68 1GM Saturday November 14 2020 | the timesMoney
T
he buy-to-let story is a tale of
two halves right now. Some
landlords, particularly in
London, are having a tough
time and selling up while
others are planning to increase their
portfolios before March 31 when the
chancellor’s stamp duty holiday ends.
We look at the winners and losers.The sellers
About 30 per cent of landlords across
the country are planning to sell proper-
ties over the next 12 months, according
to the National Residential Landlords
Association (NRLA), which represents
85,000 landlords.
The same proportion of landlordshave experienced a drop in rental yields
and nearly half have had problems with
tenants not paying, according to the
rental platform accommodation.co.uk.
Some are taking the stamp duty
holiday, which has removed tax from
the purchase of all properties worth up
to £500,000, as an opportunity to sell.
Landlords in London are having theF
amilies of elderly relatives who
need round-the-clock care are
having to make multiple appeals
to force the NHS to repay costs. The
claims process is so slow, money is often
refunded to families years after a loved
one has died.
Richard Halloway won £170,000
in compensation after an eight-
year battle with his local clinical
commissioning group (CCG) over
nursing home fees for his father, Eric,
who had dementia. In 2004 Eric, an
engineer, moved into a home and sold
his three-bedroom home in Deal, Kent,
to pay the £2,000-a-month fees. By the
time he died in 2009 he had used al-
most all of his savings.
Not until after Eric’s death did
Richard discover that his father had
been eligible for NHS continuing
healthcare funding, which pays for the
medical care of adults who have long-
term and complex healthcare needs.
After two appeals, Eric’s case went toan independent review panel in
January, which decided that Richard
and his family were eligible for a full
refund of all care fees, plus interest,
amounting to £170,000.
Richard, 51, said: “My dad worked
very hard throughout his life. He saved
and invested and did the right thing.
I don’t feel like we have won anything
because my father shouldn’t have had
to pay in the first place. The system
relies on people not challenging it.”
Those seeking funding must be
assessed by healthcare professionals,
who look at issues such as mobility, cog-
nition and breathing. Critics say that
people are wrongly assessed and that
the wording used in the grading system
can make it easy to downplay symp-
toms, which in turn can lead to an appli-
cation being refused. This is common
for people with conditions that are less
physically visible, such as Alzheimer’s.
The Parliamentary and Health
Service Ombudsman found failings instill high demand in some cities, which
in turn has propped up rents. The
biggest rise, 3.5 per cent, has been in
Newcastle upon Tyne, while Bristol is
close behind on 3.1 per cent.
In many university cities there has
not been the mass exodus of students
that some expected.
Gráinne Gilmore, head of research at
Zoopla, said: “The split in the rental
market caused by Covid-19 has crystal-
lised and the two-speed market —
London versus the rest of the countrySell up or reduce your rents:
Almost one-third of landlords are planning to sell up as yields fall and
changing work habits force people out of cities, reports Katherine Denham
toughest time. Their yield is about 2 per
cent on average, which does not leave a
lot of wriggle room.
As potential tenants have moved out
of the capital since the start of the
pandemic, rents have fallen 5.2 per cent
to an average of £1,596 a month over the
past year, according to the property
portal Zoopla, and it takes an average of
three weeks to find new tenants, longer
than anywhere else in the country.
Chris Sykes from the broker Private
Finance is based in London. He said:
“I’ve seen more landlords selling up
than buying, although if property
prices do drop, you will definitely get
the investors piling in to get as much
cheap property as possible while they
can.”
Sykes said most of the demand for
mortgages has come from people who
are moving earlier than they originally
planned. They may not have to work
from an office in the same way, they
want more space and they can save on
stamp duty too.
With unemployment at 4.8 per cent
the record surge in redundancies is a
huge threat to landlord earnings if it
means tenants cannot pay their rent.
Some can use savings over the next
month or so, but many who have lost
their job face a struggle long-term.
More than a million people are esti-
mated to have fallen behind on their
rent because of the pandemic, accord-
ing to the charity Citizens Advice —
and the government has continued to
ban evictions. Rental arrears are likely
to increase, and landlords might have
to absorb losses for the time being.
Then there is the removal of mort-
gage interest relief. The tax perk was
reduced over the past three years and
disappeared altogether in April. It had
already spurred many landlords to con-
sider selling their buy-to-let portfolio,
and the pandemic might persuade
them it is the only option.The buyers
One in six landlords plans to buy more
properties over the next 12 months,
according to the NRLA. Investors can
save up to £15,000 per property in
stamp duty until April.
Rents outside London have in-
creased 1.7 per cent for the year to an
average of £744 a month and there isFamilies fight for years
‘Many do not realise that assessments for medical
care can be challenged, writes Katherine Denham
Buy-to-let loans
BEST BUYS - Fixed - 2 Years
Company Rate Max LTV Min Fee
NatWest 1.35% 60% £995
Halifax 1.40% 60% £1,495
BEST BUYS - Fixed - 5 Years
Company Rate Max LTV Min Fee
Halifax 1.70% 60% £1,495
Barclays 1.85% 60% £1,295
Source: Moneyfacts