Written By Em

Em Morley

Landlords and Tenants still Unaware of New EPC Laws

Published On: March 29, 2018 at 8:05 am

New research from our friends at 5 Star rated Landlord Insurance provider Just Landlords has revealed a number of shocking misconceptions around new EPC laws.

The study also exposes how few landlords and tenants understand how Energy Performance Certificate (EPC) ratings can impact a property’s environmental footprint and help occupiers save money.

The findings come ahead of the introduction of the Government’s new Minimum Energy Efficiency Standards (MEES), which will apply to all new tenancies and renewals from 1^st April 2018. They will concern all rental properties from 1^st April 2020.

The poll, of over 400 landlords and tenants in the UK, found that 48% of those asked did not know that upgrading their insulation would improve their property’s EPC rating.

Landlords and Tenants still Unaware of New EPC Laws

An energy efficient property will be more appealing to prospective tenants

Of those surveyed, less than two thirds (58%) knew that the condition of the windows had an effect on an EPC rating, while 80% didn’t know that an EPC rating could be an indicator of how environmentally friendly a property is. 30% did not know that an upgraded boiler would improve their rating.

Once the new MEES are in effect, private rental properties must have an EPC rating of E or above. Properties with an F or G rating will be unlawful. Landlords found granting a new lease on a property with these ratings from 1^st April could face a penalty of up to £4,000.

David Cox, Chief Executive, ARLA Propertymark has commented on this upcoming deadline for landlords: “While the number of properties which are EPC rated F or G has fallen dramatically from 700,000 in 2012, to 300,000 today, many landlords are yet to prepare their properties for the new laws.

“Sunday’s deadline means they’ll either face fines of up to £4,000, or lose money on empty properties which cannot be let until they meet the standards. Either way, it’s another kick in the teeth for hard working landlords, and tenants looking to find affordable accommodation.”

Rose Jinks, our writer and spokesperson for Just Landlords, says: “It’s not only essential that landlords understand all new legislation in order to avoid hefty fines, but also that their properties are safe and comfortable for their tenants. This law is designed to improve the energy efficiency of rental properties, which could vastly reduce bills for tenants.

“In addition, landlords will be pleased to know that an energy efficient property will be more appealing to prospective tenants when it comes to marketing the property, so it’s a win-win. Now is the time to start looking at the changes your property needs to comply with the new rules.”

Paragon Procuration Fee to Create Capital Opportunity for Landlords

Published On: March 28, 2018 at 10:23 am

Author: Em Morley

Categories: Finance News

A new procuration fee has been introduced by Paragon, the specialist bank and buy-to-let mortgage lender. This fee is for intermediaries who submit further advance business for buy-to-let customers that later go through.

Up to 0.5% of the value of the funds advanced will be charged, and Paragon has said they will also pay the same rate.

With a further advance, landlords who have an existing mortgage with Paragon will have the opportunity to release capital in order to fund any further investments and developments within the property industry. This may provide a competitive and more convenient alternative to applying for a full remortgage of their properties.

This is but the latest in a series of developments from Paragon. The introduction of the procuration fee, along with such other plans, are designed to improve the proposition of the mortgage throughout the full life of the loan.

Last month Paragon introduced a new online portal and application process for switch products and further advance business. It is designed to help intermediaries manage tasks within their accounts, including the option to upload comments and documents directly to Paragon’s underwriting system. This will help intermediaries determine where available funds may be and how much they could amount to.

John Heron, Managing Director of Mortgages at Paragon has commented: “The new online portal give customers and intermediaries the tools they need to help them access switch and further advance facilities quickly and easily.

“Introducing the procuration fee today recognises the critical role our intermediaries play in supporting customers through the decision-making process.”

It will be interesting to see, with such a fee in place and the introduction of this portal, if this opens new doors for landlords and creates encouragement for further growth within the property industry.

New Data Reveals the Original Help to Buy Winners

Published On: March 28, 2018 at 9:23 am

Author: Em Morley

Categories: Property News

New analysis from independent mortgage broker Private Finance reveals the areas of the country where you can find the original Help to Buy winners.

