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Em Morley

Number of Buy-to-Let Mortgage Deals Available Drops Slightly

Published On: October 23, 2017 at 9:26 am

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Number of Buy-to-Let Mortgage Deals Available Drops Slightly

Number of Buy-to-Let Mortgage Deals Available Drops Slightly

The total number of buy-to-let mortgage deals available on the market has dropped slightly over the past month, but remains at its second highest level since the recession in 2008, amid fierce competition between lenders, according to the latest figures from Moneyfacts.

There are currently 1,723 buy-to-let mortgage deals available, down from 1,725 in September, but significantly higher than the 1,477 products on the market a year ago.

However, this marginal monthly decline suggests that mortgage providers may now be holding back as they take stock of recent lending rule changes. Mortgage lenders are now required to apply stricter standards to portfolio landlords – those with four or more buy-to-let properties.

At the same time, the rates on buy-to-let mortgage deals are beginning to edge up.

The data from Moneyfacts reveals that, while the average buy-to-let fixed rate mortgage stood at a record low 3.15% in September and remained at that level when October’s figures were calculated, it has since started to creep up and, at the time of writing, stands at 3.17%.

This pattern can also be seen across the majority of terms and loan-to-value ratios (LTV).

For example, the average two-year fixed rate buy-to-let mortgage stood at 2.79% at the beginning of October, but has now risen to 2.82%. Meanwhile, the average three-year fixed rate has increased from 3.15% to 3.20% over the same period. Only the average five-year fixed rate buy-to-let deal remains unchanged, at 3.43%, yet, even then, it fell to 3.41% just a week ago and has since edged back up.

Could it be that lenders are preparing for a potential increase in the Bank of England’s base rate? It has been suggested that interest rates could soon rise from their record low 0.25% over the coming months.

Have you seen a decline in the number of buy-to-let mortgage deals available?

Government Could Ban Gazumping in Property Market Shake-Up

Published On: October 23, 2017 at 9:04 am

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Categories: Property News

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The Government could move to ban gazumping in order to save time and stress during the property purchasing process.

The Communities Secretary, Sajid Javid, has called on the property industry to provide evidence on how buyers and sellers can save time during the home buying process, with any streamlining through technology also being considered.

One area of focus is to make selling and buying property cheaper, faster and less stressful by tackling the practice of gazumping.

The Founder and CEO of online estate agent eMoov.co.uk, Russell Quirk, has contributed to the study, providing his thoughts on gazumping and how it can be tackled head-on to improve the property sector.

Government Could Ban Gazumping in Property Market Shake-Up

Government Could Ban Gazumping in Property Market Shake-Up

He says: “Gazumping really is the scourge of the property market and a practice that is facilitated through a draconian, archaic conveyancing system, the likes of which is shared only with Papa New Guinea, which leaves large numbers of buyers extremely disappointed and out of pocket. During the most stressful part of the property purchase, it further exacerbates the emotional turmoil a buyer can find themselves in, and can crush their hopes and dreams of securing that perfect property.

“The law needs to change to ensure there is a contractual obligation and to protect homebuyers much earlier on in the process. One common misconception is that gazumping is the work of the agent in order to secure more commission on a property. However, this practice is often orchestrated by the seller and without the support or encouragement of the agent, although they take the blame.”

He adds: “These property market fall-throughs cost £1 billion per annum in wasted legal and survey costs – money that could be better spent elsewhere in tackling the housing crisis.”

Quirk has compiled a list of what he believes needs to be done to improve the property market:

  • Encourage e-conveyancing to ensure that all documentation is in one place and digitally accessible quickly, and at the same time across multiple parties.
  • Ensure that surveyors, local authorities and mortgage lenders are legally compelled to work faster and for the buyer, not against them.
  • Allow electronic signatures to be used within the process.
  • Introduce title insurance as they do in the USA.
  • Force the conveyancing process to deal with the multiple work streams in parallel, rather than consecutively.
  • Introduce earlier contractual obligation on the part of the seller and buyer, similarly to Scotland and the USA.

Alongside its call for evidence, the Government has published the findings of a survey of 2,000 people, which showed that 69% of sellers and 62% of buyers report stress and worry as a result of delays.

