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Em Morley

Why Buy to Let Landlords Should be Using a Mortgage Broker – Now More than Ever

Published On: June 18, 2019 at 9:06 am

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Categories: Finance News

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With huge swathes of new legislation and changes to the tax system being introduced, the business of letting property is becoming more costly.

Landlords concerned about their bottom line are being urged to use specialist buy-to-let mortgage brokers to make savings whilst complying with new rules.

Andrew Turner, Chief Executive at Commercial Trust Ltd says: “Renting property is a business, so like any other, landlords want to operate at a profit.

“The changes that have taken place mean that research and meticulous planning are essential to doing so.”

Specialist mortgage brokers have access to a wide range of potentially much lower rates than the average landlord could get their hands on.

According to mortgage sourcing platform Twenty7Tec: “Brokers have access to 12,000 products across the whole mortgage spectrum, while just 2,000 are available directly from lenders.”

This wide range of products reflects an overall upward trend in the number of buy-to-let mortgages available since the 2007 financial crisis. There are currently 2396 available according to a recent Moneyfacts report a 12-year high, boding well for landlords looking for a competitive rate.

A new buy-to-let mortgage doesn’t have to be limited to new landlords either. Legal and General estimate that 69% of homeowners haven’t remortgaged in the last five years, believing that they are on a good enough deal already. Brokers can find better deals for existing mortgage holders that will often be more favourable than the initial deal they signed up to.

With their much wider range of providers and access to potential lower rates and better deals brokers are a legitimate means of making huge savings. Combined with the amount of time a broker could save their client by trawling through the thousands of products available, using a broker begins to look like a very sensible option.

Increase in Brits Over 50 Looking to Rent Their Homes

Published On: June 18, 2019 at 8:32 am

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Categories: Tenant News

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Renting has become a popular choice for many across the UK, either due to lifestyle preference or simply because of affordability. 

Now, new information from an analysis of Countrywide branch data has highlighted that there has been a particular increase in the number of renters aged over 50.

The analysis, undertaken by Hamptons International, has found that 15% of rented households in the UK are tenanted by those over 50. This is up from 11% in 2012, which was when the data was first recorded. 

Going into further detail, Hamptons International, which is part of the Countrywide Group, has estimated that 791,580 homes have been rented this year by those over 50. This is a 61% increase on the 2012 figures and 8.2% more than last year.

The results state that this age group will pay £9.2bn in rent this year, which is up from £5.1bn in 2012 and £8.5bn in 2018.

Most of the renters in this age category are in the southeast, making up 19% of the total. The southwest and northwest both contain 16% of the homes let to those over 50.

% of homes rented by over 50s in each region

Region% of homes let by over 50’s
South East19%
South West16%
North West16%
Wales15%
North East15%
West Midlands14%
East Midlands13%
Scotland12%
Yorkshire and the Humber11%
London11%
East of England11%

Source: Hamptons International

Aneisha Beveridge, head of research at Hamptons International, said: “The number of over-50s renting in Great Britain has reached a record high.

“With younger generations much less likely to be home owners, tenants are getting older, and an ever more diverse group of people are calling the rented sector home.

“Rising rents in the South drove rental growth in Great Britain in May. The South West recorded the strongest rental growth, with rents rising 4% year-on-year. Wales and the East were the only regions to record small rent falls.”

From Scam Artists to Family Feuds – ‘Nightmare Tenants Slum Landlords’ on Channel 5

Published On: June 17, 2019 at 8:56 am

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Categories: Landlord News

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‘Nightmare Tenants Slum Landlords’ is back on the television tonight, this time dealing with two very different eviction cases.

One of these cases involves an illegal sub-let by a ‘professional’ scam artists. The other is described as a favour that turned into a family feud. 

We will see how Landlord Action has managed to help young landlord Han Yip, after he discovered that his West London flat was being illegally sub-let to three unknowing students. Despite paying thousands of pounds to live in an exclusive part of London, the person they thought was the legitimate tenant was actually a scam artist.

This was discovered, after the man flaunted his seemingly ‘flashy’ life on Instagram, showing off about his ‘property business empire’. He has in fact spent time in a US prison, on fraud charges.

So, Mr Yip got in touch with Landlord Action, who came to the rescue. Paul Shamplina, founder of Landlord Action, was determined to expose the rogue tenant and reclaim his debts.

Paul comments: “Han Yip was very unlucky. He had done everything correctly, from using a professional letting agent to carrying out thorough referencing. Unfortunately, this particular fraudster had changed the spelling of his name among other tricks to slip through referencing.  

