Posts with tag: Buy-to-Let

Buy-to-let rates set to increase in 2017

Published On: January 25, 2017 at 10:10 am

Tags: Buy-to-Let,buy-to-let landlords,higher mortgage rates,mortgage rates

A leading mortgage expert has predicted that an increase in swap rates is likely to be passed on to buy-to-let landlords during 2017.

This was despite buy-to-let mortgage rates being largely unaffected by a significant increase in rates during the final quarter of 2016.

Bank Rate Lows

The Q4 results of Mortgages for Business’ Buy-to-Let Mortgage Costs Index showed that while swap rates rose, the record low Bank Rate of 0.25% saw buy-to-let mortgage headline rates largely unchanged.

David Whittaker, chief executive of Mortgages for Business, feels that lenders will be left with no choice but to introduce higher rates. This, he feels, would be particularly prominent for buy-to-let landlords who have chosen to incorporate.

Mr Whittaker said: ‘With demand in the buy-to-let sector already under pressure from both fiscal and regulatory changes, it is good to see that lenders have not further burdened landlords by increasing interest rates.’[1]

‘However, with rising swap rates this situation cannot continue forever and we would expect to see increases at some point in 2017 as lenders factor in the additional time spent on deeper background checks and assessing affordability, particularly from landlords borrowing in a limited company capacity,’ he added.[1]

Buy-to-let rates set to increase in 2017

Vigilant

Continuing, Whittaker observed: ‘Whether increases happen before 1st October when lenders will be obliged to be extra vigilant while assessing applications from portfolio landlords remains to be seen, but we will be watching the market closely in this respect.’[1]

Percentage-based fees products accounted for 41% of buy-to-let mortgages in Q4. Fee-free products also gained in market share, making up 16% overall.

Products with flat fees fell for the third successive quarter. Their average price is now £1,397, in comparison to £1,556 at the start of 2016.

[1] https://www.landlordtoday.co.uk/breaking-news/2017/1/buy-to-let-rates-set-to-rise

Accord Mortgages slashes rates for fixed products

Published On: January 23, 2017 at 3:48 pm

Author: Em Morley

Categories: Finance News

Tags: Accord,Buy-to-Let,fixed rate mortgage products,mortgage rates

Accord Mortgages has moved to announce that it has lowered rates on a range of selected fixed rate products by up to 0.24%.

The intermediary only lender has slashed rates at 75%, 80%, 85% and 90% LTV values across two, three and five-year terms.

Deals

House purchase customers can take advantage of a competitive five-year fixed rate mortgage at 2.20% with a 20% deposit, or 85% LTV on a 2.39% rate.

Both of these mortgage deals include additional features of £250 cash back on completion and free standard valuation, with a £995 product fee.

Those investors looking for a shorter deal can look at a three-year deal at 2.37% at 90% LTV. This deal is available for both buyers and borrowers looking to remortgage and again comes with a £995 product fee.

What’s more, Accord has launched a 2.76% three-year fix at 90% LTV deal for home buyers. This deal comes with no up-front fees plus £250 cashback on completion, with free valuation.

Accord Mortgages slashes rates for fixed products

Attractive

David Robinson, Accord’s National Intermediary Sales Manager, observed: ‘We are sure the new rates will prove attractive to brokers and borrowers, and we are keen to offer mortgages that deliver value for money to our customers with features like cashback on completion. The five-year rate reductions will appeal to borrowers looking for the security of fixing their mortgage repayments to a competitive rate for a longer period.’[1]

[1] http://www.propertyreporter.co.uk/finance/accord-announces-reductions-across-s3lected-fixed-rate-products.html

Ban on agent fees will impact negatively on 20% of landlords

Published On: January 23, 2017 at 11:55 am

Author: Em Morley

Categories: Landlord News

Tags: Buy-to-Let,fees,letting agents fees,tenants

The Housing Minister Gavin Barwell has moved to state the proposed ban on letting agents levying fees on tenants will only negatively impact 20% of tenants.

An ARLA report from the meeting of the All Party Parliamentary Group for the Private Rented Sector earlier this month says that Barwell disputed the notion that the ban would be universally costly for landlords and tenants alike.

