Posts with tag: Buy-to-Let

Scottish University cities offer best BTL returns

Published On: September 14, 2015 at 4:12 pm

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New research has found that University cities north of the border give the largest profit opportunities for buy-to-let investors in the UK.

A report from property website Zoopla has found that the 6.11% yield reported in the Scottish capital was the largest return recorded in Britain. In fact, Scottish cities took the third, fourth and fifth places.

Scottish success

Aberdeen came in third, with a return of 5.66%, Dundee fourth with 5.11% and Glasgow fifth with 5.07%. The only English city in the top five was Coventry, ranked second, where the average buy-to-let rental yield was 6.03%.[1]

University cities in the North of England were found to have the worst investment returns for buy-to-let landlords. The lowest rental yield in Britain, just 1.47% was recorded in Middlesbrough, home to the main Teesside University campus.[1]

The second worst performer was found to be Lancaster, where the average yield was 1.87%. Lincoln came in third lowest, with a typical yield of 2.14%. [1]

Interestingly, the report shows that the top cities housing the top performing Universities are not necessarily the best options for buy-to-let investors to gain maximum returns. Cambridge was not even in the top-ten, with an average yield of 3.65%.[1]

London’s famous School of Economics and Imperial College London had a yield of 3.97%, with Oxford fairly better, coming in at 8th on the overall list with a yield of 4.61%.[1]

Great return

‘Scottish university cities are currently offering fantastic returns for UK landlords. Many Scottish universities are now internationally renowned, with thriving undergraduate and graduate environments,’ noted Lawrence Hall of Zoopla.’[1]

Scottish University cities offer best BTL returns

Scottish University cities offer best BTL returns

He feels that, ‘this means demand for rental accommodation in university areas is very high, as throngs of students compete to live near their campuses. Combined with Scottish house prices still remaining relatively low, this equates to excellent yields.’[1]

‘Some may be surprised that the golden triangle of London, Oxford and Cambridge are not producing higher yields. However, given those areas have a pedigree of high property prices, buy-to-let investors there would likely spend a higher proportion of rental income paying off their properties’ mortgages than their counterparts north of the border,’ he added.[1]

[1] http://www.propertywire.com/news/europe/uk-universities-buy-let-2015091410976.html

 

 

Kent landlord hit with £32k fine

Published On: September 11, 2015 at 3:00 pm

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Landlords more worried by Section 21 reform than Stamp Duty or loss of tax relief 

A landlord from Kent has been severely fined for breaches in Gas Safety legislation in each of his five properties.

Medway Magistrates’ Court heard that as a result of a joint intervention by Medway Council Housing Officers and the Health and Safety Executive, statements were collated from various tenants of the landlord, Nitin King.

Hefty fines

Mr King, of Bredgar, Sittingbourne, was fined £32,000 and told to pay £4,560 in costs, after pleading guilty to four charges to breaches of Regulation 36 (3) of the Gas Safety Installation and Use Regulations 1998.

It was not the first time that Mr King had appeared in court. In March this year, he appeared in front of magistrates after it was discovered that he had left tenants living in a house in Luton Road, Chatham, with hazardous steps and stairs.

Kent landlord hit with £32k fine

Kent landlord hit with £32k fine

He appeared at the same court and pleaded guilty to five counts of failing to comply with an improvement notice. King was fined £11,000, alongside costs of £3,050 and £120 victim surcharge.

Shockingly, according to the Medway and Maidstone News, Mr King owns and manages in excess of 250 Medway rental properties.

 

Top places for university property investment revealed

Published On: September 10, 2015 at 2:44 pm

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With the new academic year here once again and with many students returning to University for another semester full of hard ‘work, leading online estate agent eMoov.co.uk has uncovered the best locations to invest in a student property.

e.Moov’s University Property Index gives each university an index score assessed on how they perform against the average UCAS entry requirement in relation to the typical average property price in the area.