Almost half (46%) of sellers had concerns about buyers changing their minds after making an offer, while almost a quarter (24%) would use a different estate agent if they had to go through the process again.

Nearly a third (32%) of sellers and 28% of buyers were dissatisfied with the other party’s solicitor, the study also found.

The call for evidence will run for eight weeks from yesterday (Sunday 22nd October 2017).

Javid comments: “We want to help everyone have a good quality home they can afford, and improving the process of buying and selling is part of delivering that. Buying a home is one of life’s largest investments, so if it goes wrong, it can be costly.

“That’s why we’re determined to take action to make the process cheaper, faster and less stressful. This can help save people money and time so they can focus on what matters – finding their dream home. I want to hear from the industry on what more we can do to tackle this issue.”

The Chief Executive of NAEA Propertymark (the National Association of Estate Agents), Mark Hayward, responds to the consultation: “NAEA Propertymark has long been calling for more regulation of the estate agents sector, to ensure that consumers are protected when dealing with the biggest asset most people own, their home. We are delighted that Government has chosen to include further estate agents regulation in the scope of their call for evidence into the house buying and selling process. This is a welcome review of the process, which is currently archaic and does not reflect the 21st century.”

30% Believe that Using High Street Letting Agent to Rent Property is Outdated

Published On: October 23, 2017 at 8:13 am

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Categories: Property News

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Over 30% (31%) of UK adults believe that using high street letting agents to rent a property is outdated and burdened by reams of paperwork, according to a study of 2,000 adults by virtual letting agency LetBritain.

30% Believe that Using High Street Letting Agent to Rent Property is Outdated

30% Believe that Using High Street Letting Agent to Rent Property is Outdated

The research revealed that 25% of adults prefer to use online-only services, such as Gumtree or Spareroom.com, to source and secure a rental property, with 32% of landlords and tenants not having the time to use services that require them to visit a physical premise within working hours.

And its not only the lettings sector that is frustrated by the archaic processes still being used by high street businesses.

Half of consumers (51%) say that they rely on online solutions for the vast majority of their products and services, while 45% favour online services over ones that require them to go to physical premises.

A high proportion of adults (29%) refuse to use a business if they have no online service altogether.

The research shows that Londoners are the most technologically demanding, with 62% opting for online solutions and a majority (51%) consciously avoiding businesses that do not offer online services.

Looking to the future, 57% of UK adults – that’s 29.3m people – believe that online or app-based competitors will replace businesses with no online presence in ten years’ time, by 2027.

The CEO of LetBritain, Fareed Nabir, comments: “Over the past decade, online solutions have drastically transformed the way we conduct business. Today’s research clearly shows that consumers not only expect but now demand that companies provide their services online. And, on that point, the rental market is clearly falling short, with too many high street real estate agents failing to embrace digital solutions, relying on cumbersome offline processes. For businesses in the rental market, the choice is simple – integrate and embrace online solutions, or run the risk of being outpaced by changing consumer demand.”

Are you putting digital processes in place to cater to online demand from tenants?

Government Focus on PRS is a Positive, Insists PropTech Firm

Published On: October 20, 2017 at 10:01 am

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The Government’s focus on the private rental sector (PRS) should be considered a positive by those working in the lettings industry, according to proptech firm PayProp UK.

The lettings industry supplier says that the move towards increasing regulation of the PRS shows just how integral a part of the wider UK housing market it has become.

According to the latest English Housing Survey, the PRS now accounts for around 20% of all households, while the proportion of homeowners has dropped from 71% to 63% since 2003.

More recently, the Government announced that it is considering whether to introduce a regulatory body to handle leasehold and private rental property management, as well as letting agents.

Government Focus on PRS is a Positive, Insists PropTech Firm

Government Focus on PRS is a Positive, Insists PropTech Firm

And, at the Conservative Party conference earlier this month, the Communities Secretary, Sajid Javid, announced a number of PRS proposals, alongside Theresa May’s measures to boost housebuilding.

