There's no doubt about it, the property market is currently very buoyant and estate agents are reporting a shortage of stock, which means that house prices are on the rise across most parts of the U.K.
However, the sun does not always shine on the U.K.'s housing market and we believe there are three threats in the pipeline that may cause people to wish to dispose of their property assets in 2016.
1. Interest rate rises
The Telegraph recently reported that, due to low interest rates for over 6 years, over 1.85 million people have never experienced an interest rate rise.
Latest predictions suggest that the first rate rise could come in September 2016.
When it does, many people will start to struggle due to their mortgage payments increasing and this may trigger a number of repossessions, which could start to flood the property market.
When the seller/buyer balance turns in favour of the buyer, many sellers have to compromise on the price they achieve for their property, and if it lingers for a long time on the market, a quick house sale to a cash buyer may be the best option.
2. Tax changes for landlords
The government announced in July that it would reduce tax relief on buy-to-let mortgages from 45% to 20% in April 2017 and would change wear and tear tax relief from April 2016 to apply only to exact costs incurred, instead of a standard 10%.
Specialist law firm, Access Legal, questioned 2,000 landlords and 20% of them said that the tax changes would force them to quit being a landlord.
It is estimated that there are 2 million private sector landlords in this country, so, if 20% of them decide to exit from being a landlord, then they will be looking for a quick sale of their rental property, possibly with a tenant in situ or even selling with a sitting tenant.
3. Increasingly onerous legislation for landlords
This year has seen a huge increase in the amount of regulation and red tape that landlords have to comply with.
In the last few months alone, we have seen the implementation of "Right to Rent", where landlords are required to check the immigration status of tenants.
Landlords have to be able to check passports and identity and ensure that documents are not forged. Many landlords are already saying that they should not be expected to pick up the slack where our Border Controls have failed. Fines for housing an illegal immigrant are heavy - up to £5K per tenant and many landlords are reporting that they do not want to have to take on this financial risk.
Additionally, there is new legislation issued about serving a Section 21 notice and also new requirements for smoke alarms and carbon monoxide detectors in rental properties. There are new requirements for Legionnaire's testing and selective licensing is increasing across the U.K., where landlords will be expected to buy a licence.
These are just a few of the issues. More legislation is in the pipeline that will increase landlord's obligations and also reduce the margins of profit in running a BTL business.
This, added to the new tax changes, may well be the final straw for landlords and they may decide to exit.
Eternal reasons for a quick sale
Of course, there are a number of eternal reasons why people wish to sell their property quickly, often at a reduced rate to attract a quick sale.
These reasons include:
- Change in financial circumstances
- The neighbourhood deteriorates (rise in crime rates, for instance).
It is in these instances that a cash buyer is the best option, as a cash buyer can complete quickly and give the vendor a guaranteed date when the money will be in the bank.
As a family-run business, we have over thirty years of combined experience of buying properties for cash quickly and efficiently. We will consider any property in England and Wales in any condition. We regularly buy tenanted properties off landlords, or even whole portfolios. "Problem" properties are not an issue to us - short leases, properties in need of complete refurbishment, probate properties - these are the types of deals we love!
If you wish to sell your property fast, then do not hesitate to contact us. We are waiting to make you a genuine cash offer!
Open Property Group have a mission to raise standards and improve customer experience.
Give us a call on 0800 990 3939 to receive a no-nonsense cash offer for your property or send us an email at email@example.com
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