Belvoir Property Clinic - New Buy-to-Let Tax Rules

Greg Greatbatch, Director at Belvoir Andover and Professional Landlord answers today’s property question

If you have a question for our monthly Belvoir Property Clinic, please send to info@belvoirandover.com

Q Can you explain the tax changes that have been introduced for buy-to-let landlords as I am about to file my tax return

A This is a question we have been asked a lot at Belvoir, and it’s not an altogether simple one to answer.

The tax changes only apply to individual landlords who let property in the UK, those who let in a partnership or Trustees of a trust directly holding UK residential property. The new tax rules won’t apply to companies or landlords of furnished holiday lets.

In short, the main change being made under the new tax rules, is that landlords will no longer be able to fully claim tax relief on their mortgage interest payments and related finance costs.

Previously, landlords have been able to deduct a number of allowable expenses along with mortgage and other finance expenses from their rental income and just pay tax on the difference. Now however, tax relief on finance costs will be restricted to the basic rate of Income Tax with the restrictions being phased in gradually from 6 April 2017 until fully in place from 6 April 2020.

You’ll still be able to deduct some of your finance costs when you work out your taxable property profits during the transitional period. These deductions will be gradually withdrawn and replaced with a basic rate relief tax reduction.

Tax year	Percentage of finance costs deductible from rental income	Percentage of basic rate tax reduction
2017/18	75%	25%
2018/19	50%	50%
2019/20	25%	75%
2020/21	0%	100%

I would advise you to take some professional advice regarding how this will affect you based on your particular personal circumstances. There is also more information on the full impact of the changes and case studies published by HMRC which can be accessed on www.gov.uk

Looking after our Landlords with Rent Guarantee Scheme

We are delighted to now be able to offer our Rent Guarantee to all our Landlords. Paid monthly, this unique Guarantee offers complete peace of mind should your tenant default on rent payments.

In the event that a tenant defaults, rent will continue to be paid under the Guarantee whilst the property is occupied and you, the Landlord, will not be out of pocket. In addition, Belvoir will handle the legal process with specialist solicitors to ensure that the tenant is removed from the property. There is no claim process involved and you will not be required to attend at court or instruct solicitors, this is all handled as part of the service.

Without our Rent Guarantee, eviction of tenants for non-payment can be a very expensive and time-consuming process. With it taking typically 6-8 months to gain vacant possession, the cost to a Landlord can be astronomical.

Get in touch and sign up now for the Belvoir Rent Guarantee. At only £24 per month (including VAT), we are recommending that all our Landlords take advantage of this comprehensive protection. 

LOCATION, LOCATION, LOCATION…

LOCATION, LOCATION, LOCATION…

Three small words that can transform your property

investment decision, says Belvoir.  

As a new landlord or investor in the buy to let market, what would be your first priority – the type and purchase cost of the property, or the place in which it is situated?

There is no single, definitive answer to this commonly considered question, but in property circles the phrase ‘location, location, location’ is often referred to as the first three rules of property investment.

It’s the same for tenants too. Delia Thing who heads up the lettings team at the Belvoir Andover office on Bridge Street, says:  “When looking for the ideal place to invest in or to rent, it is worth remembering the adage ‘you can change the house, but you cannot change its location’.

“To find a property that will appeal to a tenant and provide a good level of rental income and/or capital growth it is extremely important to firstly define that appeal. There are many considerations to take into account and a good place to start is to look for towns, areas or streets that are currently in demand, and are likely to be increasingly popular in the future.

“Location is always a key driver, with proximity to work, schools, commuter routes, shops and public services amongst the many factors to be taken into account when choosing to market a property as a buy to let.

“In today’s market, there is an ever accelerating need for private rented property, with tenant demand often outstripping supply. To be absolutely sure as to whether a property would make a good rental investment it is worth consulting a lettings specialist such as Belvoir.

“Expert agents can identify local trends and spotlight properties that are the most popular for the type of tenant looking to rent and the best areas in which to find them.

They will know where property ‘hotspots’ are and which parts of a city or town are driving the market.”

