Posts with tag: Buy-to-Let

Research highlights North East as buy-to-let hotspot

Published On: September 14, 2021 at 8:37 am

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Nation’s HMOs worth £26bn in current market conditions

A buy-to-let boom is expected in the North East, as it overtakes the North West as the best UK buy-to-let hotspot.

The latest Property Market Forecast from Property Forecaster has found that properties in Washington in Tyne and Wear are most likely to increase in value. Hartlepool, Sunderland and Newcastle also feature in the top ten.

The forecast ranks the top buy-to-let locations using a unique algorithm. Investment properties across England and Wales are given a score from one to ten, with properties rated ‘ten’ being the most likely to increase in value and dubbed ‘Diamonds’. Those locations with the greatest concentration of Diamond properties make up the top ten in the monthly forecast.  

Akhtar Hussain from Property Forecaster comments: “The North East has seen rental demand go from strength to strength. Our data now clearly shows a number of locations in the North East are demonstrating strong promise, both in terms of future gains and the highest yields.

“With average Diamond property prices in Washington, Hartlepool and Sunderland of between £48,000 – £53,000, the North East can’t be beaten for value and offers a very accessible investment opportunity with great future potential.

“Property prices in the North East can only go one way from here – they have already started to rise over the last year and recent inward investment in the area will also support future growth. There has never been a better time for investors to look at what the North East has to offer.

“In terms of the UK wide picture there is still underlying strength in the market despite the reinstatement of Stamp Duty and the pending closure of the furlough scheme. Although there may be a slowdown in the next couple of months due to seasonality, the next 12 months will remain strong overall. The Government has done a fantastic job of preventing a possible housing crash with assistance from the Bank of England reducing interest rates to a record low.

“Our previous predictions that prices would increase in spite of the pandemic, and that Brexit wouldn’t cause a crash in the housing market have been borne out. As the economy recovers over the coming months 2022 continues to look positive for investors.”

Tenant issues sits top of reasons why landlords look to sell in the next five years

Published On: July 29, 2021 at 8:12 am

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One in three landlords could be forced to sell after failing affordability test to remortgage

Despite government changes to Stamp Duty, tax relief, and a potential change to capital gains tax, UK landlords remain undeterred where their investment intentions are concerned, says Sequre Property Investment.

Research from the buy-to-let property investment specialist has found that just 10% of landlords have sold part of their portfolio in the last five years. Just 19% stated they were thinking of selling up in the next five years.

The research also found that the majority of landlords thinking of selling up are doing so because they have become tired of dealing with tenant issues. A close second reason was retirement.

Daniel Jackson, Sales Director at Sequre Property Investment, comments: “Investing in property remains one of the safest options you can make in this day and age and so it comes as little surprise that the majority of landlords remain confident with their investment and have no plans to exit the buy-to-let sector.

“It’s also interesting to see that the Government has failed to intimidate the nation’s landlords, despite a consistent campaign to reduce profit margins and force them out of the sector. In fact, more landlords have decided to leave having grown tired of dealing with tenants than they have because of various government tax changes.

“So, it looks as though the Government will have to actually build some more homes if they wish to address the current housing crisis, rather than rely on hard-working landlords to boost the nation’s property stock levels.”

Landlord survey results

Have you sold part or all of your buy-to-let portfolio in the last five years?
AnswerRespondents
No90%
Yes10%
Do you intend to sell part or all of your buy-to-let portfolio in the next five years?
AnswerRespondents
No81%
Yes19%
What has been the driving factor behind this? (Tick all that apply)
AnswerRespondents
Tired of dealing with tenant issues24%
Retirement23%
Changes to landlord tax relief19%
Increase in stamp duty tax for B2L purchases12%
Investing in a different asset11%
A potential increase in capital gains tax11%

New study reveals the extra value a garden can add to rental yields

Published On: May 21, 2021 at 8:04 am

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Gardens can help sellers during difficult housing market conditions

As demand for homes with gardens has risen due to the pandemic, landscaping material provider Paving Direct has researched the best places in the UK to invest in buy-to-let.

Paving Direct looked at the average price of renting a three-bed home in each city across the country on Rightmove to determine the changes in rental yields.

This research shows that having a garden adds 25% more to the average rent price, but this varies drastically when broken down city by city.

