Welcome to our monthly newsletter for property landlords. We hope you find this informative and please contact us to discuss any matters further.
Record cash increase for UK properties
In the past year, the UK saw a record leap in house prices. According to Nationwide Building Society, the price of a typical UK home increased by £29,162 – the largest yearly increase (12.6%) since 1991!
This increased the price of an average home to £260,230 in February.
Demand for homes has caused property values to rise and the number of available properties for sale to decrease, meaning buyers are competing with one another more than ever before.
The rising cost of living is making it more difficult for people to afford their homes, but significant house price increases are continuing despite this. However, the building society is confident that the housing market will slow.
Some experts believe that Covid-19 had an impact on the demand, as many people changed how they lived and worked over the past few years. This led to a “race for space” amongst buyers.
Although this is great news for homeowners and landlords who can increase their rent, it is a hard hit for first time buyers – some of whom just managed to save enough for a deposit, only to be met with a price spike.
Energy prices soaring – What this means for your property business
The government announced that the energy price cap will increase by 54% in April. This means that energy bills will increase by £693 per year for an average household.
The price cap introduced by Ofgem is part of its strategy for ensuring fair competition between providers and reducing the impact of rising wholesale prices on consumers. With the cost cap, suppliers are limited in how much of this cost they can pass along to their customers.
As a property business owner, this may affect you in a variety of ways. With the cost of living already increased from last year, the impact of rising energy bills could potentially mean that your tenants could fall into rent arrears. In this case, you should discuss a payment plan with your tenants to tide them over until the summer when they use less energy. For HMOs or in tenancies that include bills, we suggest planning ahead to ensure that the rental amounts take into account the higher energy costs.
The government has been discussing ways to help tenants and businesses with the increases. We will keep you posted with any developments.
The UK to seize Russian oligarch properties
As you have probably heard on the news, Russian oligarchs are being personally sanctioned by the UK Government in response to the war in Ukraine.
They are targeting rich individuals who have either been involved in “destabilising Ukraine” or “obtaining a benefit from or supporting the government of Russia”. Amongst those sanctioned is the owner of Chelsea FC, Roman Abramovich.
Michael Gove, the Secretary of State for Housing, recently announced that he is drawing up plans for UK properties seized from Putin-linked oligarchs.
Although there have been hints that properties seized could be used to house Ukrainian refugees fleeing from war, it is more likely that these assets will end up being sold with the proceeds going towards other housing solutions.
At the moment, the government can freeze assets of sanctioned individuals, but can’t seize them without a transaction taking place.
Legislation is likely to be required in order to bypass a transaction, but lawyers have expressed concerns about the legality of such takeovers due to the property laws in the UK.
No concrete decisions have been announced yet, but as soon as they are, they’re likely to be fast-tracked. Depending on if the situation in Ukraine continues to escalate, more sanctions are likely to come.
We’ve got some exciting news – Hammock is now a sponsor of 2020!
Hammock is an all-in-one property finance platform. It helps landlords keep track of their business properties by tracking rent payments and tenancies and automating their bookkeeping and tax statements.
Hammock can also keep track of your buy-to-let investments with a unique dashboard and real-time metrics. Hammock’s calculator is specifically designed for property businesses and can calculate your profit and loss, loan to value ratio, rental yields, and occupancy rates.
Hammock not only offers a seamless web experience but also offers a useful mobile app. You can opt to receive push notifications for deadlines for rent payments, Corporation Tax, gas certificate renewals and much more.
Hammock is also useful for accountants, as it is a fully MTD compliant software and automates all of the bookkeeping.
If you’d like to give it a try, please email us at firstname.lastname@example.org and we’ll put you in touch!