Many buy to let investors choose to stay local in order to ‘keep an eye’ on their investment. It’s a strategy that works for thousands across the country, but there is no reason why a buy to let investment cannot work just as successfully hundreds of miles away - provided you make the right choice of professional lettings agent who can manage, maintain and keep a check on the property on your behalf.

“Within the Belvoir national network of over 160 offices there is a high proportion of landlords who own just one or two buy to let property investments, and many of these are in a different part of the country to where they are based.

“In cases like this an agent will have all the right up to date local knowledge and know properties and locations with the highest tenant demand. They will be able to advise on current, achievable rental levels and help avoid the pitfalls of investing in the wrong areas.”

Belvoir’s Andover’s advice for helping to decide the best location for a property investment include:

·        Only decide on where you want to invest after thorough research.

·      Do not make a decision based on the look of the property alone. Just because it appeals to you, it will not necessarily be a good rental investment.

·   Providing tenants with a quality, well maintained property for them to call home carries responsibilities. Only work with a local agent that you have checked out, trust and who has gained all the relevant professional industry accreditations.

·    Remember that big is not always best. A one or two bedroom unfurnished apartment can often yield a better return than larger, four bedroom furnished houses. It’s all down to location and the type of tenant you are targeting.

·        Overly high ‘yields’ – or returns on an investment - can sometimes indicate hidden issues and may not necessarily lead to a good investment.

·       Beware of “buying cheap and paying dear”.  If a property is located in a low quality area it can increasingly become run down – attracting the wrong type of tenant and achieving poor long term capital growth.

“Whilst there are many other things to consider when entering the buy to let market, ‘location, location, location’ must always be uppermost in the mind of a landlord investor,” adds Dee.

“Sometimes the difference between a good rental property and a not so good one can be down to which side of the street it is on, let alone its geographical location.

“If you want to avoid costly mistakes early on in the process, invest in good local, experienced advice. Initial consultations with our office are both free and carry no obligation to proceed.

“At Belvoir we can help to source suitable properties and steer people away from opportunities that, at first, may appear good on paper but may not prove to be the best decision over the longer term.”

If you are looking to invest in the buy to let market, please contact us to arrange an informal chat about your options, what is available and what to look for. Please call Delia Thing on 01264 366611

Belvoir Andover are the towns leading buy to let & investment specialist who have been the industry leader since 1997.

Energy Performance Certificates - Updated Law

EPC Certificates (England & Wales)

It has become apparent that a change in law is forthcoming with regards to Energy Performance Certificates (EPC’s), we have outlined the following advice and action that Landlords will need to know in order to ensure their properties are compliant by the relevant dates.

EPC ratings indicate how energy efficient a property is, giving it a rating from A (very efficient) to G (inefficient). They also demonstrate the environmental impact of a property in terms of carbon emissions and how costly it will be to heat and light, both in monetary and CO terms.

From April 2018, it will be unlawful under the Energy Act 2011, to let a residential property on a New Tenancy Agreement with an EPC rating of F or G – the lowest two categories. This will include a tenancy renewal as this will constitute a new fixed term Tenancy Agreement. Obviously if it continues as periodic with no new Tenancy Agreement the landlord will not need to look at this during that period. This will not apply to any existing lettings until 2023 if there is no change of tenancy.

From April 2016, tenants living in F and G rated homes will be able to request that their landlord takes measures to improve the energy efficiency, with the landlord duty bound to respond within a month with a view to bringing the property up to the minimum E rating.

If Landlords wish to upgrade their properties, the first step is to instruct an approved EPC assessor to survey the property and establish the current rating. If the rating is less than an E, the assessor will be able to give advice on how to improve it. This could be as simple as installing energy saving light bulbs, draught proofing or making more comprehensive improvements, such as replacing an ageing boiler, putting in secondary glazing or upgrading heating controls, and installing systems which are likely to have an impact on improving overall energy efficiency. If the Landlords take action now it will mean they have time on their side to schedule the works and budget costs accordingly, with the ability to spread the outlay over the forthcoming years.

