Posts with tag: Buy-to-Let

House price growth in the UK slows again

Published On: February 24, 2017 at 12:22 pm

Tags: Buy-to-Let,house prices,housing market,landlords

Residential house price growth in the UK continues to slow across many regions, lead by the capital, according to the latest Hometrack UK Cities House Price Index.

The report shows that annual home price inflation has slipped to 6.4%-the lowest level for 42 months. This is perhaps unsurprising given the fact that property values in the capital have risen by 85% since 2009.

Slowdown

Slower market conditions in London have led to a slowdown in the headline rate of growth for the Index. This is now running at 6.9%, down from 7.2% last month and from 7.9% one year ago.

This 20 city average now stands at £245,900, a fall from £244,300 recorded last month. Bristol remains the fastest growing city in the Index, with annual growth here staying at 9.5%.

Away from the South, Manchester saw the largest increase in prices, up 8.3% year-on-year. Birmingham and Liverpool have also seen significant increases, with affordability remaining attractive.

Richard Donnell, Insight Director at Hometrack, noted: ‘Growth in London has been superseded by large regional cities such as Manchester, Liverpool and Birmingham. When you consider that house prices in London are 85% higher than they were in 2009 it is not surprising that the pace of increases is slowing toward a standstill as very high house price increases mean affordability is stretched.’[1]

House price growth in the UK slows again

Contrast

Continuing, Donnell said: ‘The contrast with large regional cities outside of London and the South East couldn’t be starker. They continue to register robust levels of house price inflation in excess of 7%. The question is how much further house prices in regional cities could have to run were house prices to fully price in low mortgage rates supported by rising incomes and employment.’[1]

‘In our view there is material upside for house prices in the coming years in many cities where the recovery since 2009 has been limited. Typically those where there is investment in employment, infrastructure and regeneration will help stimulate the local economy. The timing and scale of future house price growth will, of course, depend upon the outlook for jobs, incomes and mortgage rates,’ he concluded.[1]

[1] https://www.propertyinvestortoday.co.uk/breaking-news/2017/2/uk-house-price-growth-continues-to-slow

Rightmove saw an extremely profitable 2016

Published On: February 24, 2017 at 10:29 am

Author: Em Morley

Categories: Property News

Tags: Buy-to-Let,landlords,marketing,property,Rightmove

Yearly figures released by Rightmove for 2016 show that the portal achieved a record number of advertisers and traffic.

Data shows that agency and new homes customers rose by 2% in the course of the year to 20,121. In addition, Rightmove said that one million UK residential properties were advertised during the year, which it claims is one-third more than any other portal.

Growth

In its trading statement, the portal said that it saw strong traffic growth in 2016, with a 10% rise in visits. There are an average of 120 million visits per month, in terms of ‘time on site.’

Revenue was 15% up year-on-year, while operating profit rose by 18% and basic earnings share increased by 21%.

Rightmove saw an extremely profitable 2016

What’s more, Rightmove was ranked by Forbes as the worlds most innovative growth company, following the launch of a new marketing tool.

Commenting on the figures, Nick McKittrick, Chief Executive Officer of Rightmove, said: ‘Rightmove continues to be the place that home movers turn to first, with nearly 1.5billion visits in 2016, up 10% on last year. Our continued innovation and audience growth is delivering even greater exposure for our customer’s brands and properties.’[1]

‘We are adding further value through our data, advertising products and productivity tools and by building closer relationships with customers to support their ambitions. With consumers and customers becoming increasingly digital our clear market leadership coupled with the value of our products and data positions us well for the future,’ he added.[1]

[1] https://www.estateagenttoday.co.uk/breaking-news/2017/2/rightmove-reveals-more-agents-more-visits-and-more-profits-in-past-year

Importance of inventories highlighted by AIIC

Published On: February 22, 2017 at 10:30 am

Author: Em Morley

Categories: Landlord News

Tags: Buy-to-Let,inventory,landlords,rental market,tenants

The Association of Independent Inventory Clerks has moved to further underline the importance of professional inventories.