Javid said that the Government wants to fix the property management industry, while reducing costs and protecting consumers from the minority of rogue agents still operating. The Conservatives argue that, as well as leaseholders, millions of tenants are being overcharged for repairs and services passed down to them.

Via a six-week consultation, the Government is now calling for evidence on whether regulatory overhaul of the property management system is necessary.

Javid also informed the conference that he hopes to introduce regulation for all letting agents, referencing the fact that, currently, anyone can start operating as a letting agent without “qualifications or professional oversight”.

The Department for Communities and Local Government (DCLG) is therefore proposing the introduction of minimum training requirements and compliance with an industry code of conduct.

There were also proposals to introduce incentives for landlords offering longer-term tenancies, and the requirement that all landlords become members of a redress scheme.

The COO of PayProp UK, Neil Cobbold, says: “While we eagerly await the details of all these proposals, it has to be said at this stage that they represent a positive step forward for the industry.

“There have been campaigns for the regulation of the industry for a long time now and, this month, it’s become clear that the issue is high on the Government’s agenda.”

He continues: “Requiring all landlords to be members of a redress scheme will ensure that 100% of tenants have access to a fair and impartial complaints procedure.

“Meanwhile, there’s clearly an appetite to extend minimum tenancies and, with more people now renting privately for longer, we can understand the Government’s thinking behind this proposal.”

In the lead up to the Conservative Party conference, PayProp called on MPs to consider appointing an independent housing tsar.

“We still believe the idea of taking oversight of the property sector away from party politics should be considered but, if implemented properly, these proposals could really help the industry,” Cobbold claims.

A regulated PRS, with more stringent basic guidelines for letting agents, could benefit the whole industry, according to PayProp.

“Minimum standards for letting agents will mean a better level of service across the board, as well as an improved public perception of the industry,” believes Cobbold. “Increased professionalisation of the sector is a must, and will help to improve transparency and stamp out the minority of rogue landlords and agents still operating.”

He adds that, as the PRS continues to grow, the Government’s awareness of its importance will prove crucial.

“The fact that politicians continue to monitor the growth and expanding influence of this tenure type is positive and necessary, as homeownership levels in this country continue to decrease,” he concludes.

Calls to Protect Welsh Tenants from Unjust Fees and Rogue Landlords

Published On: October 20, 2017 at 9:36 am

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The Secretary of State for Wales, Alun Cairns, has called for greater protections for Welsh tenants against unjust fees and rogue landlords.

Cairns wants to see Wales follow England’s lead and ban letting agents charging Welsh tenants fees, while he also wants to see the introduction of a range of measures designed to protect renters from unfair practices.

He explains: “Getting set up in a private tenancy can be eye-wateringly expensive. Not only must new tenants find thousands of pounds upfront for deposits and rent in advance, they also have to pay fees to letting agents for a range of administrative costs, which can often run into the hundreds of pounds.

“This has been going on for far too long and, today, the UK Government is taking a stand by giving tenants in England more power to challenge extortionate fees and poor treatment. Wales must not get left behind.”

He insists: “It is time that the Welsh government followed the example being set in England, and move quickly to protect tenants in Wales from unjust fees and rogue landlords.”

Calls to Protect Welsh Tenants from Unjust Fees and Rogue Landlords

Calls to Protect Welsh Tenants from Unjust Fees and Rogue Landlords

In August, the Welsh government released a report claiming that there is “no compelling evidence” for Welsh tenants to pay upfront letting agent fees or renewal costs for existing tenancies, as “the large majority of the work undertaken by agents is work that the landlord would otherwise be doing themselves”.

Isobel Thomson, the Chief Executive of the National Approved Letting Scheme (NALS), has released a short statement in response to the calls: “NALS notes the Secretary of State for Wales’ call for the Welsh government to take measures to protect tenants in Wales from unjust fees and rogue landlords and agents.

“In relation to fees, we believe that the majority of agents in Wales charge a fair fee for a fair service, and we await the outcome of the consultation by the Welsh government on this issue.

“Wales already has full regulation of landlords and agents, and therefore the regulatory organisation, Rent Smart Wales, should by now be delivering the effective action necessary to ensure that tenants are offered the degree of protection they deserve and rogue landlords are exposed.”