It is worth noting that if the property is 'Listed', then an EPC is not required.

If you would like to check if you have an EPC on your property or want to check the rating, you can do this online by entering the postcode here: ONLINE EPC REGISTER

If you do not yet have a certificate for your property and would like to arrange to have one, please contact ann.osman@belvoirandover.com who will be able to arrange a certificate if needed or discuss the short falls with you. If the property is a 'F' or 'G' then we can formulate an action plan for your property.

If you have a property that is not fully managed by us but need advise on this, please email Ann in the first instance.

Please could you email us in all cases in the first instance to avoid a flood of calls into the office, Please bear with us whilst we answer all enquiries.

Landlords no longer able to offset all their mortgage interest?

It has come to our attention via the HMRC website that the new government will make changes that will come into place in 2017 will effect landlords who have mortgages or finance on their portfolio. The HMRC explain:

Restricting finance cost relief for individual landlords

Who is likely to be affected?

Individuals that receive rental income on residential property in the UK or elsewhere and incur finance costs (such as mortgage interest), excluding where the property meets all the criteria to be a furnished holiday letting.

General description of the measure

This measure will restrict relief for finance costs on residential properties to the basic rate of income tax. This will be introduced gradually from 6 April 2017.
Finance costs includes mortgage interest, interest on loans to buy furnishings and fees incurred when taking out or repaying mortgages or loans. No relief is available for capital repayments of a mortgage or loan.
Landlords will no longer be able to deduct all of their finance costs from their property income to arrive at their property profits. They will instead receive a basic rate reduction from their income tax liability for their finance costs.

Landlords will be able to obtain relief as follows:

• in 2017-18 the deduction from property income (as is currently allowed) will be restricted to 75% of finance costs, with the remaining 25% being available as a basic rate tax reduction.
• in 2018-19, 50% finance costs deduction and 50% given as a basic rate tax reduction.
• in 2019-20, 25% finance costs deduction and 75% given as a basic rate tax reduction.
• from 2020-21 all financing costs incurred by a landlord will be given as a basic rate tax reduction.

Policy objective
To make the tax system fairer, the government will restrict the amount of income tax relief landlords can get on residential property finance costs (such as mortgage interest) to the basic rate of tax. This will ensure that landlords with higher incomes no longer receive the most generous tax treatment. To give landlords time to adjust the Government will introduce this change gradually from April 2017 over 4 years.

Background to the measure
This measure was announced in Summer Budget 2015.

Detailed proposal

Operative date
This measure will have effect for finance costs incurred on or after 6 April 2017.

Current law
Current law on how to calculate the profits of a property business is included in Chapter 3 of Part 3 Income Tax (Trading and Other Income) Act 2005.

Proposed revisions
Legislation will be published in Summer Finance Bill 2015 to restrict deductions from property income for finance costs for residential properties for individuals and to introduce a tax reduction at the basic rate of income tax.
Deductions from property income will be restricted to:

• 75% for 2017-18
• 50% for 2018-19
• 25% for 2019-20
• 0% for 2020-21 and beyond

Individuals will be able to claim a basic rate tax reduction from their income tax liability on the portion of finance costs not deducted in calculating the profit. In practice this tax reduction will be calculated as 20% of the lower of:

• the finance costs not deducted from income in the tax year (25% for 2017-18, 50% for 2018-19, 75% for 2019-20 and 100% thereafter),
• the profits of the property business in the tax year, or,
• the total income (excluding savings income and dividend income) that exceeds the personal allowance and blind person’s allowance in the tax year.

Any excess finance costs may be carried forward to following years if the tax reduction has been limited to 20% of the profits of the property business in the tax year.

Summary of impacts
For detailed information on this, please visit the HMRC website by clicking here

Other impacts
Other impacts have been considered and none have been identified.

Monitoring and evaluation
The measure will be monitored through information collected from tax returns.

If you have a property or a portfolio, please contact us as Andover's leading lettings specialist. Call us to find out what we can do for you on 01264 366611, email: lettings@belvoirandover.com or pop into our office on Bridge Street in Andover.