Northern rules

Results from the investigation show that the North of England and Scotland are top of the list, with eight of the top ten scoring universities. A UCAS entry level requirement of 547 points, coupled with an average property cost of £214,735 sees Durham top the list, with an eMoov index score of 102.[1]

Coming in second was Strathclyde with an index score of 96. Manchester took the final podium position with 90, with Edinburgh (89) and Warwick (84) making up the top five.[1]

Nottingham (84), Lancaster (83), Leeds (82), St Andrews (80) and Aberdeen (79) completed the top-ten. However, the soaring prices of property in London has seen its universities fair poorly in the Index. Of 117 universities involved in the study, 15 of the 17 outside of the top 100 are located in the capital.[1]

Just four of London’s universities made it into the top 100, but interestingly, were all awarded a negative index score. The universities were namely Queen Mary’s in 94th place and with a score of -30, the London School of Economics (96th, -37), East London University (96th, -37) and Kings College London (100th, -74).[1]

Bottom of the class

At the other end of the scale, the worst performing University in the Index was the Imperial College London, despite having a large UCAS entry points requirement of 568. The colossal property prices in London SW7 gives the University a cost per entry point of £3,361, 368% more than the study average. This results in an eMoov Property Index total of -309%.[1]

The age-old battle between Oxford and Cambridge saw the former come out on top, ranking at number 13 with Cambridge lagging behind in 19th.

Another survey of 1,000 homeowners from eMoov found that 70% would be interested in buying a solid investment property, if it meant their child could establish themselves on the property ladder.[1]

Top places for university property investment revealed

Top places for university property investment revealed

Costly

‘Sending your kids off to university can be a joyful occasion for many parents and is often the first time they fly the nest to fend for themselves,’ observed Russell Quirk, founder and CEO of eMoov.co.uk. ‘What with the recent increase in university fees and the cost of living, it can also be an extremely expensive time for parent and student alike, as the debt begins to pile up.’[1]

Quirk believes that, ‘this study shows which universities offer the best level of degree, but also an affordable property price, should you want to invest in a house for your child, or even as a uni-let for yourself.’[1]

Concluding, Mr Quirk said that, ‘students are certainly an easy target where the high street letting agent is concerned and it is common practice for agents to strip them of their hefty deposits, for even the most minor of reasons. Not only does buying a university property avoid this but it also provides a future home should they stay in the chosen city for work, or a great money making opportunity renting to future students.’[1]

The top-twenty universities in the Index were found to be:

eMoov Index Rank Institution Average House Price Average UCAS Entry Point Property Price Per Entry Point eMoov Uni Property Index
1 Durham  £214,735 524  £      409.49 102
2 Strathclyde  £161,099 476  £      338.16 96
3 Manchester  £126,212 435  £      290.08 90
4 Edinburgh  £203,958 484  £      421.31 89
5 Warwick  £223,314 482  £      463.11 84
6 Nottingham  £138,972 428  £      324.93 84
7 Lancaster  £ 153,591 436  £      352.52 83
8 Leeds  £152,349 431  £      353.23 82
9 St Andrews  £305,294 517  £      590.17 80
10 Aberdeen  £186,733 446  £      418.31 79
11 Newcastle  £ 156,318 424  £      368.41 78
12 Exeter  £222,572 463  £      480.41 77
13 Oxford  £435,590 573  £      760.72 77
14 Cardiff  £167,826 427  £      393.50 76
15 Liverpool  £ 151,077 404  £      374.14 72
16 Dundee  £160,202 410  £      391.21 72
17 Leicester  £ 141,031 386  £      365.37 68
18 York  £ 224,175 437  £      512.63 66
19 Cambridge  £568,495 602  £      944.34 65
20 Teesside  £  58,421 306  £      191.23 65

[1]

[1] http://www.propertyreporter.co.uk/landlords/where-is-top-of-the-class-for-university-property-investment.html

 

 

10% of over 50’s landlords make no profit

Published On: September 9, 2015 at 4:00 pm

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Data from an investigation from Saga Landlord Insurance indicates that 10% of buy-to-let owners over the age of 50 make no profit from their investment.

Although many have gained substantial financial returns from entering the market, a further quarter said they found it tougher than they expected.

Optimism

The poll of 10,141 over 50’s showed that almost 10% are now making the most of the opportunities presented by the buy-to-let market, with reasons for optimism for potential landlords.[1]

Of those landlords surveyed, an average of £700 profit per month from letting a property was recorded. However, one in ten said that they were either just breaking even or running at a loss.[1]

A third of respondents were thought to have entered the market during the past five years and 24% said that they have found being a landlord tougher than they originally thought. 10% said that the buy-to-let business was easier than expected. This could be down to the fact that just 45% of people questioned said that they had purchased a property with the specific intention of renting it out. 14% said that they had inherited the property, with 7% saying that had purchased it for a child or other relative to live in.[1]

Becoming a buy-to-let landlord comes with some daily concerns. The top reasons why landlords worry were found to be renting the property to bad tenants (36%) and managing the property in older years (19%). Another survey from Saga showed that 32% of landlords had experienced issues with tenants not paying rent, 27% had problems with property damage and 11% going as far as taking legal action against their property inhabitants.[1]

