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Em Morley

UK Property Market Remains Attractive to Wealthy Investors, Despite Brexit

Published On: February 26, 2019 at 10:30 am

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Categories: Property News

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Many wealthy investors who currently own property in the UK market plan to add to their portfolios, despite Brexit, a new study shows.

A survey of national and international high net worth individuals (HNWIs), defined as earning more than £100,000 per year, conducted in the UK, Dubai, Hong Kong and South Africa, found that Brexit is not a big issue for the vast majority of wealthy investors. In fact, almost a quarter (23%) actually identified Brexit as the catalyst for their investment.

To understand the mid to long-term view of UK property investment, Censuswide, on behalf of property developer SevenCapital, asked how strong wealthy investors believe the housing market will be in the next 18 months. It found that more than half (55%) think that the market will be good to very strong, rising to around two in three (64%) in three to five years’ time.

These are encouraging results for the UK property market, during a period of uncertainty and negative speculation over what Brexit will bring.

Andy Foote, the Director of SevenCapital, comments: “These figures demonstrate that people generally recognise that there are bigger factors to consider over Brexit when it comes to the overall trends in the UK property market. Realistically, it’s the fear and the perception of Brexit that will have any effect, rather than the physical act of leaving the EU.

“Ultimately, if the market were to take a dip after Brexit, seasoned investors will know that this would more likely be a catalyst for the inevitable swing back. The property market is a prime example of well-known cyclical patterns, growing through recovery and emerging stronger than previous peaks. In other words, if it takes a dip, as it did ten years ago, it will recover and come back stronger.”

He continues: “It’s also important to understand two other key factors. Firstly, the chronic undersupply means there is an ever-growing demand for homes in the UK – whether rented or owned – and that is not something that is going to change with Brexit.

“Secondly, property isn’t a quick purchase or investment, unless you are a flipper. If you’re looking to buy a home, the chances are you’re not going to be thinking about selling up again in less than five to ten years’ time, and, if you’re a property investor, you’re likely to be looking for long-term gains from it. Either way, and dip or no dip, the price of your property, providing you did your research properly before buying, is likely to appreciate in the long-run.”

Letting Agents can Support Landlords in Staying Up to Date with Legislation

Published On: February 26, 2019 at 10:01 am

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Letting Agents could Benefit from Build to Rent

Landlords should remember how important letting agents can be in supporting them to stay up to date with ever changing legislation in the private rental sector, haart estate agent insists.

At a time when landlords are being bombarded with regulatory changes that could affect their buy-to-let businesses, they are being reminded to ensure that they are clear on the rules. 

With a range of new legislation to comply with, from the Homes (Fitness for Human Habitation) Actto the Tenant Fees Bill, landlords must be up to date with changes in the private rental sector, which is becoming more regulated, especially as a new housing complaints service is due for introduction.

The Communities Secretary, James Brokenshire MP, announced plans last month for a new Housing Complaints Resolution Service, which would legally require private landlords to become members of a redress scheme, as part of wider efforts to protect tenants.

Paul Sloan, the Operations Director at haart, says: “For many landlords, it is difficult to keep up to date with new regulations that seem to bombard the private rented sector every year.

“That’s entirely understandable. For many smaller landlords, in particular, being a landlord is not their full-time job – it’s a useful extra income.”

However, he insists: “But keeping up to date with the latest legislation is vital. That’s one reason why it can be good for your peace of mind – and even your pocket – to have your let professionally managed by a vigilant agent with an established track record.

“Many landlords think their lettings agents are most useful at the beginning and end of their let. In fact, things can change mid-let – not because of something that has happened at the property, but because of something that has happened in Parliament.”

We remind landlords of how essential letting agents can be in keeping you up to date with legislation changes.

We also offer free, useful guides on lettings law to help you understand your responsibilities: https://www.landlordnews.co.uk/guides/

Rent Rises for Tenants Increases, Reports ARLA Propertymark

Published On: February 26, 2019 at 9:00 am

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The number of private tenants experiencing rent rises at the hands of their landlords increased in January, according to the latest Private Rented Sector Report from ARLA Propertymark (the Association of Residential Letting Agents).