CHOOSE AN AGENT – OR GO IT ALONE?

It’s an important first decision for all new buy to let landlords    

Public interest in buy to let property investment has never been higher.

Tumbling mortgage rates, a shortage of housing stock, increased tenant demand, all boosted by the recent liberation of some people’s pensions savings, are continuing to tempt more and more investors into the sector as a way of protecting their financial future.

According to the Council of Mortgage Lenders, private residential buy to let mortgage funding has increased by 11 per cent year on year with nearly 16,000 loans, representing £2.2 billion, issued at the start of 2015.

However, Belvoir, one of the UK’s largest property letting and management specialists, says that new landlords should take a long look before they leap into this booming market – and fully consider the pro’s and cons of either ‘going it alone’, or employing an agent to advise on what can be a daunting process for novice investors.

Phil Pinkney, Director of Belvoir Andover which is part of a national network of over 160 offices, says: “Deciding to manage a property yourself or paying for an agent to do it on your behalf is a big decision.

“Even after taking all the essential first steps, such as researching the local market, identifying the right kind of property, checking its condition, its likely appeal to a particular tenant group and its potential yield or ‘return’ on investment, there is still a lot to consider.

“Landlords need to carefully assess their available time, skills and abilities, so as to ensure the safeguarding of a property and the people who will live in it, and importantly, make the whole process as stress free as possible.”

“Renting out a property for the first time can feel daunting because of the amount of legislation, health and safety considerations and overall commitment to the on-going maintenance and security of your investment.

“Professional agents, recognised and accredited by the UK’s industry bodies, not only have in place a wide range of client protection mechanisms, but a thorough understanding of your local market, technical knowledge of the sector and up to date information on trends and statistics to help you make informed decisions”.

“Fees charged reflect the depth of knowledge, expertise and up to date training required to keep on top of a constantly changing property landscape. When considering the cost of employing an agent you should always be aware of the cost of NOT employing one should things start to go wrong.”

Belvoir says there are three principal points to consider:

• Being a ‘do-it -yourself’ landlord means having the time and patience needed to care for your property and its tenants. Would you be able to deal with any issue at a moment’s notice, to the satisfaction of all concerned?

• Do you have the manual and organisational skills to maintain the property to the required standard, or would you need to employ someone to do this for you?

• Are you confident about handling all the legalities?  Changes to Landlord and Tenant law are frequent and often complicated. Again, this demands time, research, a thorough understanding and great attention to detail.

• All well-established, reputable agents will offer a range of services to suit the particular circumstances of a landlord client. Landlords may require all of them or just specific ones, following a detailed assessment of the need.

• They can help find, and then screen and reference, suitable tenants. This is an important first step and is often overlooked by ‘DIY’ landlords.

• A thorough knowledge of local property prices, achievable rent levels and investment ‘yields’ will help new landlords to set a realistic, fair and competitive rent for their property.

• An agent’s full inventory check at the start of a tenancy provides a valuable record of the property’s internal ‘assets’ – appliances, furnishings etc. – that can be checked against when the tenant leaves.

• In addition to the legal ‘basics’ of understanding tenancy agreements and deposit legislation, professional agents such as Belvoir are required to have comprehensive, up to date knowledge of rules on gas and electrical safety, energy performance ratings, fire regulations, legal furnishing standards and landlord/tenant insurance matters – to name just a few.

• If property maintenance forms part of your management agreement, an agent will provide round the clock protection in the event of a burst pipe, broken appliance, weather damage or any other problem. They will provide a professional assessment of the cause and or liability for repair and fix the problem on your behalf.

• All landlords have a legal obligation under the Landlord and Tenant Act 1985 to ensure that their property is safe and that repairs are carried out to the correct standard, so quality of workmanship is essential. A professional agent will ensure compliance with these regulations.

• If problems arise during a tenancy – for example slow or non payment of rent – the agent will pursue this on a landlord’s behalf and take any appropriate steps to manage the issue.