10% of over 50's landlords make no profit

10% of over 50’s landlords make no profit

Challenges

Sue Green, Head of Landlord and Home Insurance, Saga commented that, ‘Buy-to-let is an increasingly popular investment for the over 50s, particularly in the current financial climate but clearly it is not without challenges. The recently announced cuts to tax relief for buy-to-let landlords, for example are a new factor that people will have to take into account when deciding whether to start letting a property.’[1]

‘Our research shows that, while landlords are largely positive about their decision, they are also likely to face practical and financial hurdles. This is why we have developed a guide that provides practical advice to landlords, helping to address the most commonly raised concerns and giving them peace of mind so they can focus on enjoying their retirement,’ Green added.[1]

[1] http://www.propertyreporter.co.uk/landlords/10-of-landlords-aged-over-50-make-no-profit.html

 

Landlords to benefit from second charge market?

Published On: September 8, 2015 at 4:54 pm

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New research has indicated that remortgage or further advance customers could benefit from taking out a second charge loan.

V Loans estimates that this could be the case for nearly 10% of consumers.

Opportunities

The secured-lending specialist believes a mix of record law interest rates in the second charge market, coupled with the strong growth of the sector from 2011 gives an indication of the benefits for customers, alongside opportunities for brokers.

In addition, landlords could also be set to benefit from further competition in the buy-to-let second charge market, which could lead to significant price reductions. What’s more, this could make second charge lending a more attractive alternative to remortgaging, which could allow landlords to benefit from the heightened equity within their current portfolio.

On course to hit £750m in lending this year, the second charge market has seen year-on-year growth since 2011. Rates have fallen to record low of 4.05% above base rates, making the case for lenders to take out a second charge, while not causing any detriment to their withstanding mortgage arrangements.

With this said, V Loans predicts that only 50% of advisors promote second charges to their clients and as such is urging advisors to think of the benefits of these loans.

Landlords to benefit from second charge market?

Landlords to benefit from second charge market?

Best interests

‘Remortgaging or taking a further advance is not always in the client’s best interest and therefore it’s essential that all options are considered,’ said Marie Grundy, Managing Director of V Loans. ‘Interest-only customers, those benefiting from lifetime trackers and low fixed rate deals or those who do not want to incur substantial early repayment charges by remortgaging, including landlords who wish to release trapped equity, could all stand to benefit from second charge finance.’[1]

‘The pending alignment of regulation for first and second charge markets will deliver huge opportunities and innovation to the market allowing advisers to provide better customer outcomes. Intermediaries should seriously consider including second charges within their scope of service ahead of the regulatory changes next year,’ Grundy added.[1]

[1] http://www.propertyreporter.co.uk/finance/could-landlords-benefit-from-the-second-charge-market.html

 

Buy-to-let returns rise again in July

Published On: September 1, 2015 at 12:32 pm

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British buy-to-let landlords have been boosted by the news that the private rented sector is continuing to thrive.

Averagely monthly incomes for buy-to-let investors rose substantially during the past month, with data from a report by Your Move and Reeds Rains showing the quickest month-on-month rise since 2009.

Rises

According to data from the investigation, the average rental income per property for landlords has hit £800 per month for the first time. Month-on-month, average rental prices rose by 1.9%, rising from £789 to £809 per month.Year-on-year, a rise of 6.9% was the fastest rate of increase recorded on an annual basis by the firm.[1]

‘Just when you think the rental market is accelerating at full throttle, it finds a way to shift into a higher gear,’ commented Adrian Gill, director of estate agents Reeds Rains and Your Move. ‘We’re seeing rent rises manage to hit record breaking speeds on both monthly and yearly time frames as far back as our data can go.’[1]

Buy-to-let returns rise again in July

Buy-to-let returns rise again in July

A possible reason for the substantial growth at present could be two-fold. Young people are aiding the growing demand for rental property, largely down to the convenience and freedom that renting offers them. Additionally, increased competition amongst tenants, brought about by a lack of affordable housing, has also seen a rise in applications to landlords.

Another rise in rents will give many landlords the incentive to invest more money into further properties and add to their existing portfolio. The threat of an interest rate rise early in 2016 could lead to a surge in activity during the coming months.

[1] http://invezz.com/contributed/equities/19891-Good-news-for-investors-as-UK-rents-continue-to-rise?utm_source=Alert&utm_medium=Email&utm_campaign=buy_to_let_property:31082015&aruid=ODQ5OQ==