Written By Em

Em Morley

Majority of Landlords are Part-Timers with Just One Property

Published On: August 10, 2016 at 9:59 am

Tags: limited companies,mortgage interest tax relief,part-time landlords,private landlords,property portfolio

The majority of private landlords in England only run their lettings businesses part-time and own just one rental property, according to new research.

The survey, by the Council of Mortgage Lenders (CML) along with specialist lender BDRC and the London School of Economics, updates the findings from a similar study in 2010.

Majority of Landlords are Part-Timers with Just One Property

Six years later, the survey reveals there is almost no change in the number of landlords whose main occupation is not managing their property portfolios.

Back in 2010, 92% of landlords were part-timers, rising to 95% today.

Similarly, the proportion of landlords operating as individuals, rather than limited companies, is virtually unchanged. Six years ago, 89% of landlords managed their portfolio as an individual or couple, dropping slightly to 87% now.

This decrease may be a result of new tax relief changes that are due to be introduced in April 2017. From this date, the amount of tax relief that landlords can offset against mortgage interest payments will be cut to the basic rate.

However, limited companies will be exempt from the changes, which has prompted a move to this type of business structure. Find out more about the mortgage interest tax relief changes here: /mortgage-interest-tax-relief-changes/

Additionally, the survey highlights a move towards larger property portfolios.

Although the majority of landlords still own just one property, the proportion has dropped significantly since 2010, from 78% to 63%.

At the same time, the amount of landlords managing two to four properties has grown from 17% to 30%.

However, most landlords (90%) earn less than half of their income from their rental properties, which is almost unchanged since 2010. Does this suggest that the buy-to-let sector is becoming less lucrative?

With many recent legal changes affecting landlords, such as the new Stamp Duty surcharge, landlords must consider whether investment in the private rental sector is a viable option.

However, the CML does point out that the 2016 survey was only conducted in England, while the 2010 study covered the whole of the UK.

Monthly UK house price values fall, despite increased sales

Published On: August 10, 2016 at 9:43 am

Author: Em Morley

Categories: Property News

Tags: house price values,property sales,residential property,transactions

Values of residential property in Britain fell by 0.9% month-on-month in July, according to new research from Haart.

This is a surprise given a good month of property sale transactions.

New buyers

The number of new buyers in the market actually increased during the previous month in Britain. This in turn aided a 6.5% month-on-month rise in property transactions. Many buy-to-let investors are now feeling confident to press ahead with transactions following the result of the EU referendum.

Despite this rise in transactions, results from the investigation show that UK house price values slipped to an average of £233,254.

A number of factors could have contributed to this decline. Many buy-to-let landlords have been detracted by the 3% additional stamp duty surcharge imposed in April.

Monthly UK house price values fall, despite increased sales

Pressing ahead with purchases

Paul Smith, CEO of Haart, said, ‘despite last month’s political turmoil, it seems buyers aren’t being deterred by the noise. We’ve actually seen a bounce in transactions in July, with a lot of buyers pressing ahead with their purchase now that the referendum is over.’[1]

‘Prices have dropped slightly by 0.9% across the UK and have fallen 5.6% in London, showing that sellers are cutting deals to bypass the uncertainty in the wider economy and plucky buyers are taking advantage. Nevertheless, prices in London and across the UK both remain significantly higher than they were at the same time last year,’ he continued.[1]

Understandably, uncertainty is still prominent given the decision to leave the European Union. However, Smith believes the cut in interest rates will see mortgage rates fall further, meaning, ‘it won’t be long before the market bounces back.’[1]

‘The desire for people to own their own home or move up the ladder is as strong as ever and we have every reason to be confident about the property market’s long-term prospects. The only thing we have to fear post-Brexit is fear itself,’ Smith concluded.[1]

[1] https://www.propertyinvestortoday.co.uk/breaking-news/2016/8/uk-home-prices-fall-despite-pick-up-in-sales-momentum

Which University locations get top marks for investment?

Published On: August 10, 2016 at 8:48 am

Author: Em Morley

Categories: Landlord News

Tags: Buy-to-Let,investment in student property,student landlords,University,University towns and cities

New research has revealed the most lucrative university cities in Britain, based on property price, rents and house price growth.

Leading London estate agent Chestertons also looked at average property values and typical graduate income in order to ascertain their leaderboard.

Top of the class

According to the analysis, Edinburgh received top marks for being the best university city in which to invest. Also receiving A grades were Bristol and Brighton.

At the bottom of the class were Aberystwyth, Liverpool and Lancaster. This was due to more affordable rents and reduced house price growth.

With the new academic year fast approaching, the league table makes interesting reading for potential windfalls from buy-to-let investment at university towns and cites in the UK.

The top-ten towns and cities providing the best investment opportunities were found to be:

Edinburgh
Bristol
Brighton
Reading
Oxford
York
Cambridge
St Andrews
Southampton
Warwick

Which University locations get top marks for investment?

Reliable demand

Daniel Killick of Chestertons, noted, ‘student lets are generally seen as great investment; there will always be a reliable level of demand and universities can often be really helpful in pointing students your way. Some locations, however, offer a better return than others. We were keen to get some deeper insights into the UK’s student property market and understand where the most attractive prospects are-and the ones that are less likely to pay off.’[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2016/8/top-class-university-cities-for-buy-to-let-property-unveiled

London Olympics’ Legacy Lives on Through Housing

Published On: August 10, 2016 at 8:34 am

Author: Em Morley

Categories: Property News

Tags: house prices,housing crisis,London,London property market,Olympics,Stratford

The London Olympics’ legacy continues to live on through the housing market, according to the latest research by hybrid estate agent eMoov.co.uk.