                 Established for 20 years and multi-times winner of the UK property industry’s top awards, Belvoir offers the following advice on the advantages of using a letting agent to guide you through the lettings process:  

“When a considerable amount of your own money is put into a buy to let investment, it is critical to understand the advantages, the restrictions and indeed some of the pitfalls involved”.

“It is inevitable that many new landlords’ circumstances and expectations can vary, so we provide an initial free, no obligation meeting to fully explain how we can make the  management of your property work, not just for you, but for anyone who chooses to call it their home.”

“Above all, a successful landlord/agency relationship is built on trust, transparency and recognised high standards of professionalism and respect for landlord and tenant clients alike.”

Belvoir is a founder member of the ‘SAFE AGENT’ Kite mark scheme, supported by the independent National Approved Letting Scheme (NALS). This promotes client money protection and provides consumers with a clear message on those agents with whom they should do business.

The company also follows The Property Ombudsman Code of Practice for Letting Agents. Belvoir Andover, established in 1997

If you are interested in entering the residential buy to let market, why not give Phil a call on 01264 366611 or email phil.pinkney@belvoirandover.com.

RESIDENTIAL RENT INCREASES COULD SLOW FOR TENANTS IN 2015

Market conditions point to static or low residential rental increases says Belvoir

The UK’s residential buy to let property sector is set for continued growth in 2015 with tenants, in particular, feeling the most benefit from prospective changes in the market. 

National residential lettings specialist, Belvoir, says that current economic conditions, combined with likely interest rate increases in 2015 and the uncertainty of Government policies following the General Election could result in either static or low rental increases next year.

Phil Pinkney, who co owns the Belvoir office on Bridge Street in Andover, says: ”Our past predictions for continued and sustained growth in the buy to let sector have been borne out by shifting market forces and we believe that the number of people choosing to rent – either for lifestyle or economic reasons – will continue to drive up demand for some time to come.”

He adds: “In 2015 we believe that rent rises are likely to be restricted by factors such as continued low disposable income amongst consumers, an anticipated interest rate hike towards the end of next year and a lower than expected forecast for economic development.”

Recent research suggests that rents will rise by an average 1.8 per cent over 2015 which is below the Bank of England’s target inflation rate of 2 per cent.

Belvoir’s independently commissioned Rental Index Report, which for the past seven years has tracked the ups and downs of the UK’s buy to let market, reveals that most of the company’s 160 offices nationwide witnessed little or no growth in rent levels throughout  the current year, albeit there have been falls and rises during this time.

“For the year ahead, we believe it unlikely that changes to rents will vary much more than 2014 versus 2013,” says Phil.

Analysis of regional rents in the Report revealed patchy variations across the country, with many rents not rising at the same levels as property prices - bringing good news to hard pressed tenants who have not seen a widespread increase in wages for some time.

“This has a major impact on rents because if ‘real’ wage levels and spending power do not increase, rents will also struggle to be increased.”

On a brighter note, many landlord investors benefited from a significant recovery in property prices in 2014. London and the South East saw rapid growth, while other areas around the UK achieved increased values of between 5 and 10 per cent.

“But any new investor in buy to let needs to consider all the facts and seek out expert advice and guidance so they can understand all the issues,” adds Phil.

“Each area of the country is different, so people must not assume anything about local property values or market conditions.  Our highly trained staff  have extensive local knowledge and a thorough understanding of how to maximise returns from property investment. If you contact our office we are happy to provide an initial, free consultation.”

Throughout 2014 home ownership continued to fall to its lowest level for a quarter of a century.

Whilst property prices experienced significant growth, greater mortgage restrictions introduced by the Bank of England designed to curb lending, kept many people off the property ladder – further strengthening demand in the private rental sector.   

As for 2015, a number of unknown variables could all have an impact on the market.
Pension reforms - due to come into force in April 2015, policies affecting the buy to let sector introduced as a result of the General Election and the impact of pending interest rates expected in Autumn of next year, will all shape the future of the market, which at present shows no sign of slowing down.

