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Editorial:
We continue to live in interesting times as the old Chinese proverb says, as more often than not the daily grind of bad news trumps the good, with stock prices bobbing up and down like a yoyo.
The Office for National Statistics (ONS) tells us that UK consumer price inflation fell in January, but house prices too continued their slide in the last quarter of 2011, according to figures from the Royal Institution of Chartered Surveyors (RICS).
More gloom as Credit rating agency Moody’s threatens Tuesday to downgrade Britain’s Triple A credit rating, which pushes the FTSE lower and, despite the Greek parliament’s agreement Monday on severe austerity measures, Greece continues to cast a shadow and much uncertainty over the Eurozone and the UK.
The economic effects of recent natural disasters are still being felt, with Lloyd’s of London estimating its costs from the severe flooding in Thailand in 2011 at £1.4bn adding to previous losses suffered in the Japanese tsunami.
Despite all this the Council of Mortgage Lenders (CML) latest figures show that properties being bought with buy-to-let mortgages increased by around 84,000 in 2011. During Q4 2011 a total of 34,800 buy-to-let mortgages (including 15,600 remortgages) were advanced – a total of almost £4billion. This adds modestly to the stock or rental property available to let, easing pressure on rents in some high demand areas.
At the height of the property boom in Q3 2007 quarterly mortgage lending was over 93,000 loans, worth £12.7billion, so the buy-to-let market is continuing at subdued levels, but there are clear signs it is continuing its recovery from a low point in 2009. CML figures indicate that buy-to-let accounts for nearly 13% of outstanding mortgages in the UK by value, and that buy-to-let lending now represents approximately 11% of total gross mortgage lending in Q4 2011.
Although mortgage areas in buy-to-let are generally lower than is the case with owner occupier mortgages, repossession rates are higher. This is due to the fact that the lenders exercise more forbearance with owners than they do with landlords, but they stress that a tenant’s rights are unchanged even if the landlord defaults.
CML claim that buy-to-let is performing an important role in the housing market, providing good quality accommodation, flexibility and mobility for those that need it, and does not crowd out first-time buyers.
For those interested in saving money on tax, Carl Bayley’s new TaxCafe 2012 book on Capital Allowances should prove very useful – see: www.taxcafe.co.uk/capitalallowances.html
Coming up soon the first in the 2012 season’s property shows – the Landlord & Letting Show – at its new venue – the Barbican, London, will be well worth a visit if you can make it on the 13th or 14th of March
Tom Entwistle, Editor – February 2012
e-mail your comments to: editor@landlordzone.co.uk
Tom Entwistle, February 2012
This issue is sponsored by: Cover4LetProperty
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