According to the data, the most expensive gardens in the UK are in Bath, with over 43% added to the average rent price.

The top 10 cities where renters are paying the most for gardens

RankCityAdditional Value of garden
1Bath43.13%
2Lancashire34.97%
3Birmingham32.72%
4London27.07%
5Leeds25.02%
6Wolverhampton24.30%
7Reading22.85%
8Newcastle Upon Tyne20.48%
9Norwich19.72%
10Portsmouth19.03%

The research also found the areas where gardens are less likely to impact the rental yield. Properties in Kingston Upon Hull, Sheffield and Leicester ranked bottom of the table.

The 10 cities where gardens add the lowest value

RankCityAdditional Value of garden
1Derby5.44%
2Sunderland5.30%
3Southampton4.78%
4Bradford4.33%
5Northampton3.70%
6Cardiff2.78%
7Liverpool1.65%
8Leicester1.19%
9Sheffield0.75%
10Kingston Upon Hull0.48%

Cass Heaphy, Digital Director at Paving Direct, comments: “Homes in the centre of cities like Bath and Birmingham do not always have a garden, which can drastically increase the price of houses which do benefit from a green space. With the impact of lockdown, we’ve seen demand for paving jump. People have been spending an increasing amount of time in their own homes and want to make the most of their outdoor space.

“The data here shows just how much value a garden can add to a house and why homeowners need to be making the most of their outside space. Likewise, property investors need to be aware of the opportunity cost of upgrading the garden in their properties, as it can add real value, and higher income.

“I think one of the key things to come out of the whole lockdown experience for many people is really valuing their garden. It has underscored our appreciation of all the benefits it provides to happiness, health and well-being. That appreciation is only going to increase demand and therefore, more value, to homes with gardens or outdoor spaces.”

While the data shows gardens add value to homes across the country, the research showed less than a 1% price difference between houses with and without gardens in both Sheffield and Hull.

Daniel Bunting, Estate Agent at Apropos, comments: “From my own stock of managed properties I have noticed that smaller flats and houses with no outside space have received much less interest than usual. Properties with lots of natural light have done well but properties with outside space have seen increases in rent of up to 10% more than equivalent properties without outside space. This is clearly due to people spending more time at home and being restricted on travel.

“We live in a country with high population density so having some outside space to call your own I think is more important here than other countries. Also, we are more limited on suitable weather for being outside so we want to make the most of it when the weather is good.”

View the full report from Paving Direct here: https://www.pavingdirect.com/gardens-and-uk-rental-prices-2021

Survey reveals why landlords have recently decided to invest in buy-to-let

Published On: May 19, 2021 at 9:38 am

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Tenants in England paying council tax bills up to the equivalent of 37.5% of rent

More than a third (34%) of landlords have recently purchased another buy-to-let property (BTL) or intend to buy one within the next nine months, a survey by The Deposit Protection Service (The DPS) and Zephyr Homeloans suggests.

Their poll of over 300 landlords received results suggesting that the ‘opportunity to buy at a discount’ is the most common reason why they recently bought or intend to buy an additional rental property. Other key factors include long‑term investment (35%), Stamp Duty savings (34%) and diversification by either location (26%) or property type (23%).

Paul Fryers, Managing Director at Zephyr Homeloans, comments: “Understanding the purchasing motivations behind professional landlords is an essential factor for Zephyr and our mortgage broker clients.

“It’s equally important to recognise and appreciate some of the challenges landlords have been facing during the past year and how they will affect their current and future applications.

“During the pandemic we saw a significant rise in the use of limited companies to buy and manage property portfolios, and it seems a significant proportion of landlords have made the most of the opportunities provided by the buoyant market conditions we have experienced over the past six months.”

The poll also shows that 43% of landlords have temporarily lowered rent prices during the pandemic to help tenants. 22% said they had refinanced their mortgages since the arrival of coronavirus.

Matt Trevett, Managing Director at The DPS, comments: “Although the buy-to-let market has remained more buoyant than some predicted, the last year has not been without its challenges for many tenants and landlords.

“The survey suggests a large proportion of landlords have been acting to support their tenants, with a significant proportion saying they had temporarily lowered rents during the pandemic.