Increasing optimism combined with a recovering property market and current low interest rates will, in the immediate term, continue to make buy to let property investment an attractive proposition – especially for longer term investors.

According to industry estimates, the UK’s cumulative buy to let property portfolio could hit the £1 trillion mark next year. (It currently stands at £931 billion)
Just three months ago (September 2014) the Council of Mortgage Lenders announced a sharp rise in buy to let investment - up 26 per cent over the previous 12 months.
And a recent study claims that over half of residential property landlords in the UK are looking to buy more property in the new year.

All of these findings point towards continuing confidence amongst professional landlords and institutional investors, but the much debated impact of a new breed of ‘buy to let pensioners’ entering the market will only become clear after the new pension rules come into effect. 

“There is a groundswell of opinion that a considerable number of people will access their pension ‘pot’ to seek greater returns on their investments via buy to let – creating a new boom in the sector,” says Phil.

“The market supply of buy to let may be boosted by the impact of this new reform, but we would advise caution because property rental income should not be viewed as a replacement for pension income as the two are completely different. 

“Pension income tends to be low risk and index linked to rise with inflation whilst rental income can be more risky and typically does not grow in line with inflation.
Sourcing a suitable buy to let mortgage as a first-time landlord (especially at a later stage in life) could also prove difficult – even if you have access to a sizeable deposit.”

If you are a looking at becoming a landlord or you would like BELVOIR to help manage your existing portfolio, contact Phil Pinkney on 01264 366611 or by email phil.pinkney@belvoirandover.com

NEW EU RULES COULD AFFECT ‘ACCIDENTAL LANDLORDS’

Criteria tightens on buy to let mortgage lending…

National residential property lettings specialist, Belvoir is urging thousands of British property owners classed as ‘accidental landlords’ to seek specialist buy to let advice from industry experts following a new European ruling on mortgage regulations.

Accidental landlords are typically people who, after a change in their circumstances, struggle to sell their home, so end up renting it out.  Divorce, separation, bereavement or job relocation are some of the reasons why owner occupiers hang on to a property to turn it into a ‘buy to let’ investment. 

Phil Pinkney, who co owns the Belvoir office on Bridge Street in Andover, says: “Currently, in cases such as these, banks will usually allow homeowners to switch a mainstream mortgage over to a landlord loan or alternatively ask them to pay charges to be allowed to retain a residential mortgage and then rent the property.”

“However, the UK Treasury has announced that new EU legislation, the ‘European Mortgage Credit Directive’ which comes into force in March 2016, will introduce partial regulation of Britain’s buy to let market  - which could, potentially, make it more difficult for homeowners to make this simple switch.

 “Unlike mainstream owner occupier mortgages, buy to let lending for professional investment landlords is usually viewed as ‘business’, not ‘consumer’, borrowing.

“But under this new Directive, the Treasury says that landlords who are letting a property  “as a result of circumstances rather than through their own active business decisions” will now be classed as consumer not business borrowers, and will need to be covered by a tighter, regulated framework.”

He goes on to say “As with the introduction of  any new legislation, it is important for landlords to get professional and realistic rental assessments from experts who understand the buy to let market as this will help to ensure that rental returns add up and landlords are able to meet the new lending criteria.

“Whilst the changes will not affect mortgages taken out by regular investment landlords, they could impact on both existing and prospective ‘accidental landlords’ so we would recommend seeking out professional advice in advance of the new rules in 2016 .” 

Commenting on the EU announcement, The Council of Mortgage Lenders has said that many lenders could struggle to distinguish between ‘consumer’ landlords and buy to let professionals.

Last year over 151,000 buy to let mortgages were taken out – representing 12 per cent of total UK lending. Industry experts predict a continuing buoyant market in buy to let, with a projected rise of up to 3 per cent in mortgage activity.

 “If you are already an ‘accidental landlord’ in our area, or could be about to inherit a property that you intend to rent out, it would be beneficial for you to contact us for a free, initial consultation to discuss your aims and objectives, so that we can help you take a long term view of your property investment needs,” adds Phil.

