Written By Em

Em

Em Morley

Buy-to-let investment is still a reliable asset class

Published On: May 25, 2017 at 1:47 pm

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Categories: Landlord News

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Buy-to-let landlords have certainly had a rough time of it lately. A raft of legislation changes, such as alterations to mortgage interest tax relief, Stamp Duty surcharges and the Right to Rent scheme have all provided difficulties for investors.

The fact is that these tax changes mean that buy-to-let does not offer as lucrative returns as it once did. However, many people still believe that this asset class offers a solid, stable investment.

A soaring demand for rental property is underlined by the fact that the average age of a first-time buyer in the UK is now 35 – as opposed to 24 one decade ago.

Rewarding

Offering his assessment, Stephen Reade, letting operations manager at Harrison Murray Lettings, part of the Nottingham, said: ‘Becoming a landlord can be a rewarding experience and, if done correctly, provide a steady and sustainable return as an income investment, especially compared to lower savings rates and stock market swings.’[1]

‘Investors are snapping up property in the hope that it will not only return a reliable yield but also a benefit from capital growth given enough time. Mortgage rates at record lows are helping buy-to-let investors make deals stack up,’ he continued.[1]

Buy-to-let investment is still a reliable asset class

Buy-to-let investment is still a reliable asset class

Moving on, Reade urged landlords to make sure their figures add up before investing.

‘One day they [rates] must rise and you need to know your investment can stand that stress test, a criteria sought by many lenders recently. Recent history provides an important lesson in how returns can be hit. Many buy-to-let investors who bought in the boom years before 2007 struggled as mortgage rates rose. A sizeable number were thrown a lifeline when the base rate was slashed to 0.5 per cent. Rates stuck there until this summer and then were cut again after Brexit, but they will rise again.’[1]

‘Even considering the recent tax changes and potential for buy-to-let mortgage costs to rise, there are many positives. We are becoming a nation who sees renting as a flexible lifestyle choice and is far more sociably acceptable. With greater demand from tenants, rents that should rise with inflation and the long horizon for interest rate rises, mean many investors are still tempted by buy-to-let,’ Mr Reade concluded.[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2017/5/buy-to-let-remains-a-steady-and-sustainable-income-investment

 

Supply of rental accommodation in London falls

Published On: May 25, 2017 at 11:39 am

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The most recent report from ARLA Propertymark reveals that the number of rental properties available in London fell substantially in April.

From 148 properties per member branch in March, this figure fell to 101 in April – a drop of 32%.

Across the UK as a whole, the number of properties managed per branch actually rose, from 183 to 185.

Rents

24% of letting agents saw landlords increasing rents during April – a fall of just 1% from March.

The number of tenants negotiating rent reductions also slipped during the last month, with 2.8% of agents seeing rent reductions – down from 3.6% in March.

In April, the volume of landlords selling their buy-to-let properties remained constant to the previous month. In March, the number of landlords looking to sell-up increased from three to four per branch for the first time since November.

Supply of rental accommodation in London falls

Supply of rental accommodation in London falls

What’s more, tenants were found to have stayed in their rental accommodation for an average of 17 months – a fall from the 18 months recorded in March.

David Cox, Chief Executive of ARLA Propertymark, noted: ‘Although the rental market in London has seen a large drop in the supply of properties available to rent, it’s a different picture in the rest of the UK where we have seen little or no change to activity since March. It’s likely we’re seeing the rest of the rental market outside of the Capital plateau as a result of the election in June, with renters potentially holding back on their property searches until after 8th June. It’s important that housing is at the top of the new Government’s agenda, as we have had two elections and a referendum in the last three years which is stalling the policy process meaning that we do not have the right houses available to provide the homes people need.’[1]

 

[1] http://www.propertyreporter.co.uk/property/rental-supply-falls-by-a-third-in-london-as-uk-plateaus.html

 

UK landlord to scrap rental deposits

Published On: May 25, 2017 at 8:51 am

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A UK landlord has moved to scrap rental deposits from 14th June 2017 for new residents. Get Living is also returning security deposits to existing residents, which will see roughly £3million released back to the UK economy.

Launched in May 2013, Get Living is the force behind the country’s biggest single-site PRS scheme at the old London 2012 Athlete’s Village – now known as East Village, E20. This site is home to over 3,000 tenants in 1,439 homes.

No Deposits

From 14th June, new residents who pass referencing checks or have a guarantor in place will not be required to pay a security deposit. In addition, as a reward for residents that have taken good care of their home and paid rent on time, Get Living will waive any cleaning costs should these amount to less than a week’s rent.

Present Get Living residents will have their deposits returned to them from early July 2017. Firstly, deposits will be returned to residents who have lived in the same East Village residence for longest, with this process expected to be complete by the end of the year.

UK landlord to scrap rental deposits

UK landlord to scrap rental deposits

Neil Young, CEO of Get Living, observed: ‘Get Living was the first to revolutionise the rental experience in the UK by removing agency fees and introducing longer term tenancies as standard. We know that the cost of living can be high so, as a responsible landlord with a long-term perspective, it is important for us to be able to identify and address areas where we can alleviate the burden on our residents. Scrapping security deposits as a pre-requirement and returning deposits to current residents is yet another step we are taking to show we are firmly on the side of renters.’[1]

‘We launched Get Living four years ago this month and in that time our average deduction from deposits has been just a few days’ rent, with the majority of our residents getting their deposits returned in full. We have great relationships with our residents and, given they are taking such good care of our homes, why should we hold six weeks’ rent? We can do this at Get Living because we have the scale and track-record to know it will work.