Rent rises

The amount of tenants experiencing rent rises increased in January, with 26% of ARLA Propertymark member agents witnessing their landlords putting prices up, compared to 18% in the previous month.

This is the highest figure recorded since September 2018, when 31% of tenants saw rent rises.

Year-on-year, the number of tenants experiencing rent rises is up by 7% on January last year.

Supply and demand

The supply of properties available to rent rose to an average of 197 per ARLA Propertymark member branch in January, which is up from 193 in December. 

Demand from prospective tenants also increased in January, with the number of home hunters registered per letting agent branch rising to an average of 73, compared to just 50 in the previous month.

David Cox, the Chief Executive of ARLA Propertymark, comments: “This month’s results are another huge blow for tenants. With demand increasing by 46% from December, and rents starting to rise in response to all of the cost increases landlords have experienced over the last few years, tenants are in for a rough ride. Last month, there were three landlords selling their buy-to-let properties per branch, and, as landlords continue to exit the market, rent prices will only continue to rise.

“With the Tenant Fees Actpassing its final hurdle in the House of Commons and receiving royal assent this month, tenants will continue bearing the brunt, as agents and landlords start preparing for a post-tenant fees world.”

Landlords, how are you preparing for a world without tenant fees? Perhaps you are one of the investors that have put rent prices up for tenants in anticipation? 

Just 3% of Landlords Offer Short-Term Lets, NLA Finds

Published On: February 25, 2019 at 11:00 am

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Rise in housing waiting lists as landlords sell up or convert to Airbnb lets

Just 3% of landlords currently offer short-term lets on their properties, according to the latest Quarterly Landlord Panel Survey from the National Landlords Association (NLA).

The report, which covers the fourth quarter (Q4) of 2018, found that, of those landlords that do not offer short-term lets, an overwhelming majority have not considered entering the market, with only 24% of the 494 respondents considering it at some point.

Short-term lets, which range in length from one night to around six months, have increased in popularity in recent years, due to the success of websites such as Airbnb. Landlords can generate a significant income from letting their properties in this market.

However, landlords must be aware that offering short-term lets could breach their mortgage terms and invalidate their existing insurance policy, so it’s vital for them to be aware of the problems that it could present.

Just Landlords is proud to offer its 5 Star rated Landlord Insurance for short-term lets: https://www.justlandlords.co.uk/landlord-insurance

Richard Lambert, the CEO of the NLA, says: “We had expected to see a slight increase in the number of landlords letting furnished holiday properties after changes to taxation were introduced in April last year. While this has not been the case for most of the UK, it is worth noting that 20% of landlords in Scotland do offer short-term lets.  

“Holiday lets are treated very differently to other property portfolios in tax and regulatory terms – the decision to switch may be a no-brainer for landlords in areas where there is strong demand from temporary visitors, particularly as there is are no real downside and nothing holding them back from doing so.”

He continues: “However, a shift of properties in a concentrated area to shorter-term letting can have a significant effect on the local rental market, reducing available properties and pushing up rents. There will always be unintended consequences when policymakers don’t make the effort to understand landlords’ motivations and behaviour.” 

Are you interested in the short-term lets sector? 

Nearly Half of Brits Don’t Expect House Prices to Rise in Next 3 Years

Published On: February 25, 2019 at 10:27 am

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Nearly half (41%) of Britons do not expect house prices to rise in the next three years, according to research by home moving company AnyVan.

With Brexit now firmly on the horizon, uncertainty over the UK’s departure from the EU is weighing on property buyer and seller confidence. Many are waiting for the dust to settle, but there are many still expecting house prices to rise this year. 

One in five homeowners are hoping that property values will increase over the next 12 months, rising to over a quarter (27%) next year and a third (32%) in 2021.

