Posts with tag: Buy-to-Let

Barclays launches new 10 year BTL fix

Published On: January 31, 2017 at 2:30 pm

Tags: Barclays,buy to let mortgages,Buy-to-Let,interest,lenders

Barclays has become the latest lender to offer buy-to-let landlords an opportunity to take advantage of low interest rates. However, the Bank has moved to offer this incentive for a full decade.

The ten-year buy-to-let let mortgage is fixed at 2.99% and comes with a £2,000 fee. It is not subject to strict rental income requirements due to the length of the loan, which has led to suggestions that some buy-to-let investors could brrow more than could on other shorter-term fixed deals.

Stringent Checks

For mortgage products with terms up to five years, the lender requires landlords to illustrate their rental income can cover their mortgage payment by a ratio of 145%, should their mortgage rate increase to 5.5%. However, this rule is waived in favour of a more flexible ‘affordability calculator, on products of five years or more.

Jonathan Harris, director of mortgage broker Anderson Harris, said on the new product: ‘A 10-year fix for buy-to-let is unheard of and the result of changing circumstances for the sector. What is exciting about this product is that the affordability calculator takes into account the applicant’s overall income and expenditure position – so massively benefits those applicants with strong incomes and limited commitments.’[1]

Barclays launches new 10 year BTL fix

‘The upshot is that they can borrow more than previously – a welcome innovation to recent restrictive practices in the buy-to-let market,’ he added.[1]

Landlords considering this product should be wary that the product comes with an exit charge of 5%, which could be a gamble should investors be unsure of what their future holds.

[1] https://www.landlordtoday.co.uk/breaking-news/2017/1/barclays-unveils-10-year-fix-buy-to-let-mortgage-at-2-99

73% of tenants have self-funded rental improvements

Published On: January 31, 2017 at 11:00 am

Author: Em Morley

Categories: Landlord News

Tags: Buy-to-Let,improvements,landlords,rental improvements,renters

The latest consumer research released by Home services marketplace Plentific.com has found that 73% of UK tenants have spent their own cash in order to fund rental improvements.

Homely

Of course, tenants living in rented accommodation for a considerable period will want to make their property feel like a home. As a result, many make improvements such as putting up pictures or shelves. Should these changes not be considered necessary, a landlord can choose not to foot the bill, leaving tenants out of pocket.

In terms of how much the average tenant spends on these improvements, the breakdown is fairly even by price:

26% spent less than £100
24% spent between £100 and £500
23% have spent more than £500

Looking at improvements by age, the research shows that older renters tend to spend more. 27% of those over 55 spent over £500 on improving their rental property, as opposed to only 15% between 18-34.

73% of tenants have self-funded rental improvements

Regional Improvements

By region, Sheffield led the way, with the highest rate of tenants making improvements while renting found in the Steel City. 85% were found to have spent their own money to improve their rental property. In London, 74% said they had footed the bill for upgrades.

On the other hands, only 40% of tenants in Leeds paid for their own improvements.

Liverpool and Glasgow topped the list of regions paying the most for improvements, with 33% of renters here paying more than £500.

Plentific spokesperson Stephen Jury: ‘Whilst tenants can consult and charge their landlord for any necessary changes, our findings show that most renters will pay for and conduct some home improvements themselves. Our research illustrates the importance of personalising the living area to generation rent and making it more than just rental space.’[1]

[1] Plentific Press Release, Over 70% of renters have footed the Bill for home improvements, 31.01.17

Plans approved for £20m student development in Sheffield

Published On: January 30, 2017 at 2:51 pm

Author: Em Morley

Categories: Property News

Tags: Buy-to-Let,landlords,Sheffield,student accommodation,student landlords

Sheffield has been buoyed with the news that planning consent has been awarded for a £20m student accommodation scheme in the city centre.

The City’s council gave the go-ahead for London-based developer Southern Grove to build a new 246-bed development last week. Situated adjacent to the University of Sheffield’s Engineering Faculty, Steel City will include modern accommodation and networking facilities, with a rooftop bar.

Exciting

Chief Executive Andrew Southern noted: ‘Securing planning permission for this scheme will enable us to create an exciting development that will break away from the traditional concept of student halls of residence. We are working in close collaboration with Axis Architecture, the masterminds behind this striking building and with Steel City we’ve put together a high-quality redevelopment that stiches a modern twist back into the traditional 19^th century fabric of that area.’[1]

‘As well as enlivening and regenerating an underused site, Steel City will benefit Sheffield in a number of other ways, including job creation, increased economic activity, and the freeing up of traditional family housing stock for local people,’ he continued.[1]

Work on the project is due to begin in the Spring, with the building scheduled for completion in time for the 2019 academic year.

Top of the class

Just last year, Sheffield, home to the University of Sheffield and Sheffield Hallam University, was named the best city for graduates. This was based on:

average graduate salary
average rental cost
average house price
monthly utilities
disposable income
the cost of a pint (just £2.70 on average!)

Research conducted by property website The House Shop found that Sheffield had the cheapest rental and living fees. A two-bedroom house cost £667 per month to rent on average. The average purchase price was found to be £119,806.

Nick Marr, co-founder of The House Shop, observed: ‘Sheffield has been the big winner here, with the perfect combination of low rents, affordable house prices, good graduate starting salaries, cheap pints and plenty of shops, pubs, restaurants, clubs and bars to keep new graduates entertained.’[1]

Plans approved for £20m student development in Sheffield

Buy-to-let

The growing popularity of the city has led to demand for property increasing, not just for students but for those relocating from areas such as Leeds and Manchester. Sheffield is also a very attractive region for buy-to-let investors.