“Where we have led – with no fees and longer tenancies – others have followed. We hope deposit-free renting becomes the norm,’ he added.[2]

[1] http://www.propertyreporter.co.uk/landlords/uk-landlord-scraps-rental-deposits.html

 

 

 

ZPG announces hike in listings and agents

Published On: May 24, 2017 at 11:54 am

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Categories: Property News

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ZPG has today published its half-year figures, which reveal a 6% increase in the number of agents and 9% rise in the total listings on its Zoopla and Primelocation portals.

This has resulted in a 22% hike in revenue for the group. 750 estate agent breaches have been to the portals in the last two years, with ZPG moving to invest in a new business that will provide an alternative to tenants’ deposits.

Rising Revenue

During the six months to the end of March 2017, revenue increased to £117.9m, with ZPG recording record traffic. Over 314m visits to the company’s websites and apps were seen in the period – 68% of these using mobile devices.

This 6% rise in agents took the total to 14,271 branches, with inventory now up over 928,000 listings.

What’s more, average revenue per partner has increased by 5%, driven by a healthy demand for portal and software products.

ZPG announces hike in listings and agents

ZPG announces hike in listings and agents

Records

Alex Chesterman, founder and chief executive of ZPG, noted: ‘Our audience grew by five per cent with a record 314 million visits to our websites and apps and we achieved record levels of brand awareness for both Zoopla and uSwitch.’[1]

‘We also made good progress on our continued product differentiation with the launch of an innovative new Move Planner tool which provides a one-stop shop for all moving related services and are pleased to announce today a strategic investment in Zero Deposit, a new business seeking to transform the lettings market by providing an alternative to tenant deposits,’ he continued.[1]

‘We remain incredibly excited by the underlying growth across each of the business divisions, our recent acquisitions and the significant cross-sell opportunities to our highly engaged consumer audience and our unrivalled partner base,’ he concluded.[1]

[1] https://www.estateagenttoday.co.uk/breaking-news/2017/5/zoopla-reports-big-surge-in-agents-and-listings-in-past-six-months

UK property values to increase by 1% in 2017

Published On: May 24, 2017 at 9:35 am

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Categories: Property News

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A new piece of analysis suggests that UK property price growth will amount to just 1% during 2017, as the slowdown since summer 2014 continues.

In central London, where the slowdown has been more prominent, prices are predicted to fall slightly over the course of the year. Looking ahead however, values here could rise by 14.2% by 2022, according to the research from international real estate firm Knight Frank.

Property Price Rises

The firm’s research indicates that prices will rise across Britain by 2.5% in 2018, 3% in 2019 and 2020 and by 4% in 2021.

In the capital, with prices falling by 1% this year, values are expected to rise by 2% next year, 2.5% in 2019, 3% in 2020 and 5.5% in 2021.

Rents are forecasted to continue their steady rise – increasing by 1.4% this year, 2% in 2018-2021 to reach a cumulative 9.8%.

However, the report highlights the uncertainty surrounding the performance of the UK property market, such as Brexit and the slowdown in economic growth.

UK property values to increase by 1% in 2017

UK property values to increase by 1% in 2017

New-Builds

A recent slowdown in market activity can be attributed to a lack of available properties to purchase, which in turn has put more focus on the delivery of new-build homes across the UK.

Data from the Department of Communities and Local Government (DCLG) indicates that the number of new properties being built over recent years has increased. This said, levels are still way below those required to meet current demand.

The report reads: ‘The shortage of housing stock available to buy coupled with ultra-low mortgage rates have put a floor under pricing across the UK, but the question of affordability is becoming more pressing in some areas, especially as lenders still expect sizeable deposits from buyers.’[1]

‘As the UK moves closer to Brexit, any economic uncertainty could have a knock-on impact on the housing market, especially if wage growth and employment levels across the country are affected.’[1]

[1] http://www.propertywire.com/news/uk/uk-property-prices-set-grow-just-1-2017-recover/

 

Buy-to-let investors set to look North

Published On: May 24, 2017 at 8:59 am

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Fresh research from the Legal & General Mortgage Club has revealed that a number of brokers believe that the North of England will become a hotspot for landlords over the course of the next year.

Those brokers attending the Legal & General Mortgage Club’s recent buy-to-let forum event were quizzed on the development of the buy-to-let market. This followed the series of legislation changes that came into force in the last twelve months.

Streamlining

As a consequence of the legislation changes, 69% of brokers feel that landlords will look to streamline their portfolios. Many will look to sell properties with lower yields, while 45% feel that buy-to-let investors will turn their attention to university towns and student accommodation.

Jeremy Duncombe, Director at the Legal & General Mortgage Club, observed: ‘Over the past 12 months, the buy-to-let market has experienced a myriad of legislative changes. Today’s research from Legal & General Mortgage Club’s inaugural buy-to-let forum shows one of the impacts of these developments, with developers looking North for value. Landlords are resourceful and this demonstrates the resilience of the market, despite many changes.’[1]

Buy-to-let investors set to look North

Buy-to-let investors set to look North

‘The last year has been a particularly challenging year for buy-to-let. The Stamp Duty hike, coupled with the changes to tax and the PRA legislation affecting landlords with four or more properties, has undoubtedly impacted the purchase market in particular. However, it is reassuring to see that confidence in this essential tenure remains as landlords respond and adapt to this new landscape,’ he added.[1]

This report marries up with a separate one from Barclays released yesterday, which again highlights northern locations as the most popular for investors moving forwards.

[1] http://www.propertyreporter.co.uk/landlords/the-north-predicted-to-become-a-btl-hotspot.html