In light of the host of tax changes, the AIIC says inventories can save landlords money at an expensive time for investors.

Costly

From April, mortgage interest tax relief for landlords is to be phased out and with letting agents’ fees to be banned in 2018, the next two years could be extremely costly for landlords.

Chair of the AIIC, Patricia Barber, noted: ‘ It’s clear that while the private rental sector remains a strong investment option-with high tenant demand and the opportunity to generate strong yields-Government intervention in recent years has made the prospect of being a landlord more expensive.’[1]

Barber stresses this is why it is so important that landlords ensure they are covered when it comes to damage to their property caused by tenants.

In addition, she reminds landlords and agents acting on behalf of them that an inventory is vital in confirming the condition of a property at the conclusion of a tenancy. This will make it clear if any deposit deductions will have to be made.

Importance of inventories highlighted by AIIC

Difficulties

Those without an inventory at their disposal at the end of a tenancy will find it difficult to claim back funds should there be any damages or lost items.

Concluding, Barber said: ‘During a period when letting property is becoming more complicated, not providing an inventory could prove damaging to the landlord’s investment.’[1]

[1] https://www.lettingagenttoday.co.uk/breaking-news/2017/2/fees-ban-highlights-need-for-professional-inventories–claim

Longer-term tenancies are increasing

Published On: February 21, 2017 at 9:45 am

Author: Em Morley

Categories: Landlord News

Tags: Buy-to-Let,landlords,rental market,tenants

An interesting piece of research sure to please buy-to-let landlords suggests that four in ten tenants expect to be renting for up to a decade.

The survey was commissioned by property and construction consultants McBains Cooper and is sure to give the build-to-rent market a shot in the arm.

Rental Accommodation

Quizzing over 2,000 people, the survey revealed that one in four people devote over 40% of their income towards funding rental accommodation.

In addition, the study showed that renters look for more traditional factors when choosing a rental property, such as size of rooms, affordability and outdoor space. These factors were found to be more important than shared amenities such as sports facilities or communal room.

Michael Thirkettle, chief executive of McBains Cooper, noted: ‘Our survey shows that renting for the longer term is becoming more common. For some it might be because they are priced out of the housing market, for others, it may also reflect a more continental attitude where people are content to rent rather than buy. Either way, the potential for PRS and build-to-rent is clear.’[1]

‘The findings will be of particular interest to investors and developers in the PRS and build-to-rent sector. Interestingly, a high proportion of the older generation are now long-term renters. This might reflect the more ‘traditional’ characteristics in terms of the most important factors people look for when choosing rented accommodation – such as room size and a garden or outdoor space, as opposed to amenities like sports facilities or a cinema and internal communal spaces,’ he continued.[1]

Longer-term tenancies are increasing

Rising Demand

Further analysis from Savills suggests that demand for rental properties will increase by over one million households during the next five years, despite Government measures intended to help more buyers get onto the ladder.

The Government has set a target of building 400,000 new affordable homes for sale over the course of this current parliament. However, Savills forecasts that Britain will require an extra 220,000 homes for rent per year.

Susan Emmett, director of residential research at Savills, said: ‘Demand for rented homes could still rise more sharply than we have forecast. Government policy should focus on supporting the development of new homes to rent as well as to buy.’[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2017/2/increase-in-long-term-rentals

Santander to get rid of controversial mortgage clause

Published On: February 20, 2017 at 11:09 am

Author: Em Morley

Categories: Finance News

Tags: Buy-to-Let,landlords,mortgage clause,Santander

After much controversy, Santander has said it is going to scrap its buy-to-let mortgage contract clause, that requests landlord to increase rents by, ‘as much as can be reasonably achieved’ where possible.