In 2016, Sheffield was named as the third city for buy-to-let property investment opportunities after Leeds and Manchester. The average rental yield in the city is currently 5.3% per year, according to Urban.co.uk.

Adam Male, co-founder of Urban, said: ‘Universities in the North are incredibly popular, and for parents with children studying in the area, this region presents itself as a prime place to invest. With massive transport investments planned for these areas as well as more businesses moving North, a buy-to-let in these areas is not only likely to offer short-term financial gains, but a solid long-term investment too.’[1]

[1] https://www.propertyinvestortoday.co.uk/breaking-news/2017/1/plans-approved-for-20m-sheffield-development

Lending falls at Paragon during Q4 of 2016

Published On: January 30, 2017 at 9:45 am

Author: Em Morley

Categories: Finance News

Tags: Buy-to-Let,lending,Mortgage lending,rental accommodation

Paragon Bank has become the latest buy-to-let lender to announce a fall in its buy-to-let lending in the final quarter of 2016. This has once again been attributed to the introduction of more stringent conditions for buy-to-let property purchasers.

In Q4, the Bank agreed mortgages for rental accommodation worth £185.2m, which was less than half of the £400.9m leant during the opening quarter of the year.

Clampdown

Alongside the more stringent stress tests for buy-to-let investors, the Government has also moved to clamp down on buy-to-let lending by removing wear and tear allowance, introducing a 3% stamp duty surcharge and phasing out mortgage interest tax relief.

Despite the fall in completions during the last three months of the year, Paragon feels that the market will improve significantly. This is due to the fact that more private rental properties are needed to meet increased demand from tenants.

Lending falls at Paragon during Q4 of 2016

Nigel Terrington, Paragon Group’s chief executive, noted: ‘We have made a strong start to a year that will see the group continue its transition to a lending and operational model that is orientated around Paragon Bank.’[1]

‘The lending growth we haven’t seen in asset finance is encouraging and reflects the increasing diversification of the group. Lending across all divisions and the strong growth in the buy-to-let pipeline bodes well for the year as a whole,’ Mr Terrington added.[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2017/1/lending-to-buy-to-let-lending-falls-after-introduction-of-new-rules

[1]

Renters being pushed out of London due to record rents

Published On: January 27, 2017 at 10:37 am

Author: Em Morley

Categories: Property News

Tags: Buy-to-Let,London,rental values in London,renters

Despite the growth in rental values in London slowing recently, the capital remains by far the most expensive region to rent in the country.

As such, a large number of Londoners renting property in the South of England has risen sharply, as more tenants are leaving London to try and get more value for money elsewhere.

Record Highs

With rents in the capital reaching record highs, many renters have been convinced to seek more space and value in other regions of the South. More specifically, these renters are looking to rent in areas offering a commute back to London and proximity to amenities such as good schools.

Michelle Niziol, Managing Director of IMS Property Solutions observed: ‘Growth in rent in the South of England is being fuelled partly by an increase in the number of people who are leaving London, seeking more affordable areas within the commuter belt. This is particularly so for young professionals and families and is likely to continue in 2017 and the foreseeable future.’[1]

Renters being pushed out of London due to record rents

‘More than four million households rent privately in the UK and this figure is set to grow as people continue to struggle to get on the housing ladder. However, there is also the growing trend of people choosing to rent rather than buy because of the flexibility it offers them. This means that despite the Government having announced a series of policy changes aimed at landlords, investing in bricks and mortar will still remain a worthy asset class for investors,’ Niziol added.[2]

[1] https://www.landlordtoday.co.uk/breaking-news/2017/1/high-prices-push-renters-out-of-the-capital

Average property prices could rise sharply in next decade

Published On: January 26, 2017 at 9:50 am

Author: Em Morley

Categories: Property News

Tags: average house price values,Buy-to-Let,landlords,property prices

A warning has been sounded that residential property prices in England could reach an average of over £300,000 during the next decade, should prices continue to rise at the same rate as previously.

What’s more, the research from eMoov suggests that in the capital, prices could rise to over £800,000, with those in the South East hitting £445,000.

Property Price Rises

The report from eMoov shows that house prices in England have risen by 29% in the last ten years. The same increase between now and 2027 would take the average house value in England to £301,864.

In London, they would increase by 80% to hit £866,719 and in the South East a rise of 43% to £445,159.

For other regions, the rise would not be as prominent. In the North West, prices would increase to £158,131. Prices in the East and West Midlands would rise to £205,870 and £183,883.

Looking at the last 20 years, values in England have risen by 320%. Should this happen again until 2037, average property prices would rise to £983,826. In London, average values would hit a whopping £2,792,783.

Average property prices could rise sharply in next decade

Impossible

Russell Quirk, chief executive officer of eMoov, believes the figures show the almost impossible task being faced by the next generation of would-be renters.

Quirk noted: ‘The property boom in several regions of England has made it increasingly more expensive to get on the ladder and the figures anticipating the next two decades only further attest to the importance of investing in a home as soon as possible if the trend in increasing property values is to persist.’[1]

‘It is stomach churning to think that should prices continue the way they are, there will be just one real area of property affordability left across England in 20 years’ time, with the average house price in England approaching the £1 million mark and three regions tipping beyond this,’ Quirk added.[1]

[1] http://www.propertywire.com/news/uk/average-house-price-england-reach-close-1-million-2037/