Posts with tag: Buy-to-Let

HMO’s outperform BTL investment in North West

Published On: August 18, 2015 at 4:53 pm

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New research into the North West housing market has shown that HMOs are outperforming single occupancy buy-to-let investments.

A survey conducted by The Mistoria Group suggests that this is leading to further investment in student HMOs in the region.

Young gains

Analysis comparing HMOs rented out to young professionals against standard single occupancy buy-to-let properties, equities, commercial property and cash, shows that HMOs were by far the best performer during the last four years.

Data from the Mistoria report shows HMO’s rented to young professionals and students returned 122% in equity between 2010014. This was in comparison to 77% for a standard buy-to-let property, with a 75% LTV mortgage.[1]

Since 2010, there has been a growing number of investors obtaining HMOs in the North West area. Investment in these types of property has risen by 89% over the previous four years. A £1,000 investment in HMO’s in 2010 would have risen by £2,220 by 2014. For a BTL property, this would have only reached £1,770.[1]

In addition, the average gross rental yields between 2010-2014 for HMO’s in the North West were 14%, in comparison to 9% for a standard buy-to-let property.[1]

Returns

‘HMO’s in the North West provide excellent returns and are clearly outperforming BTL investments,’ stated Mish Liyanage, Managing Director of the Mistoria Group. ‘We have experienced a sharp increase in demand from investors looking to acquire HMO’s for professionals and students.’[1]

HMO's outperform BTL investment in North West

HMO’s outperform BTL investment in North West

Liyanage said that an investor can currently, ‘buy a four bed HMO in a good location for students and professionals, fully refurbished and furnished and tenanted for the coming year, for less than £150,000 in the North West based on 2015 prices.’ She believes that, ‘Investing in student HMO accommodation offers a long-term investment option, as the property is highly likely to be in constant demand throughout the calendar year.  Typical rents are significantly higher for student properties, than a comparable buy-to-let property in the same city.’[1]

Concluding, Liyanage said, ‘A key driver for the rise in demand for HMO student property is partly down to the huge growth in student numbers over the last few years. According to UCAS, the domestic student population is continuing to expand, with an expected all-time high of 500,000 applications this year.’[1]

[1] http://www.propertyreporter.co.uk/property/north-west-hmos-outperform-btl-investments.html

 

Landlords struggling to obtain BTL finance

Published On: August 17, 2015 at 10:37 am

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A new investigation suggests that a lack of buy-to-let finance is proving a stumbling block to more than 10% of UK landlords. This comes despite the fact there are over 900 buy-to-let mortgages available on the current market.

The survey conducted by online agent Property Let By Us shows that the inability to get finance is preventing many landlords from expanding their portfolios.

Difficulty

Data from the report indicates that one in ten landlords had difficulty in securing a buy-to-let mortgage over the last year. However, 82% of landlords have had success in obtaining a mortgage over the same period.

Alarmingly, the survey suggests that nearly 80% of landlords have reported rent arrears, with nearly a quarter serving an eviction notice, with 7% of disputes ending up in court. More positively, void periods have decreased as demand continues to accelerate.[1]

‘While the booming buy to let market looks like good news for landlords, the real picture is not so rosy,’ observed Jane Morris, Managing Director of Property Let By Us. ‘Spiralling rents are great news for yields, but the down side is that it brings with it a higher risk of rent arrears,’ she continued.[1]

Morris went on to say that, ‘securing finance also looks like it is going to get tougher for landlords. A new high street crackdown now means landlords will need a bigger deposit and face tighter checks for a buy to let loan. High street lenders are introducing strict criteria in a crackdown on the buy to let boom, which is feared to be pushing up house prices across the UK.’[1]

Landlords struggling to obtain BTL finance

Landlords struggling to obtain BTL finance

Falls

In addition, Morris feels that, ‘the amount landlords will be able to borrow is expected to fall by thousands and they are likely to face new tough lending criteria to secure a buy to let loan. Landlords must also prove that they are not wholly reliant on their rental income and that they will also be able to cope with void periods and any repairs to the property.’[1]

Many lenders are introducing new affordability checks, which see landlords having to answer tough questions on how much they spend on household bills and features such as childcare, before they get a loan. Some lenders also refuse loans to people dependent solely on a rental income, with some expecting applicants to have an income of at least £25,000 a year from other sources.