This controversial wording was exposed last month by Mortgage Strategy, after a private landlord has spotted the clause in her mortgage contract. It appears that the clause has been in Santander’s contracts for nearly six years.

Wording

The landlord in question noted: ‘The public views landlord as greedy, but how many people are aware that landlords are being forced to increase rents by banks such as Santander?’[1]

‘The Santander contract states that when rents are up for renewal the landlord must get written advice from a qualified valuer (as to) whether the market rent at the date of the review is likely to be higher than the rent currently payable.’[1]

Unsurprisingly, the clause has been slammed by leading industry figures.

Santander to get rid of controversial mortgage clause

Ray Boulger, senior technical director at John Charcol, observed: ‘This doesn’t square very well with the best interests of consumers.’[1]

Meanwhile, Lucy Hodge, managing director at Vantage Finance, called Santander’s clause as: ‘excessive and disproportionate’, stating she could not see: ‘any sense in it whatsoever.’[1]

Last week, a Santander spokesperson stated that the policy was under review, but said, ‘it is for the landlord to set a rent that both they and the tenant agree upon.’ Now however, the bank has moved to drop the clause altogether after acknowledging that, ‘it can be misunderstood.’[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2017/2/santander-tells-landlords-to-raise-rents-by-as-much-as-can-be-reasonably-achieved

Investigation exposes level of lost deposits

Published On: February 20, 2017 at 10:08 am

Author: Em Morley

Categories: Landlord News

Tags: Buy-to-Let,deposit schemes,landlords,tenancy deposits

A new BBC investigation has examined the problem of money disappearing from insurance-based Tenancy Deposit Schemes.

The investigation features input from long-time renting reform campaigner Ajay Jagota, whose own research revealed that landlords and letting agents took more than £1m from these schemes in 2016.

Deposit Schemes

£2.4bn of the UK’s £3.2bn tenancy deposits are held in these schemes, whereby deposit money is handed over by tenants and kept by landlord or letting agents.

The BBC programme looks at the case of Cornwall letting agency Premier Property Management, which owes clients over £35,000 in deposit money. At time of broadcast, the firm was listed as a member ARLA Propertymark, the regulatory body designed to: ‘Reassure all of those renting and letting out property that agents who display the Propertymark Protected logo offer better protection for their clients.’[1]

However, the listing disappeared from ARLA’s website straight after the programme, despite Premier Property continuing to advertise itself as a member of the organisation. The firm this week promised that when renters see their logo, they can rest assured that, ‘they and their money are safe.’[1]

Appalling

MP Olivier Colvile, who has campaigned for tenants’ rights, called the case appalling, stating: ‘clearly there needs some action to be taken on all of this.’[1]

The BBC’s investigation was broadcast on the same week as letting agent Tahir Kan was put behind bars for 45 months by Bolton Crown Court, for illegally holding onto £130,000 worth of deposits paid by tenants.

This conviction has taken the number of tenancy deposits stolen so far in 2017 to £146,000.

Investigation exposes level of lost deposits

Milestone

Jagota, founder of North East sales and lettings firm KIS, noted: ‘It’s a significant milestone that the mainstream media is picking up on a major scandal which could engulf the entire private rented sector at any second.For too long it has been the letting industry’s dirty little secret that deposits can be used as personal piggy banks which firms can dip into whenever they see fit.’[1]

‘In the age of insurance, there is no need for cash deposits to be taken at all, with landlords better off protecting their properties against careless tenants in the same way they would protect their own homes. It’s ironic that all of this news comes the same week ARLA has relaunched itself as the knight in shining armour who ‘stands for protection for the consumer’.[1]

‘That doesn’t seem to have happened on this occasion. In fact, all that has happened is any reference to this company, whose customers put their faith in because they were ARLA members, disappearing from the ARLA website faster than their deposits!’ he concluded.[1]

[1] http://www.propertyreporter.co.uk/landlords/bbc-investigation-exposes-level-of-disappearing-deposits.html