6. The Emergence of the Company Landlord
Setting up a Limited Company is a fairly simple and Inexpensive procedure. (Can be done online for £20). It has become a more attractive option to avoid the changes to Mortgage Interest Tax Relief. It was previously less attractive due to the restrictive nature of obtaining Finance (see Next Point) and the Potential issues with getting money back out of the Company (if needed). However I'm sure over the next few months we will see a number of creative solutions with firms offering competitive Accounting Solutions for Company Accounts
My I also be as bold to Suggest that groups of Landlords may get together to Form Companies owning their Property, making them Shareholders........
7. Increase in Company & HMO Finance Options
Lenders have a vested interest & a commitment to their shareholders to ensure that they do not lose out as a result of the changes to the BTL market which is expected to see significant numbers of less professional or more highly geared Landlords throwing in the towel (as per George Osborne's ultimate master plan of seeing the private rented sector controlled by a small number of institutions rather than thousands of individuals)
Such institutions will have seen many market changes and will have reacted accordingly to ensure the long term profitabilty of their business, and I see no reason why the changes being implemented in 2016 should be any different
8. Increase in attractiveness of 'Buy to Sell' - FLIP Deals
With increasingly slim pickings from single lets, many small and Individual Property Developers will look at other ways to profit from property. Flipping (buying poor quality or repossessed 'dumps', improving, then selling at a profit) is an established way of making short term profits
It tends to work best in buoyant, rising markets (as those Flipping benefit not only from the increase in value from the work they have done but the natural organic price increase during the time the work is undertaken) . This has always been a popular in the Past in Bedford and this may become increasingly so.
9. Development Projects Will Provide Excellent Opportunities.
Whilst there is concern over the negative impact of the Stamp Duty and Mortgage Tax Relief changes on the BTL market, one positive is that the government has recently extended the permitted development of commercial property into residential use
Whilst quite a specialist field and one requiring more upfront investment than many strategies it should not be discounted as training/knowledge is widely available and finance may also be secured for the right opportunity, through traditional lenders or Joint Venture partnerships
I can see this happening more in Bedford, It has been fairly prevalent already and predict this trend, along with the conversion of disused pubs, to continue throughout 2016 and beyond . We have recently seen a number of Investors from London venturing out of the Capital, seeking opportunities along the various Commuter Corridors, of which Bedford is one.
10. Creative Methods Will Continue , the demand will need to be met.
The Government, bless them, will continue to try and clip the Wings of Entrepreneurs, if it perceives them as making money! It will demand its pound of Flesh to help finance its Budget deficit. The truth is, there is a need or demand from the Market. Granted there are still many people who aspire to owning their own home, but for many who don't want to put down roots, renting gives them the Flexibility that their lives and careers demand. Until such time that the State can fulfill this demand, then the Entrepreneurs amongst us will.
Whatever you may think about the forthcoming 'Landlord Bashing' measures, proactive investors will continue to profit from property through creative methods such as using Lease Options/Exchange With Delayed Completion, Joint Ventures/Private Finance, Bridging Finance etc
Any comments, observations, critique or otherwise can be aimed here:
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