At the same time, the Welsh Cabinet Secretary responsible for housing policy, Carl Sargeant, will be the headline speaker at a new conference on the future of the private rental sector in Wales.

With over 16% of households in Wales expected to be living in the private rental sector by 2025 – up from 8.4% in 2000 – the Future Renting Wales conference will provide landlords will everything they need to know about the future of the market.

Organised by the Residential Landlords Association (RLA), it will help landlords understand increasingly complex new laws and regulations, including Rent Smart Wales, the introduction of new standard tenancy agreements, and the new safety and minimum property standards that are on the horizon.

In addition to Sargeant, David Smith, the Policy Director of the RLA and legal adviser to the Welsh Assembly’s Renting Homes Bill committee, will address the conference on the implementation of the new laws, and what they will mean for landlords, Welsh tenants and their lettings businesses.

Anne Rowland, of Rent Smart Wales, will discuss the scheme and future direction of the operation, while other industry experts will update delegates about reforms to tax, energy efficiency standards and welfare reform, looking at how legislation from Westminster is being implemented in Wales. Exhibitors will also be on hand to offer advice and support to delegates.

The conference, on 30th November 2017, will be held at the Jury’s Inn, Cardiff and is open to anyone with an interest in private rental housing.

Douglas Haig, the Director of the RLA in Wales, who will also be speaking at the event, says: “This is a fantastic opportunity for delegates to hear from expert speakers, coming together to update them on best practice and the many forthcoming changes to the sector.”

Early-bird tickets start from just £20 for RLA members and £25 for non-members. They are available here.

Landlords and letting agents in Scotland must be aware of new tenancy rules being introduced in the coming weeks.

New Tenancy Rules just Weeks Away for Scotland

Published On: October 20, 2017 at 8:51 am

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Categories: Landlord News

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New tenancy rules, which will see the no fault ground for taking back possession of a rental property abolished, are just weeks away for Scotland.

A new model tenancy agreement has been issued by the Scottish government and must be used by landlords and letting agents from 1st December 2017.

The new Private Rental Tenancy (PRT) replaces Assured Shorthold Tenancy (AST) agreements, known in Scotland as SATs. The new tenancy rules will not affect existing contracts, but will have to be used for all new tenancies.

The PRT gives 18 statutory grounds for a landlord to end a tenancy, which include the landlord wanting to sell the property, occupy the home themselves, or refurbish it. Other grounds include where a tenant has owed rent for three consecutive months, has shown anti-social behaviour, or abandoned the property.

However, there is no ground equivalent to Section 21, where landlords do not have to give a reason for wanting their property back. Another change is the notice period.

The PRT does not allow landlords or tenants to agree a minimum period of occupancy, with the tenancy continuing automatically.

If tenants want to leave the property, they must give their landlord 28 days’ notice in writing.

Adrian Sangster, of Aberdeen agent Aberdein Considine, says: “While removal of the no fault ground is a major change, the new 18 specified grounds to recover possession do cover the majority of reasons for wishing to do so.

“The biggest impact is the removal of the minimum term, which means, in theory, a tenant could serve 28 days’ notice a day after moving in. In practice, this is unlikely to occur, as the vast majority of tenants are looking for a home and, if the landlord keeps up their side of the bargain by providing a safe and comfortable environment, tenants will stay.”

He continues: “In our own experience, the average tenancy lasts in the region of 18 months. Where I’m less certain, however, is what the attitude of lenders will be where the property is mortgaged.

“Currently, as long as the rent covers the mortgage and a six-month SAT is in place, the majority will be reasonable to deal with. However, where that six-month term is no longer available, will they become less likely to grant approval to let? I am not sure what discussions the Scottish government have had with lenders regarding this issue.”

ARLA Propertymark (the Association of Residential Letting Agents) is holding a series of workshops in Scotland to explain the new tenancy rules, starting next week.

There has already been some pressure in England for ASTs to be replaced and the no fault ground for possession to be abolished. It has also been noticed that trends in the Scottish private rental sector, such as bans on letting agent fees, seem to be subsequently copied in England. Could these new tenancy rules be in force across England in due course?