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Em Morley

Landlords to Buy More Properties in Next Six Months

Published On: June 2, 2015 at 2:51 pm

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A report has revealed that two-thirds of landlords are planning to buy at least one more property in the last half of the year.

Landlords to Buy More Properties in Next Six Months

Landlords to Buy More Properties in Next Six Months

Research by buy-to-let mortgage broker Mortgages for Business found that 65% of investors renting out homes intend to expand their portfolios in the next six months, up from 55% at the beginning of the year.

The report also uncovered that only 8% of UK landlords are planning to sell some of their rental properties before the end of 2015 and a further 27% will keep their portfolios at their current size for the near future.

David Whittaker, Managing Director of Mortgages for Business, says: “Landlords are better capitalised and now more confident about reinvesting. A strong rental market is being driven by tenants moving to make the most of job opportunities.

“That new surge of demand is putting more upwards pressure on rents and landlords are only just beginning to supply more homes to let in response.”1 

The study also questioned landlords about the support they receive from mortgage lenders, discovering that just 30% believe lenders do enough to understand the needs of property investors.

Furthermore, 20% said they think mortgage lenders should loan larger amounts and another 20% would like lenders to reduce their rates even further than the current record low.

Mortgages for Business also revealed that 57% of landlords think that lenders should ease the criteria that they measure borrowers against before offering them a loan.

1 http://www.rman.co.uk/latest-news/article/buy-to-let-purchases-to-increase-over-next-six-months

Huge Decrease in House Sales

Published On: June 2, 2015 at 1:53 pm

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Huge Decrease in House Sales

Huge Decrease in House Sales

There has been a huge decrease in the amount of property sales, Land Registry figures have found.

Between November 2014 and February 2015, there was an average of 64,196 transactions per month, down from 73,156 per month for the same period a year earlier.

In February alone, there were 54,103 transactions, a 17% decline on the 64,994 recorded in February 2014. There were decreases in every price bracket.

In London, transactions in February dropped 24% compared with February 2014, down from 9,125 to 6,925. There were declines in all price brackets, with the most significant drops below £250,000.

The average property price in England and Wales hit £179,817 in April, Land Registry also revealed. This was up 0.9% on March and 5.1% annually.

London’s average house price was £474,544, a 2.3% monthly increase and a 10.9% yearly rise.

There was monthly growth in all regions, except the North East (down 0.5%) and Wales (down 1.1%).

Repossessions have continued falling, with drops in all regions. In February, there were 639 repossession sales, down 37% from the 1,016 in February 2014.

 

 

 

 

 

 

Number of Homes Under £250,000 in London Dwindles

Published On: June 2, 2015 at 12:48 pm

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The amount of homes worth £250,000 or less in London has decreased by 14% in a year, according to research by Experian.

Most of these properties are in Newham, Enfield, Croydon, and Barking and Dagenham.

Director of Residential Research at Savills estate agents, Lucian Cook, says just 75 of 627 council wards in the capital have an average house price of £250,000 or less. He says this is a reflection of how increasing prices affect the whole of London.

He adds: “The shrinking market under £250,000 reflects the extent to which prices in London have risen over the past five years and been dislocated from the rest of the UK.”1

Chief Executive of Haart estate agents, Paul Smith, comments: “Not only are homes under £250,000 gold dust to first time buyers in the capital, but investors are also on the hunt for them.

“The strongest yields can be achieved on properties of this value and London is still viewed as the global hotspot for property investment.”

He says that this shortage is forcing first time buyers out of London in search of a family home, as the average age of this type of buyer is 32-years-old.

He continues: “We are now starting to see more first time buyer activity outside the capital than inside. You can get a three-bedroom semi-detached house in Chelmsford for £250,000, but in London, even somewhere outside the centre like Wembley, you’d be lucky to get a two-bedroom flat.

“Young professionals are increasingly doing a balancing act, weighing up their commute against the quality and size of their home – and home is increasingly coming out the winner.”1

Research analyst at Countrywide, David Fell, thinks that the Government’s Stamp Duty reform last year could be behind the shortage of homes under £250,000: “We are now seeing homes that would have come onto the market at £250,000 before the change, marketed at £260,000 or £270,000.”

Similarly to Smith, he is witnessing first time buyers moving further away from central London: “A decade ago, the focus of first time buyers was in places on the Zone 2/3 border, such as Hackney, Deptford and Crystal Palace.

“Today, stretched affordability means new buyers have to look further and further afield to get on the housing ladder. Places like Walthamstow, West Ealing and Croydon are now the starting point of many first time buyers’ home searches.”1

However, the other side of the market, properties priced at £500,000 or more, rose by over 22%.

Associate Director of John D Wood in Weybridge, Vincent Dennington, says: “We have been taking on a lot of property about £500,000 and it has been selling quickly to both owner-occupiers and investors.

“As mortgage rates are low, people are seizing the chance to move up the property ladder while they still can. Many people are concerned they might not be able to afford to upsize their home in the future if prices continue to go up, so they are making the move now.”1

In the South East, research reveals a similar story. The number of homes for sale at less than £250,000 has dropped by 10% and homes at over £500,000 has risen 25%.