Concluding, Morris said that, ‘landlords need to thoroughly research lenders and ensure they meet the lending criteria before applying for a mortgage.’[1]

[1] http://www.propertywire.com/news/europe/uk-buy-let-finance-2015081710869.html

 

Newcastle Building Society joins BTL market

Published On: August 14, 2015 at 12:29 pm

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Newcastle Building Society has today announced that it is to move into the Buy-to-Let market, with a range of products.

The Newcastle will work closely with The Business Mortgage Company, who will take on the role of liaising directly with brokers and then submit cases back to the building society on their behalf.

Products

Available to all brokers, the products will include market-leading rates and also a variety of short or long-term fixed or heavily discounted alternatives. The products have a free-valuation and come with a range of either fixed or percentage based fees. This will allow borrowers to decide on the product that suits them better and which is the most cost effective.

In addition, Newcastle Building Society will pay the packaging fee for all applicants, which is normally between £250-£299.

Products available include a two-year discounted deal at 2.49%, which comes with a £999 completion fee a maximum LTV of 75%. Alternatively, there is a two-year fixed rate deal available at 2.35%, again with a maximum LTV of 75% but with a 2.5% completion fee.[1]

For those after increased security, there is also a five year fixed rate deal at 3.89%, with a £999 completion fee and maximum LTV of 75%.[1]

Newcastle Building Society joins BTL market

Newcastle Building Society joins BTL market

Partnership

‘We are excited about entering the buy-to-let market which continues to perform strongly and we’re also delighted to partner up with the BTL experts TBMC,’ said Steven Marks, Corporate Development Executive at The Newcastle. ‘This new range adds to our competitive portfolio and enables us to support our brokers further. This development comes at a time when NBSIS has invested in the management of our intermediary relationships, as well as our service and systems, all of which are key priorities for us and come at an exciting time when we are building our intermediary business.’[1]

Andy Young, chief executive officer at The Business Mortgage Company said, ‘we are delighted to be working with Newcastle Building Society and look forward to helping develop and distribute its buy-to-let mortgage offering. Young went on to say that it is, ‘great to see another buy-to-let lender entering the marketplace, offering even wider choice to landlord clients. Newcastle’s new buy-to-let range has some competitively priced products starting a 2.35% and also includes a 5 year fixed rate option, which are becoming more popular with landlords. The free valuation will also be attractive to those looking to reduce upfront costs.’[1]

[1] http://www.propertyreporter.co.uk/business/newc4stle-bs-enters-btl-market.html

 

 

Landlords to be affected by removal of allowance

Published On: August 13, 2015 at 11:58 am

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Gove’s cladding plans are ‘based on lazy and false assumptions’, says NRLA

Findings from an investigation by the National Landlords Association suggest that 47% of landlords will be affected by the abolition of the annual wear and tear allowance.

Changes

Under the changes, the government will scrap the allowance, which is available for furnished properties only. In its place will be a tax relief system that will enable all landlords to subtract costs they incur on replaying furnishings in their property.

Currently under consultation until the 9th October, the new proposals are earmarked to come into force from the 6th October 2016 for income tax purposes. This will changed to 1st April for corporation tax.

