The UK Housing Crisis and the Conundrum for First-time Buyers

The UK housing market has seen its fortunes upended over the past few months. A number of worrying factors are to blame for this. While the blame on Brexit and the ensuing political nightmare hovering over the country cannot be termed as misplaced, new government policies seem to be causing problems of their own.

Government clampdown on landlords

First, it was the 3% Stamp Duty Land Tax (SDLT) surcharge on landlords looking to purchase additional properties in April 2016 which was introduced to put a check on serial buy-to-let investors.

Then came the taxation reform for buy-to-let that shook landlords further. This reform meant that landlords will be forbidden to offset all the interest of their mortgage against income from rents prior to calculating the tax due.

The new rule took effect in April 2017, and is expected to phase in between now and 2020, where a 20% tax credit will be set. From the April 2017 kick-off, landlords are allowed to only offset 75% of their mortgage interest against their rental income. In 2018, it will be reduced to 50%, then in 2019 to 25%, and zero in 2020.

This will ultimately lead to increased tax bills, whether an investor’s income increases or not. This has seen many landlords serve their tenants notices and sell off their properties.

Thirdly, a new buy-to-let lending rule came about in September 2017 for landlords looking to get mortgages for additional properties. The new rule empowers mortgage lenders to thoroughly review a landlord’s existing portfolio and business plan to assess their viability. This means that one or two unprofitable properties in a landlord’s portfolio can decrease their chances of getting a mortgage loan.

Investors, as a result, are finding it hard to place a finger on the best property investment in the UK. Many are retracing their steps, and others are halting their plans on sowing in the property market. Old landlords are leaving the market, and new ones are skeptical about joining.

These and other factors have led to a crisis in the British housing market. Home ownership is decreasing, prices are slumping and investment growth is slow.

The prospect for first-time buyers

In a bid to encourage first-time buyers to invest in property, the government introduced a new tax system which will see stamp duties for properties up-to £300,000 removed – for only first-time buyers. This reform will see four out of five first-time buyers save as much as £5,000.

Also, people spending more than £300,000 and up to £500,000 on properties for the first time will also enjoy from this move. The first £300,000 of the purchase price will not be taxed.

However, the office for budget responsibility (OBR) has stated that the favour for first time buyers may likely see house prices rise by 0.3%, with most of the raise coming in by 2018.

What this would mean is that the main gainers from this move will, ironically, be current property owners, and not the first-time buyers themselves.

Conclusion

While first-time buyers are being given the opportunity to borrow a little more, and purchase the property they would have normally not been able to, they would still be buying for hefty prices. This is incomplete/unsatisfactory conclusion, there should be a solution, such as the government’s rent-to-buy scheme.

Investment in property comes with risks as well as the possibility of rewards.

For more information visit here https://crowdlords.com/full-risk-disclosure

How to Leverage Crowdfunding to Profit from the Lucrative UK Property Market

The idea of investing in commercial real estate conjures up images of six-figure profits, searching for investment partners, and dealing with business tenants. In reality, buying commercial property can yield a passive flow of income for you and doesn’t always require that you have so much capital of your own.

With opportunities in property markets such as in the UK looking up, it is wise to seize the momentum and create a stream of passive income. The good news is that you no longer have to think of relatively small investment as new and creative funding patterns are springing up.

Crowdfunding has been one of the most popular of these new real estate investments standards since the past decade; plus it’s surprisingly simple and potentially profitable. It involves raising the capital needed for a commercial property funding by pitching directly to a group of wide and diverse investors.

According to statistics, this property funding method accounted for over £25 billion in real estate transactions globally in 2015.

Location is still king

If you have ever read or done anything in real estate, you’ll know that location is the most important factor that ultimately decides your success; not price. You must have heard the often used phrase: “location, location, location.”

Is the emphasis any less today? No. Location is still prime in real estate, and particularly so if you’ve ever considered investing in commercial property. Generally, the value of property varies greatly depending on its location.

Besides ease of access, a good property location attracts higher rent and higher resale value. Property prices gains in value as the location gets better. This, however, does not meanthat when investing in commercial property, you should only buy in locations that are absolutely the best, even if the property is the most expensive.

The reality is that without a good location, all the promising stats will quickly become irrelevant and the property will dip in value, regardless of the size, quality and initial buying price.

There are a lot of important factors that should sway your commercial real estate investment decisions, and price and location must always come tops. In fact, they go hand in hand. Price is vital, but location is more important.

For example, as the UK real estate sector (and especially the London market) continues to show potentials, just as forecasted by property experts, it’s a good idea to join the ladder now using some smart investment options such as a property crowdfunding and investment in London.

Current data from the Office for National Statistics (ONS) shows prices in the UK market are dipping; and combined with shortages of homes, medium and long term investors are projected to gain better return on investment.

A nice location for your commercial property investment, like London, will trigger greater demand and better chances of a profitable selling price.

Investment in property comes with risks as well as the possibility of rewards.

For more information visit here https://crowdlords.com/full-risk-disclosure