“As one of the UK’s largest and well established property lettings specialists we are able to offer a wide range of advice and services on a regional as well as national level and, importantly, use our local knowledge to help guide you through the opportunities available in our area.”

For more information on letting a property, contact Andover's leading letting agent BELVOIR!

Tel. 01264 366611
Email andover@belvoirandover.com 
Google+ +Belvoir Andover Estate & Lettings Agent . 
www.BelvoirAndover.com

STOP PRESS: The Andover office of BELVOIR! jumps to 2nd in the UK for the first time in March.......

For the month of March, Belvoir in Andover jumped 3 places to a record breaking 2nd place in the entire network across the UK. Office bosses Daniel Tarrant, Phil Pinkney and Greg Greatbatch were on hand to give us their reaction.

‘Belvoir Andover has been in the town now since 1997 and has seen a lot of change over the years both in Andover itself and in the BELVOIR network. The franchise network has grown in this time to over 160 offices with many in city locations such as Liverpool, Sheffield, London and Manchester, so to be 2nd in UK is a massive achievement.’ says Greg Greatbatch

‘This sends a very strong message to landlords of property in the Andover area that they have invested in a property hotspot . It is astonishing what has been achieved by the whole team here in this relatively small market town. We have not seen this level of rental interest since 2006 and many are taking the opportunity to expand their existing portfolio’ says Phil Pinkney

‘I am delighted at the success of our sales operation. Since Belvoir started selling property in July last year, we have sold £millions worth of property. We are achieving more than ‘market value’ in a number of cases and ahead of time compared to the national average of 3 months (offer accepted to completion).’ says Daniel Tarrant

If you are looking to buy to let or expand your portfolio further, please get in touch as soon as possible as now is the time. Property prices (as we have previously reported) are set to continue to rise. This means capital growth for you as well as rental income yields that easily outstrip banks savings and ISA rates.

Call the team on 01264 366611 or email us at andover@belvoirandover.com

Bank of England holds UK interest rates at 0.5%

UK interest rates have been held at the record low of 0.5% for another month by the Bank of England reports the BBC.

The Bank also kept the size of its bond-buying economic stimulus programme unchanged at £375bn.

The news is in line with analysts' expectations, despite recent evidence that the UK economic recovery is strengthening.

Worries about rising house prices in parts of the UK have intensified the debate over when rates might increase.

Continue reading the main storyThe Bank's Monetary Policy Committee (MPC) have kept rates at the historic low of 0.5% for more than five years, amid worries that the finances of many individuals and

businesses remain too weak to withstand a rise.

But the pace of economic recovery is picking up, and last week the Organisation for Economic Co-operation and Development (OECD) raised its UK growth forecast for this year from 2.4% to 3.2%.

The OECD did, however, sound a warning that the housing market could be overheating. It said that the UK government should consider restricting access to the Help to Buy scheme, which provides mortgage guarantees and loans to people struggling to find deposits on homes.

The British Chambers of Commerce said on Thursday that a rate rise soon would be "premature".

BCC chief economist David Kern said: "The decision to maintain interest rates and quantitative easing was unsurprising and appropriate.

"Businesses need clarity that encourages them to increase investment, and at the moment the MPC is delivering this. However its efforts are hampered by repeated calls for interest rate rises whenever a piece of positive news is published.

"Such a move would be premature. The MPC should instead strengthen the clarity of its forward guidance message."

'Blunt instrument'

Many economists have pencilled in a rate rise early next year. The Bank hinted in February that the second quarter of next year was a possible timeframe.

However, Scotiabank economist Alan Clarke said that if wages continue to pick up, then a rise could come before Christmas.

Martin Beck, senior economic adviser to the Ernst & Young ITEM Club, said: "The pound's continued climb and subdued inflation expectations, also, point to benign prospects for inflation in the near-term.

"The Bank is likely to use its macro-prudential tools, possibly as soon as June's meeting of the Financial Policy Committee, before deploying the blunt instrument of an interest rate rise.

"Next week's Inflation Report should provide more enlightenment, pointing, in our expectation, to rates remaining very low for some time yet."