“A recent survey from The DPS also showed that the pandemic has triggered movement from cities to towns and the countryside, so landlords seeking to rebalance their portfolios may look to make purchases that reflect that trend.”

The survey results also suggested that:

  • Only 7% of landlords have taken a mortgage holiday 
  • 13% of landlords have sold a property during the pandemic 
  • Landlords who did not purchase additional BTL properties over the last year cited ‘declining rental yields’ (51%) and ‘concern about economic stability’ (42%) as their main reasons

Less first time buy-to-let landlords are choosing to invest in London

Published On: March 25, 2021 at 8:52 am

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invest in London

Data from insurance comparison provider Quotezone.co.uk shows a 41% drop in first time buy-to-let landlords in London during 2020 when compared to 2019.

It points out that this decrease is in direct opposition to the rest of the country, which has seen first-time landlords spike as high as 62%.

Greg Wilson, CEO of Quotezone.co.uk, comments: “Alongside the recent news that almost 700,000 Londoners have moved out of the city due to the pandemic, our data shows a 41% drop for first-time buy-to-let landlords in London in 2020 compared with 2019. This contrasts with the rest of the UK, with almost every other region showing a year-on-year increase, which could be to do with buyers taking advantage of the Government’s Stamp Duty holiday. 

“While COVID has created a temporary shopping spree within the housing market, I fear this temporary boost in sales may be short-lived as the economic aftermath of the pandemic is yet to be revealed and the Stamp Duty holiday is due to expire at the end of June. The region-specific data showing a decline in London could be the first signs of COVID-19’s true impact on the city’s property market and a potentially stark warning for the rest of the UK.

“However, while there has been a huge drop in demand for London properties, rental properties haven’t gone untouched by the crisis with many tenants on furlough or facing redundancies and social distancing creating physical barriers to the properties making routine maintenance and repairs difficult. It is perhaps more important than ever to ensure landlord insurance policies are thorough, accurate and up to date so that landlords are fully protected should a claim be needed.” 

Regional statistics from Quotezone.co.uk

Region% change
Yorkshire61.90%
North East34.29%
South East50.75%
London-40.63%
South West27.87%
North West50.00%

Top UK buy-to-let hotspot for 2021 predictions from Fabrik Invest

Published On: January 8, 2021 at 9:35 am

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Top five UK rental hotspots for landlords in 2023

With the English Housing Survey 2019 to 2020 confirming that the private rental sector (PRS) continues to house 19% of England’s households, property investment company Fabrik Invest predicts a strong year for buy-to-let.

As such, the company has put together its list of top UK buy-to-let hotspots for 2021:

Manchester

Fabrik Invest states that Manchester tops the table as a result of its rapidly rising property prices and rents and strong long-term prospects.

Preston

Regeneration schemes are also at the heart of the city of Preston’s appeal, the company analyses.

York

They predict that the Yorkshire and the Humber region will outperform the UK average for house price rises over the coming five years, while the city’s tourism sector will also come into play.

Birmingham

Fabrik Invest comments that Birmingham is another destination that warrants keen attention, thanks to its shortfall of over 30,000 homes by 2031. In particular, the city’s most fashionable location – the Jewellery Quarter – will deliver some exciting investment opportunities this year.

Chatham

Their final UK buy-to-let hotspot prediction is Chatham, due to a combination of substantial local regeneration, swift train journeys into central London, and a rapidly growing population.

The company also believes that the upcoming Stamp Duty holiday deadline will increase competition in the buy-to-let market. Dale Anderson, Managing Director of Fabrik Invest, comments: “The Stamp Duty deadline, Brexit and COVID are going to create some interesting conditions for the UK’s property investment market in 2021. 

“Underpinning all of these is the country’s continued shortfall of housing supply, which creates an inviting marketplace for investors looking to pick up rental properties this year.”

Currency fluctuations as a result of Brexit might also result in some significant overseas interest in UK property investment. Anderson comments: “If the pound falls as a result of the UK parting ways with the EU, we’re likely to see a surge in investment from overseas buyers looking to take advantage of suddenly being able to get more for their money.

“The UK remains a preferred investment destination for buyers from a wide range of other countries, many of whom will be keeping a close watch on exchange rates throughout 2021.”