1 http://www.homesandproperty.co.uk/property-news/news/hunt-londons-rare-property-gems-under-ps250000

 

New property risk assessment portal launched

Published On: June 2, 2015 at 12:23 pm

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A new property risk evaluation portal has been created by EDM Mortgage Support Services, as part of their ongoing wish to develop a lone digital platform for the mortgage industry.

Control

The portal, named EDM Prism, gives lenders more control over the risk evaluation process. All property risk elements can be completed online using the portal’s secure service and includes lenders, valuers and conveyancers. All parties are able to access shared data relating to the property, which can include manual valuation records and title documentation.

EDM Prism promises to raise efficiency of the risk evaluation process by allowing consumers real-time access to relevant information on the property. This will make it easier to obtain information and subsequently act on material that is stored in the same place. Additionally, this improves security by restricting access to unauthorized people, alongside giving a clear audit trail of previous activity.

New property risk assessment portal launched

New property risk assessment portal launched

Crucial

Joe Pepper, managing director of EDM Mortgage Support Services, commented that, ‘risk analysis is a crucial part of any lenders’ business. However, most of them have yet to take advantage of the latest technology and instead rely on a combination of in-house and third party-processes that are clunky, disjointed and lacking in transparency, making them difficult to manage and audit.’[1]

He described Prism as, ‘an exciting new way to give lenders control of the process. Nothing else like this exists in the market. Using Prism can cut the time taken to process risk evaluation by half and gives lenders a competitive advantage, improving the customer experience and cutting costs. It speeds up the whole property risk element of the mortgage process, conducting it in a more secure way with an audit trail that relevant parties can see.’[1]

 

[1] http://www.mortgagefinancegazette.com/technology/edm-launches-property-risk-evaluation-portal/

 

 

Bridging Lender Moves into Scotland

Published On: June 2, 2015 at 11:56 am

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Bridging Lender Moves into Scotland

Bridging Lender Moves into Scotland

A bridging loans firm has expanded into Scotland and is searching for new underwriters and business development managers to help with its growth.

Hope Capital was launched in 2011, and is a privately operated and funded bridging company, currently run in England and Wales.

It has an initial fund of £10m for Scottish business, which will be “expanded and grown.” Hope Capital will lend on commercial and residential property with non-regulated loans of up to £1.5m for six months or less, with a maximum of 75% loan-to-value (LTV).

In the last year, Hope has more than doubled its loan book and expects to quadruple this again this year. It has also doubled its staff in the past 12 months and is hoping to do so again.

Chief Executive of Hope Capital, Jonathan Sealey, says: “The time is absolutely right for Hope Capital to expand into Scotland. With both the referendum and post election uncertainty out of the way, there is a lot of positive sentiment in Scotland at the moment; the number of property transactions is increasing and house prices are soaring.

“Since we started exploring the opportunity to operate in Scotland earlier in the year, we have already had a number of very interested parties looking to work with us.

“As we do in the rest of England and Wales, we are only looking to lend through the intermediary community; it is advisers that we have our relationships with and we are incredibly loyal to this sector.”1 

1 http://www.ftadviser.com/2015/06/02/mortgages/mortgage-products/bridging-lender-expands-into-scotland-oKD4sLUJkD3mdl038lTBeL/article.html

 

Right to Buy extension slammed

Published On: June 2, 2015 at 11:34 am

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In his address to the House of Lords today, Lord Kerslake is widely expected to show his displeasure towards the extension of the Right to Buy scheme. It was confirmed in last week Queen’s Speech that the scheme is to be extended to 1.3 million housing association tenants.

Nonsensical

One of the UK’s rural housing policy experts also believes that the planned extension of the scheme is largely nonsensical. Additionally, Professor Mark Shucksmith, Director of the Newcastle University Institute for Social Renewal, feels that the plan will be ultimately disastrous for those living in rural areas.

Professor Shucksmith said that, ‘there is already a shortage of affordable housing, especially in rural areas where there is little social housing. Rural house prices are on average 26% higher than in urban areas and the ratio of house prices to local earnings is even worse.’ He went on to say that, ‘disposing of housing association stock, at great cost to the taxpayer, will make the impact on rural communities much more serious.’[1]

Continuing, Shucksmith stated that, ‘we are already seeing those on low and medium incomes and especially young people, priced out of small towns and villages across the UK. With housing association properties sold off and unlikely to be replaced in any substantial quantities, the wealth divide in rural communities will deepen even further.’[1]

Right to Buy extension slammed

Right to Buy extension slammed

Detrimental to local employers

Alongside arguing that the forced sale of housing association properties will affect the demographic make-up of rural communities, Professor Shucksmith also feels that the knock-on effect for employers will also be detrimental. He notes that, ‘in it’s Rural Policy Statement in 2012, the Government recognised the social and economic importance if affordable rural housing. With rural areas becoming increasingly socially exclusive, local businesses-from farms and shops to accountants and software developers-will find it even harder to attract the young, skilled ambitious people they need.’[1]

Concluding, Shucksmith said that, ‘we urgently need more affordable homes to be built, not the disposal of the few that remain in rural areas..’ He feels that the Government should, ‘reconsider the Right to Buy extension and instead implement the recent recommendations made by the Rural Housing Policy Review group, to provide more affordable rural housing.’[1]

[1] http://www.propertyreporter.co.uk/property/will-right-to-buy-housing-policy-be-disastrous-for-rural-communities.html