“Illegal sub-letting is becoming something of an epidemic in London and more needs to be done to prevent cases like these.”

The second case required Landlord Action to help with an unusual family disagreement. It was three years ago that Sade Ademoye took pity on her cousin Kirk, after he got divorced. She agreed to temporarily let a room to him in her elderly mother’s home, giving him a cheap rate. However, after her mother passed away, he refused to leave. So, Sade turned to Paul and his team, to help evict her cousin.

In relation to this case, Paul comments: “This tenant took advantage of his cousin’s late Mother and took over the property, even though the agreement was only to rent a room.  He then refused to leave. 

“These stories, and others throughout the series, demonstrate the diversity of cases that we have to deal with at Landlord Action and the reasons landlords look to gain possession.  It is rarely non-fault but often landlords feel powerless and turn to eviction as an absolute last resort.”

‘Nightmare Tenants Slum Landlords’ will be on Channel 5 tonight (Monday 17th June) at 9PM.

UK Finance Mortgage Trends Update: “If Snapping up Properties was an Olympic Sport, First-Time Buyers would be on the Podium”

Published On: June 17, 2019 at 8:20 am

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Categories: Property News

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An update on mortgage trends has been released by UK Finance, showing an increase in first-time buyer and homemover completions.

The report highlights include: 

  • 27,370 new first-time buyer mortgages were completed in April 2019, 7.9% more than the same month in 2018;
  • 25,450 homemover mortgages were completed in April 2019, which was 6.4% more than in the same month in 2018;
  • April 2019 saw 18,920 new remortgages with additional borrowing, 0.3% more than the same month last year;
  • However, buy-to-let home purchase mortgages completed in April 2019 remained the same as this time last year, at 5,100.

The full report can be read here: https://www.ukfinance.org.uk/sites/default/files/uploads/Data%20(XLS%20and%20PDF)/UKF-Mortgage-Trends-Update-for-April-2019.pdf

Keith Haggart, managing director of lifetime mortgage provider Responsible Lending, has shared his thoughts on the latest UK Finance lending trends. He commented: “If snapping up properties was an Olympic sport, first-time buyers would be on the podium, having completed mortgages at an enormous rate in April, compared to the previous month.

“With Brexit delayed, they wasted no time in securing themselves a place on the property ladder for the first time, making use of Government incentives, the lack of stamp duty and low interest rates. 

“The continued increase in house prices across most of the country is not proving to be a deterrent for these buyers, and with the loan size rising by 3% year on year, they are still managing to get themselves a home with an average 78% LTV. 

“They still see property as a solid investment and are lurching for the finish line to get ahead of any political upsets this Autumn could bring as yet another Brexit deadline looms on the horizon.”

Chris Sykes, Mortgage Consultant at Private Finance comments: “First-time buyers are continuing to make the most headway in 2019’s housing market. For the third consecutive month, mortgage approvals among first-time buyers have outperformed the number of home mover approvals, as prospective buyers are capitalising on favourable conditions.

“Higher loan-to-values and loan-to-income multiples are helping to nudge homeownership closer to reality for millions of first-time buyers, enabling them to borrower larger sums while still satisfying strict lending criteria. What’s most encouraging to see is that despite this increase in lending, the financial commitment of a mortgage continues to remain steady thanks to near record low interest rates. Mortgage payments account for less than a fifth (17.2%) of first-time buyers’ monthly income, exactly in line with the same point last year. 

“Competition in the mortgage market remains healthy, with banks eager to support this next generation of homeowners. First-time buyers can benefit from shopping around to secure the most competitive product. While there may be a tempting array of cashback offers and product deals intended to lure in customers, it’s important to consider the total cost of a product over the length of a term. Speaking to an independent mortgage broker can help borrowers look beyond the headline rate or cashback deal, to work out if it truly is the best product for them.”

Paul Stockwell, Chief Commercial Officer of Gatehouse Bank, comments: “An annual increase in two key measures, first-time buyer and homemover mortgages, is good news for the mortgage market. Not only has first-time buyer activity bounced back from the first annual decline since September, but the closely watched behaviour of homemovers appears to have sprung into life.

“Homemovers have surprised, posting annual growth of more than 6% compared with a decline of equal magnitude a month ago. This is hopefully an early hint of what the future holds for the recovery in sales volumes.

“Recent data has continued to paint a picture of a market impacted by low transaction volumes as high prices and low supply have helped to create a toxic mix for those seeking both choice and value. Our housing market needs to see the back of this era to help the market find fair value more easily, and avoid any cliff edges in affordability that can dramatically affect prices.

