I AM going to talk about Landlord Insurance and yesterday’s Autumn Statement from Chancellor George Osborne, because I think that is where he is having the most impact.
Don’t get me wrong, his ideas to subsidise new affordable homes are admirable and expensive in equal measure. but while planning laws remain the same, wages remain low due to part time work and zero hours contracts and demand for homes is high thanks to immigration and population increase, his measures are a drop in the ocean. Yes, he’s trying to do something but if he manages even one year of house building hitting 200,000 in total it will be a miracle. And the UK needs a lot more than that to sort out the housing shortage.
And while there is a housing shortage, prices will go up. And while the Government subsidises house purchases with 40% interest free loans, that will be recognised by the market and priced into the asking cost.
And let’s not kid ourselves that an affordable home in London is aspirational in any way. It’s going to be a bedsit or one-bed flat at best, with small square footage. It’s back to serfdom but this time the serfs are being told to buy their own properties because the Housing Associations are broken and social housing is dwindling – and will continue to do so as local Government spending is reduced further.
Either way, there will be plenty of good home insurance options for owners of new houses of any kind. Geta quote here on The Property Insurer and see how much you can save.
But landlords have been hit again with a 3% stamp duty levy on new properties purchased after April 2016. All as a disincentive for them to buy and rent out properties. This will see new landlords going via the commercial or corporate route to get loans and insurance. Especially as the corporate sector can enjoy interest rate as a business expense while private landlords cannot.
The outcome is that many of the UK’s 2-million landlords will probably sell up (due to interest rate tax) and the remainder are unlikely to invest in new property after April 2016 unless the rents really do stack up and they are cash buyers. Many will transfer new property purchases into corporate businesses to avoid the witch hunt on the private landlords.
The private landlord sector will decrease, the corporate landlords will increase, rents will increase to meet the new and additional costs, tenants will ultimately pay the bills and Landlord Insurance will still be available at fantastic prices through The Property Insurer. You see, Landlord Insurance is already a commercial product with high demand and that isn’t going to change.
So while Osborne picks the pockets of landlords and tenants and creates a new housing crisis all on his own, at least landlords can rest assured that excellent, low cost Landlord Insurance will still be available.