The study assesses the locations where original Help to Buy borrowers (those who took out an equity loan when the scheme began in 2013) are in the best position to repay their equity loan and still benefit from capital gains when moving home.

Early adopters of the scheme will start to incur interest on their loans this April, providing motivation for them to move up the housing ladder. Borrowers in the scheme must repay 20% of the property value at the time of selling (rather than the original loan).

Among 51 Help to Buy hotspots – the local authorities where 100 or more Help to Buy equity loans have been completed each year since the scheme was introduced – borrowers in Greenwich, Wokingham and Dartford are the original Help to Buy winners, being in the best position to pay off their equity loan and still benefit from capital gains.

In contrast, borrowers in County Durham, Stockton-on-Tees and Rochdale have seen much more modest house price growth, and, as such, face repaying loans that are larger than the capital gains earned in the past five years.

The following list indicates the locations most likely to see original Help to Buy winners:

Greenwich
Wokingham
Dartford
City of Bristol
Central Bedfordshire
Bedford
Horsham
Test Valley
Colchester
Cherwell

These areas, however, are least likely to see winners:

County Durham
Stockton-on-Tees
Rochdale
Sunderland
Doncaster
Barnsley
Stoke-on-Trent
Chorley
Wolverhampton
St Helens

Shaun Church, the Director of Private Finance, comments on the findings: “Original adopters of the Help to Buy equity loan scheme are about to see their interest holiday come to an end. With five years having passed since scheme was created, it’s likely some of these borrowers are now looking to move up the property ladder, and the prospect of paying interest on their loan may give them the push they need.

“Many Help to Buy homeowners will have experienced significant house price growth since they first took out their loan, but it’s a postcode lottery as to how much they will have left to play with once their equity loan is repaid. While most have done very well out of the scheme, our research shows that buyers in some areas, particularly in the north, are at risk of the amount they must repay outweighing their capital gains.”

He continues: “There are also challenges for those who want to stay in their Help to Buy home but switch to a different mortgage deal, as not all lenders under the scheme offer remortgage products. Help to Buy homeowners who are wondering what their next steps should be would benefit from seeking advice from an independent mortgage adviser who can explain their options.”

Does this latest research indicate that the Help to Buy scheme isn’t as beneficial as it should be for some buyers?

Londoners could miss out on £500 million this Easter

Published On: March 28, 2018 at 8:10 am

Author: Em Morley

Categories: Property News

Rogue Landlords be Warned: Database Enables London Boroughs to Name and Shame

It seems that many more Londoners could be generating income on their homes this Easter weekend, as only 0.5% of occupants let out their home whilst away. The average rental income for a 3-night stay in zones 1 or 2 in the capital comes to £540, according to property management company Air Agents.

Fran Milsom, the co-founder of Air Agents explains,

“Whilst you’re away this Easter, your home could help pay for your trip. The average zone 1/2 property in London on our database rents out for £180 per night, totalling £540 for the Easter weekend.

“At present, there are less than 9% of homes in the capital left to be booked this Easter, so you are almost guaranteed a rental income whilst you are away this weekend!”

Current regulations allow homeowners to rent out their properties for a maximum of 90 days per year. If you calculate London rates at an estimate of £500 for a 3-night stay, extrapolated over 90 days (assuming you were to rent out the property for the full 90 days), this could generate additional income of about £15,000.

Londoners could collectively miss out on up to £500m this Easter

Should I consider renting out my home short-term?

Short term rentals generate on average 30% higher rates than long-term rentals
Greater flexibility – you can tailor when you let your property much more precisely than long term lets
Maybe you’ve been meaning to book that city break for a while, but aren’t sure about the extra expense? Renting your home out on Airbnb could pay for your ideal trip
If you’re renting a room in your house, you’re likely to meet interesting people from all over the world
There might be additional risk of damage by unruly guests, but the higher rental price, as well as home insurance are likely to help cover the costs of this
If you’ll be out of the property,
Airbnb have reviews and ratings on prospective tenants, so you can to an extent vet the people at first, and have the opportunity to reject those you do not feel are a good fit
There are many property management companies around who have adapted to a changing rental market, who will take care of the key-holding, pre and post-tenant cleaning and other essential tasks

As such, short-term rental solutions can be a great way to fund that extra summer trip, or the next long weekend away. Fran Milsom of Air Agents explains, “We know that it can be scary renting your home, whilst out of the country or hundreds of miles from home which is why we are there 24/7 to ensure both you and the guests are having the best stay. On your behalf, we will vet the tenants, clean your house once they leave and take care of everything else in between.”

