Miles Shipside. 

    “Northerly regions are more active in buy-to-let. While many investors traditionally stuck to areas such as London, there is a real benefit to looking further afield,” says Miles. “Regional cities such as Leeds, Manchester and Edinburgh – which also see the benefit of lower purchase prices and therefore lower stamp duty costs – are booming in investor popularity. We are seeing signs that one of the next big ones might be Birmingham, as well.”

    In London, there are also solid investment opportunities if you know where to look, says SP Property Group founder and director Jo Eccles. “In London, where house prices have risen a lot in the past, many landlords are looking for capital growth as well as yield. Popular areas over the past 12 months have been West Kilburn – particularly for 2-bedroom investments with many landlords looking to acquire period conversions – and Clerkenwell for 1-bedroom and 2-bedroom flats,” says Jo.

    If you’re looking to invest in a new buy-to-let property, find out more about your exclusive Premier buy-to-let rates here. You can also use our buy-to-let affordability calculator to find out if you’re eligible. And remember, your buy-to-let property may be repossessed or a receiver of rent appointed if you do not keep up payments on your mortgage.

    2. Tenant Fee changes

    The Tenant Fees Bill, which will abolish most upfront charges for tenants, is expected to come into force on 1 June this year. 

    The changes – first announced by Chancellor Philip Hammond in 2016 – include a ban on letting agent fees for tenants, a cap on security deposits and an end to many upfront administrative costs. 

    If you're a landlord, this could increase costs as agents may push up their management fees to cover any lost income. The government is also reviewing the practice of ‘default fees’, where tenants are charged for minor indiscretions on their tenancy agreement. For more details, see the latest government documents relating to the Tenant Fees Bill

    Jo says: “The lettings fee ban is just part of the ever-changing and increasingly regulated landscape which landlords need to make sure they are keeping up with.”

    The Tenant Fees Bill will apply to the private rented sector in England and Wales. Letting fees are already banned in Scotland.

    3. Tax changes

    The amount of buy-to-let mortgage interest that landlords can deduct for tax purposes is tapering off – a change which could hit profits hard, says Jo.

    “This will be the biggest one to factor in when doing your investment sums. Navigating changes like these is particularly important in a softer market.”

    Instead of mortgage interest relief, landlords will be allowed to claim a basic rate (20%) tax relief on the entire interest payment. The change means that some landlords, particularly those in higher tax brackets, could end up paying more tax than under the previous system. The changes have been phased in since April 2017. Find out more here.

    To find out more about buy-to-let tax and fees, take a look at our comprehensive guide.

    4. New HMO rules

    New rules came into force in October to redefine what constitutes a House in Multiple Occupation (HMO) and, crucially, which properties need a licence.

    Under the new rules, mandatory HMO licences apply to any property occupied by five or more people, forming two or more separate households. But a council can also include other types of HMOs for licensing and there are exceptions, so it’s important to check with your council whether your property needs a licence. The regulation change also brings into force new minimum room sizes. 

    If you’re a landlord, experts recommend checking if your property comes under the new regulations – and, if so, applying to your local authority as soon as possible. Find out more about HMO regulations

    5. Energy efficiency standards

    Minimum energy efficiency standards for domestic properties launched in April 2018 – and, from 2020, the rules will also apply to existing tenancies.

    As a landlord, you might have to make improvements to ensure any properties you own meet an energy performance certificate rating of E or above. There are complicated rules and exemptions involved in the scheme, so it’s worth finding out if your property will be affected. Find out more here. 

    “In the current climate, for landlords, it’s about how to really squeeze your rental in order to get the most out of it,” says Jo. “Reinvesting in your property to make sure it meets the standards – and looks better – can go a long way in attracting long-lasting tenants.”

    If you’re looking to borrow to improve your property, consider a Premier Barclayloan.

     

    The information contained in this article is for general information purposes only and is not intended to constitute financial advice. If you're thinking of making an investment in and/or purchasing property, please seek independent professional advice relevant to your circumstances. Barclays does'nt accept any liability for any losses as a result of relying on the information contained in this article. The views expressed by any third parties featured in this article are their views alone and don't necessarily reflect the views of Barclays, and the accuracy of any such information from any third party is not guaranteed by Barclays. All opinions and estimates are given as of the date of publishing.

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