In London, the weak pound may have pushed international buyers in prime central London to its highest level for six years, but, for the majority of Londoners, very uncertain times are ahead. 40% of homeowners in the capital do not expect to see any property value growth in the next three years. However, many are more positive on the bounce back ability of the London property market, with a third (31%) expecting house price increases in 2020 and 2021.

Elsewhere in the UK, Scottish and Welsh residents predict tough times ahead for house prices. Over half (53%) of those in Wales do not expect to see values increase in the next three years, with over a quarter still forecasting price declines in 2021. In Scotland, 32% of people forecast a decrease in house prices this year, plus 29% in 2020 and 22% in 2021. 

Leeds (29%), Bristol (24%) and Newcastle (27%) have the greatest proportion of homeowners predicting growth next year, while 35% of those in Birmingham and 34% in Southampton expect values to rise in 2021.

Angus Elphinstone, the CEO of AnyVan, says: “Our latest property research gives a good indicator of the sentiment of British homeowners. While there have been recent statistics about the slowdown of property transactions and areas experiencing falling values, it seems the country is still split on their view on property price growth in the years to come. 

“Things will become a lot clearer once we leave Europe, but, with 41% of the nation not expecting property price increases in the next three years, it’s clear to see Theresa May and her Government have a lot of work to do.”

Buy-to-Let Booms in North West England, Savills Reports

Published On: February 25, 2019 at 9:59 am

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Buy-to-let investment is booming in the North West of England, according to the latest figures from property firm Savills.

Despite economic conditions making the buy-to-let market challenging for property investors, analysis of the Savills data shows that the North West has overtaken the South East of England as the most popular region for buy-to-let landlords.

Maxim Cohen, the Chief Executive of mortgage advisory business The UK Adviser, explains why the region is so popular: “It is no surprise that the North West and its property continues to thrive, and the feedback we have had from our UK Advisers has supported this growth trend. The North West hasn’t experienced the same levels of property inflation and demand that the capital has in recent years, and, therefore, the market hasn’t been distorted.

“With property prices sky-high in the capital, incoming rents do not match the high mortgage payments, making yields unprofitable and not worthwhile. However, property in the north has not experienced the same problem, despite increased investment in cities such as Manchester and Liverpool, with the recent investment in the North West bringing business and people to the region, who increase the demand for rental properties.”

Buy-to-Let Booms in North West England, Savills Reports

He continues: “The introduction of national and international businesses to the Manchester and Liverpool areas has also increased demand for rental properties in commuter towns, and revitalised towns such as Altrincham, Didsbury and Chorlton in South Manchester, which have seen a boom in buy-to-let properties.

“Slow property market activity in the wake of Brexit negotiations also means lenders are offering rock-bottom mortgage rates to tempt landlords, following the Bank of England’s base rate decisionlast year. However, the low rates are unlikely to stay that way for long, creating an urgency for investors to buy now, before rates change. Many mortgage lenders will continue to offer incentives, such as free valuations and cash back, to attract business from landlords.”

However, Cohen notes: “Of course, depending on the outcome of Brexit, house prices in the UK could take a hit. Deterred by the uncertainty of the property market, an increasing number of individuals could be looking to rent property instead of buying, pushing up the demand for rental housing and the cost of rent. If you’re currently considering investing in buy-to-let property, it’s worth monitoring the property market, as house prices have the potential to drop significantly. However, a drop in house prices will not be as significant in the North West compared to the capital, making it attractive to investors. If there is a noticeable drop, investors will need to be prepared to act quickly to secure the property they want, as more landlords look outside of the capital.

“Getting your finances in order ahead of 29thMarch will make you a more attractive buyer and allow you to react quicker to any market changes. Alternatively, bridging loans and other alternative finance options can give landlords access to fast, flexible finance to secure property acquisitions in a competitive market.”

He concludes: “2019 is set to be an uncertain time for landlords, but the market is thriving around the UK. Considering alternative locations for investment may mean higher yields and a profitable year, despite the pessimism of the industry.”

Landlords, are you attracted to the booming North West?