UK Finance Issues Update on Lending for February 2018

Published On: March 27, 2018 at 10:12 am

Author: Em Morley

Categories: Finance News

UK Finance has issued its monthly update on lending for February 2018.

The report shows that gross mortgage lending in February is estimated to have been £19 billion – 4.9% more than in the same month last year, but below the monthly average of £21.4 billion for 2017.

Remortgage approvals in February were up by over 9% in both number and value compared to February 2017.

The figures also reveal that consumer spending was mainly reflected in the use of credit cards, with outstanding levels of card borrowing growing at a rate of 6.3% over the year, while use of loans and overdrafts continues to drop.

UK businesses’ deposits rose by almost 7% in the 12 months to February, while borrowing over the same period grew slightly, by 0.5%. Within business sectors, manufacturers’ borrowing expanded, while construction and property-related sectors contracted.

Eric Leenders, the Managing Director of Personal Finance at UK Finance, comments on the data: “There has been an increase in remortgage approvals compared to last year, as borrowers look to lock into attractive deals amid speculation of further interest rate rises later this year.

“We are also seeing a continuing rise in credit card spending, reflecting the growing number of transactions carried out using cards, while other forms of borrowing, such as overdrafts, continue to fall.”

He continues: “Meanwhile, real wages continue to be squeezed by inflation, impacting on consumer confidence and retail sales. This pressure on household incomes should ease in the coming months, as the effect of the fall in sterling begins to fade and the strong labour market leads to a better outlook for wage growth.”

Stephen Pegge, the Managing Director of Commercial Finance at UK Finance, adds: “Bank lending to businesses saw modest year-on-year growth in February, driven by investment within the manufacturing sector.

“Credit balances have risen at an even faster rate, as companies build reserves in the face of economic uncertainty and its effect on longer term business confidence.”

NAEA Propertymark’s February Housing Report Reflects Impact of FTB Stamp Duty Relief

Published On: March 27, 2018 at 9:45 am

Author: Em Morley

Categories: Property News

In February we saw a rise of house sales to first-time buyers (FTBs), indicating the impact the first-time buyer Stamp Duty relief is having on the property market. However, according to NAEA Propertymark (the National Association of Estate Agents), more help is needed.

NAEA Propertymark’s February Housing Report shows that this relief is having the desired effect, with sales gradually rising to 29% in February from 27% in January. These sales show the best results since February 2015, which led into a dip of 24% and 22% in 2016 and 2017 respectively.

Mark Hayward, Chief Executive of NAEA Propertymark, has commented: “Since the Chancellor cut Stamp Duty for first-time buyers, there have been a good level of sales to the group, but they haven’t rocketed…

Looking at the individual sales of Propertymark branches, there were seven agreed in January and eight in February, showing the highest results in a few months, as they hadn’t been at such numbers since October 2017.

Hayward also said: “Our members have noticed FTBs holding off on making purchases since the rule was introduced – typically outside of London – opting instead to save for longer to maximise the full stamp duty relief.”

Although we are seeing these improvements, it is clear that the crash in the housing market is taking its toll.

The demand for property has dropped slightly, with the actual number of those searching for properties falling from 367 registered per branch, to 309.

Adjacently to this demand, the supply is also suffering, with the amount of available properties per branch dropping from 36 in January, to 35 in February.

The selling prices of properties have been fairing similarly in the same month, according to this research, with 74% of properties selling for less than the asking price. 22% sold at the asking price and 4% sold for more.

Hayward went on to say: “The cost of buying is still very high, and FTBs are still finding it difficult to save for their deposits. As the cost of living continues to rise, we still have a long way to go to make the dream of owning a home accessible to all, but this is definitely a step in the right direction.”

We hope to see such a trends continue and also show in the March report.