The new scheme will cover the price of replacing furniture, appliances and furnishings provided for tenants, which include:

  • televisions
  • movable furniture
  • fridges and freezers
  • carpets and flooring
  • curtains
  • crockery
  • cutlery
  • linen

Investigation

Research from the National Landlords Association shows that 24% of landlords let their properties fully furnished. 22% let a mixture of furnished and unfurnished property, with 53% letting their properties on an unfurnished basis.[1]

Landlords to be affected by removal of allowance

Landlords to be affected by removal of allowance

Chris Norris, head of policy at the National Landlords Association said, ‘we fully understand the frustration of those landlords who let exclusively on a furnished basis as the removal of this allowance will very likely represent a reduction in the relief they can claim.’[1]

‘However, it will come as a welcome revision for those letting a mixed portfolio, unfurnished, or part-furnished property as the replacement system will allow them to deduct legitimate revenue expenses in the future,’ he added.[1]

Concluding, Mr Norris said that, ‘the NLA has broadly welcomed these proposals as it should lead to a fairer system for more landlords. However, as we transition from one system to another, we will push to make sure that any landlords who’ve made recent investments with the expectation of offsetting the cost over a number of years using the current allowance, will not be disadvantaged. [2]

[1] http://www.propertyreporter.co.uk/landlords/removal-of-wear-and-tear-allowance-will-affect-half-of-landlords.html

[2] https://www.landlordtoday.co.uk/breaking-news/2015/8/half-of-landlords-affected-by-removal-of-wear-and-tear-allowance

 

New web portal makes good start

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

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Less than six months six its official launch date, a web portal which changes the way investors browse for their next property has already signed up 5,000 agents.

Taking two years to develop, Pring.co.uk has already gained interest from estate agents across Britain, who have uploaded in excess of 30,000 properties onto the site.

Success

Pring.co.uk was founded and developed by entrepreneur Stephen Moss, who began his career in an estate agency before co-founding a number of other businesses, including Legal 4 Landlords, based in Warrington.

For the first-time, Pring.co.uk allows its users to browse for investment properties which meet their requirements by using a range of different selection criteria. These includes:

  • location
  • purchase price
  • rental value
  • mortgage cost
  • potential yield
  • return on investment
New web portal makes good start

New web portal makes good start

More than 5,000 agents from across Briton have uploaded their properties and the site is getting more than 100,000 visits per month. The site has been launched at a particularly good time for the buy-to-let sector, with one in five British homes now owned by private landlords.

Gap in the market

Mr Moss commented that, ‘there was a clear gap in the market for a search portal dedicated to investment properties. I was hearing the same issues from property investors time and time again. There was nowhere they could go to search for suitable investment properties in one place without spending hours and hours going through each property in a given location and working out the figures. Pring brings together all the figures an investor needs before deciding whether a house is worth viewing,’[1]

‘We’ve developed the site to make sure it provides everything the property investor needs. They can look for properties in a specific area that give a particular return on investment and see immediately what the mortgage cost will be,’ Moss added.[1]

[1] http://www.propertyreporter.co.uk/business/new-property-investment-portal-attracts-5000-agents.html

 

 

 

Mortgage Trust updates BTL products

Published On: August 10, 2015 at 1:03 pm

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Mortgage Trust has today become the latest firm to update its buy-to-let product range, by keeping some of its most popular fixed-rate deals, while introducing a number of fresh initiatives.

Deals

Within its new rates, Mortgage Trust is offering three-year deals at 75% LTV, giving customers the choice between an initial rate of 3.25% with a 2% fee, or 3.65% with a £999 fee.[1]

In addition, Mortgage Trust has a number of fixed-rate products with two, three and year deals, with a significant range of fee and rate options. What’s more, all products include free valuation but are subject to a £150 application fee.

John Heron, Director of Mortgage Trust, commented, ‘we have extended the availability of some of our most popular fixed rate products and added further options for landlords with a medium term planning horizon. Fixed rate products provide landlords with an opportunity to fix a key element of their cost base and maintain a stable rent environment for their tenants.’[1]

‘We expect many landlords will be reviewing their finance options closely as a base rate rise moves closer,’ Heron added.[1]

[1] http://www.propertyreporter.co.uk/finance/btl-products-upd4ted-at-mortgage-trust.html