The real estate market in the UK “buy to let” there are structural changes

According to new research, the complex tax reforms and tight control for homeowners of property in the UK leads to a slowdown in private sector rent despite the fact that the volume of the market of private residential property in the UK reached their maximum values – £1.4 trillion and grew by 6.4% over the last year. However, the main reason for the increase in market capitalization is the increase in prices in the housing market, and an increase in the number of homeowners.

Approximately 5.6 million homeowners now in the UK and it is only 2.2% more than the year before. From these figures it is clear that the pace of growth in the number of homeowners in three times less than the rate of price growth, reflecting the fragile confidence of landlords. Only 41% of landlords expressed confidence in the safety of your investment.

A weak recovery of the mood of the homeowners was in the 3rd quarter of 2017 following record-low numbers in the 2nd quarter of 2017. The deterioration in investor sentiment reflects the tax reform, which increased the tax burden on investors and the tightening of rules on mortgage lending.

Deteriorating demand from tenants. Only 5% of homeowners said the growth of demand, this is the worst performance over the past five years.

Now the average rent in the UK – £895 pounds per month.

It would seem, reached a new height, however, annual rent growth of 1.5% is a fairly weak indicator, even when compared to the previous year, when rents rose by 2.4% for the year. The rate of growth in rents in London are significantly behind in growth across the country.

About one third of the landlord believes rents will rise in the next six months. However, the vast majority of landlords said that it will include rising costs, including increasing the tax burden on tenants.

Increased market share of large investors. For example, all investors who own 10 or more facilities, has increased its portfolio to at least one object. And among those homeowners who have only one object, and which account for 62% of the market, absent the growth portfolios.

A purchase, making a property to LLC (limited liability company). According to three quarters of 2017, seven out of ten purchase requisitions received from the companies, it is much more than 45% in 2016. In General, the market “buy to let” there has been a shift to a more professional field, where fans will gradually leave the market, not maintaining strict regulation and giving way to institutional investors with experience and knowledge.

® Alice Morgan. 11.12.2017 G.

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