“An annual drop in the number of remortgage completions is likely a reflection of greater homemover activity, and brings an end to a full year of continued annual growth for remortgaging.”

How Can Estate Agents Expand their Business Post Tenant Fees Ban?

Published On: June 14, 2019 at 9:02 am

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Categories: Lettings News,Tenant Fees Ban

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Since the Tenant Fees Ban, it’s even more important for estate agents to diversify the services offered to clients – both landlords and tenants alike. According to Sava, positioning themselves as ‘residential property experts’ is key to bringing in streams of income other than charging fees to tenants.

Build additional services into their offerings

Becoming the go-to provider of a range of services, such as buying, selling, adapting, improving, managing or surveying/valuing a property could mean that agents are able to offer a 360 service to their clients in the property sector.

Austin Baggett, Managing Director of Sava, says: “Forget ‘Local Property Experts’, it’s time for agents to become ‘Residential Property Experts’ and provide a wide range of professional services to their clients.

“Most sellers are buyers too and may be looking for a survey or valuation. You can also target anyone in a chain with your additional products, knowledge and advice. Agents can thrive by building long-term relationships with their clients and being considered the local community’s property expert of choice.

“By providing valuable advice on anything to do with property, from traditional buying and selling to key structural or building information, agents can create more opportunities for themselves, making the market seem less crowded.”

Improve their expertise and property knowledge

Baggett says, “Having a certificate on the wall or letters after your name can be beneficial, but the real value from taking qualifications comes in knowing what you’re talking about and becoming a real industry expert.”

“Property sales and the moving process can be complex and you’re often dealing with people’s most valuable asset; therefore, consumers need reassurance and advice from someone they can trust.”

By offering services to customers and becoming a ‘one-stop shop’ to customers means you can open up your income streams and generate areas in revenue that you couldn’t before. Investment in training your team and hiring experts to undertake work in new fields can be highly beneficial.

Tim Crowe, owner of Crowes Estate Agents, says: “Being able to offer surveys has created an income stream for our business and when it comes to valuations, having RICS accreditation distinguishes us and can help win instructions.”

Stand out from the crowd

Competition has become increasingly fierce, with traditional agents battling it out against online ones, plus the uncertainty of certain political issues – such as Brexit – meaning there is more agents competing for a smaller range of new business.

Baggett explains: “It’s certainly a challenging market out there due to a range of political, demographic and industry-specific factors, and with more estate agents than ever, there’s less business to go around.”

“It’s so important to differentiate your brand, giving consumers a solid range of reasons why they should work with you and not your competitors. On top of this, providing a comprehensive range of property services is the key to being successful in the current market.”

South East London Boroughs see Biggest Rise in Rents Across the Capital

Published On: June 14, 2019 at 8:10 am

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Categories: Tenant News

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South East London Boroughs see Biggest Rise in Rents Across the Capital
  • The south east of London is one of the areas of London that is going through drastic and fast-paced change at the moment
  • Gentrified areas of Peckham are causing an influx of money
  • Now one of the trendiest areas of the capital, but used to be one of the most ‘unloved’

Average rents for buy-to-let properties in London’s south east boroughs have risen by 5% in the last year, from £1,491 in Q1 2018, to £1,560 in Q1 2019. This is the largest increase in average rents across the capital, shows new research from estate agent ludlowthompson.

The gentrification of certain areas, such as Peckham, are likely to have been a key driver behind the South East’s rent rises.

Average rents for the whole of London rose 3%, from £1,711 to £1,770.

Average rents for buy-to-let properties across Greater London from 2018 to 2019:

1. South East London – £1,491 to £1,560 (+5%)

2. North West London – £1,879 to £1,951 (+4%)

3. London Average – £1,711 to £1,770 (+3%)

4. East London – £1,620 to £1,671 (+3%)

5. West End – £3,584 to £3,678 (+2%)

6. West London – £1,770 to £1,805 (+1%)

7. North London – £1,603 to £1,629 (+1%)

8. South West London – £1,978 to £2,003 (+1%)

9. City – £5,310 to £5,272 (-0.7%)

Stephen Ludlow, Chairman at ludlowthompson, says: “The ‘hipsterfication’ of areas like Peckham has seen the South East become London’s trendiest area.

“New bars, cinemas and other changes mean that Peckham is now a ‘destination’ for people to live. Landlords are likely to continue to see their buy-to-let investments outperform other areas of London as more young money moves into the South East.

“Our study shows that South East London is quickly cementing itself as one of the best places for landlords to invest in across the capital.”