Buy To Let Landlords Should Be Worried If Labour Elected
Housing experts have said that if elected a Labour government could wreak havoc on the buy to let market with new policies aimed at curbing rent increases and a raft of other policies that could cause real problems for Britains growing army of buy to let landlords. It is not a secret that Ed Milliband will be on the side of the UK's growing number of tenants and as well as rent controls could also bring in new taxes aimed at people with more than one home.
Core voters want major housing market reforms to be introduced
This would be very popular amongst his core voters, many of which live in parts of the UK where local people are unable to find a home locally becasue they have been bought up by wealthy buyers from the south-east. Ed Milliband has made no secret of his desire to help families that cannot afford a home and experts believe that as well as trying to build new homes he would also want to make the buy to let market less attractive to investors. Whilst this would stifle investment in the UK property market his argument would be that there would be less pressure on housing and more available homes.
Experts are worried that mismanagement of the UK economy by the Labour Party and Ed balls could prove disastrous for buy to let landlords. If interest rates were to go up as a result of Labour's policies many buy to let landlords would struggle to meet mortgage payments which could trigger a wave of panic selling. Of course this is hyperthetical but the Labour Party have proved that they are unable to manage the economy as was proved during the last Labour government. What happened to Mr Brown's prudence?
Labour could cause panic in the housing market with mismanagement
It is probably fair to say that Labour's policies on housing and the housing market will be detrimental to UK landlords and the letting's industry. Ed Milliband has already said that they will look at the tax relief for UK landlords and will also bring in a minimum contract on rental agreements to 3 years. He is also going to abolish fees that letting agents can charge tenants.
Many argue that this will be bad news for the property market as it could have the opposite unintened effect where landlords simply stop buying properties to rent out and therefore reducing the supply of rented accommodation. The private landlord market has been left alone by many governments which has meant it has flourished. Any interference from Ed milliband could backfire.
UK housing market has been transformed since 2008 financial crisis
Since 2008 the UK property market has been transformed by a army of buy to let landlords who have hoovered up many of the new homes that have come up for sale. A buy to let frenzy has gripped the country and first time buyers are in danger of becoming extinct. This has drivn up prices beyond all expectations and continue to rise. Everyone wants to get in on the act. People have short memories and nobody believes that house prices will come down in the short term. Most corrections in markets are unforeseen and a new labour government could just sow the seeds for the next crash in the property market.
You only need to have a look at the recent data released by the Bank of England who have said that buy to let mortgages as a proportion of overall mortgage lending is now higher than it was before the crisis. Pensioners are now trawling the streets with wads of cash desperate to give it to anybody that will sell them a home. Did you know that an estimated one million people now consider themselves amatuer landlords.
Massive returns for buy to let investors over last 18 years
It is as though the masses have given up being ripped off by the stock market and want to invest their money in bricks and morter. Recent analysis shows that returns on buy to let properties compared to other investments have been spectacular outperfoeming gilts, the stock market and cash in deposit accounts. A recent study showed that £1,000 invested in an average buy to let 18 years ago would now be worth £18,000. This is on the basis that a 75% loan to value loan was used and shows an annual return of 16% per annum. Nothing even comes close to this . The stock market which comes closest only provided an annual return of 6.5%