The firm found that since the London Olympics in 2012, property values in Stratford’s Olympic Village have shown greater strength than prices across the capital as a whole.

London Olympics’ Legacy Lives on Through Housing

Having been originally built to accommodate those competing in the Games, the Olympic Village has since been designated its own postcode (E20) and utilised as a residential complex, helping to tackle the capital’s housing shortage.

Although many cities have seen their Olympic legacies fade, it was widely believed that London would continue to benefit from the extensive regeneration it experienced ahead of the 2012 event. But what benefit, if any, has this regeneration brought to the London housing market?

The average property price in Stratford’s Olympic Village is now £459,199. Although this is significantly lower than the London average of £550,000, prices have soared by a huge 43% in the E20 postcode since the complex’s construction.

Over the same period, the London market as a whole has seen an average increase of 38%, despite widespread inflation as a result of high demand and a chronic lack of housing stock.

In England, the average house price rise was even lower, at 24%, taking the typical property value to £257,567.

Those that purchased property in the Olympic Village certainly seem to have won gold when it comes to housing; not only has house price growth outpaced the rest of the capital, property values are much more affordable than in London as a whole.

The founder and CEO of eMoov, Russell Quirk, says: “It goes to show that regardless of whether you thought the London Olympics was money well spent or not, the regeneration of what was essentially an east London wasteland has helped to breathe new life into the area where property is concerned.

“Yes, the area may have benefitted more so because of the Games, but we’re now four years on and the Olympic Park has seen a larger property value increase than the capital as a whole. That’s no coincidence. What has been done with Stratford should be an example that we should look to replicate right across London.”

With such potential for substantial capital growth and affordable house prices, could Stratford be your next investment spot?

New housing minister supports longer tenancies

Published On: August 9, 2016 at 11:03 am

Author: Em Morley

Categories: Landlord News

Tags: buy-to-let landlords,Garvin Barwell,private rental sector,tenancy agreements

New Housing Minister Gavin Barwell has pledged his support to the concept of longer tenancies for renters in the private rental sector.

Responding to a question in the House of Commons for Conservative Julian Knight, MP for Solihull, Mr Barwell said he was looking into how to make longer tenancies more accessible to tenants.

Encouragement

Barwell said, ‘My department (the DCLG) has developed a model tenancy agreement for use by landlords and tenants in the private rented sector, which encourages longer-term tenancies for those who want them. We are working with the sector to actively promote the use of this and to identify any barriers. We have also established a working group, focussed on affordability and security in the private rented sector, which will look at what more we can do to help people who require longer tenancies to get them.’[1]

New housing minister supports longer tenancies

The concept of longer tenancy agreements has been discussed in the Commons previously. In 2013, it was announced that the Government was to introduce new measures to encourage longer-term, family orientated tenancies in the sector.

A recent report revealed that the average tenancy agreement for residential property in England stands at just 18 months. This indicates that tenants are looking at a shorter-term view of renting property.

More pleasingly, the report showed that landlords’ typical annual void periods currently stand at 22 days.

[1] https://www.lettingagenttoday.co.uk/breaking-news/2016/8/housing-minister-says-he-backs-long-private-rental-tenancies

Accord Cuts Rates on its Entire Fixed Buy-to-Let Range

Published On: August 9, 2016 at 10:34 am

Author: Em Morley

Categories: Finance News

Tags: buy to let mortgages,buy-to-let finance,mortgage rates,remortgaging

Accord Buy to Let has reduced rates on its entire fixed rate buy-to-let range by up to 0.3% and has launched new remortgage options on its three and five-year fixed rate products.

Accord Cuts Rates on its Entire Fixed Buy-to-Let Range

The new buy-to-let range from the Yorkshire Building Society Group’s intermediary-only lender includes a new two-year fixed rate deal at 1.94% with a £800 fee available to remortgaging landlords at 60% loan-to-value (LTV), with a free standard valuation and standard legal fees included.

Accord Buy to Let is also offering a three-year fixed rate product at 2.64% at 65% LTV, with an £800 fee. The mortgage comes with £500 cashback on completions for landlords expanding their portfolios, along with a free standard valuation and standard legal fees for remortgages.

The lender has also updated its five-year remortgage deal, available at 3.09% at 60% LTV, with the same £800 fee and a choice of either a free standard valuation and £300 cashback on completions, or a free standard valuation and standard legal fees.

The Commercial Manager at Accord Buy to Let, Chris Maggs, comments: “We have reduced rates across our entire fixed range to ensure we are offering competitive options to suit all circumstances.

“We also hope the added incentives such as cashback on completion and free standard valuations will prove popular with brokers and landlords looking to get the most from a mortgage.”

Many landlords will be seeking the most competitive buy-to-let mortgage deals at this time, as they face tax hikes and new regulations.

As of 1^st April this year, landlords must now pay an extra 3% in Stamp Duty when they purchase a rental property.

In addition, the amount of tax relief that landlords can claim on their mortgage interest payments will be cut from April next year. The change will affect many landlords, as it may push some investors into the higher tax bracket.

Furthermore, landlords must be aware of forthcoming legislative changes regarding energy efficiency. From 2018, all rental properties must have an energy efficiency rating of E or above. One investor has spoken out insisting that the Government should support landlords with these costs.

Take a look at Accord’s updated range to see whether investing further into the buy-to-let sector is viable for you.