Financially Impacted

Mr Barwell told MP’s that while the implications of scrapping fees does need to be assessed, early HMRC forecasts suggest that just a fifth of investors will be hurt financially.

In addition, the report states: ‘Barwell also said that since the change will be phased in it will not have as large an effect. In response to concerns that landlords will have to up their rent to cover the costs of the fees, Barwell said that it is of course up to the discretion of the landlord to decide their fees. He said the government see the measure part of as creating a fair tax regime. He said the forthcoming consultation will not look at the value of the measure but will look at how it is implemented.’[1]

What’s more, Mr Barwell is reported to have stated that Build To Rent would feature in the Government’s White Paper on Housing. Barwell sees Build To Rent as good value for money and believes that the scheme offers longer tenancies-one of his key objectives.

Ban on agent fees will impact negatively on 20% of landlords

Changes

After the meeting, managing director of ARLA David Cox, observed it was clear that the Government is trying to implement large scale changes to the private rental sector in England.

Cox noted: ‘Since the 1980s, England has been building up to 40 per cent fewer homes than the 240,000 needed annually. The resulting shortage of about two million homes has left the country with soaring prices and a growing gulf between the property haves and have-nots.’[1]

‘Unfortunately, the government doesn’t seem to realise that punishing hard-working letting agents who deliver a hugely valuable service will not in the long run improve the affordability of the sector and the service that tenants receive.’[1]

[1] https://www.lettingagenttoday.co.uk/breaking-news/2017/1/letting-fees-ban-will-only-hit-20-negatively-claims-minister

Bristol and Manchester lead annual price growth

Published On: January 23, 2017 at 10:56 am

Author: Em Morley

Categories: Property News

Tags: Buy-to-Let,growth rates,house price values,property prices

The latest Hometrack index has revealed that Bristol and Manchester led the way for price growth in key cities in the UK during 2016.

Bristol recorded growth of 9.6% and Manchester saw property values increase by 8.9%.

Highs

In Manchester, house price inflation hit a 12 year high, with demand far higher than supply. London however fell to seventh position.

Overall, average house price values rose by 2.2% in the final quarter of 2016, up by 0.3% from the previous quarter. Annual growth stood at 7.7%, slightly down on 2015.

The report suggests that lower unemployment and increasing earnings are continuing to increase demand in more affordable markets. Buyers are using to low mortgage rates to increase housings costs.

However, the headline growth rate is obscuring a shift in underlying growth at city level. Growth is shifting from London to regional cities, with more attractive affordability for further inflation.

Bristol and Manchester lead annual price growth

Capital Slowdown

It is predicted that house price growth in London will slow to 1% during 2017. Average prices increased by 7.3% during last year, the slowest annual growth rate since July 2013.

Other cities recording higher price growth than London, apart from Manchester and Bristol, were Oxford, Portsmouth and Southampton. These cities recorded growth of 8.1%, 8% and 7.9% respectively.

At the other end of the scale, Aberdeen saw annual price rates slide by -3.2%. However, house prices did recover by 2.9% in the final quarter of 2016. Despite this, Aberdeen has seen a 11% drop in average house prices since the year 2014.

Buy-to-let market sees strong start to 2017

Published On: January 20, 2017 at 9:58 am

Author: Em Morley

Categories: Landlord News

Tags: Buy-to-Let,buy-to-let landlords,investors,rental market

It is widely acknowledged that 2016 was not the best for buy-to-let landlords, The raft of changes impacting on the sector, including the additional Stamp Duty surcharge and Right to Rent, saw many investors deterred from purchasing more properties.

However, 2017 seems to have started more positively, with more landlords looking to add to their property portfolios.

Surge

The latest mortgage lending figures from Fleet Mortgages indicate that there has been a surge in demand from buy-to-let landlords trying to add to their existing properties. There were 21,000 buy-to-let loans issued during November, up 13% on October, with this trend expected to continue.

Bob Young, chief executive of Fleet Mortgages, said: ‘Overall, the market has kicked off strongly at the start of 2017 and we’ve seen a considerable amount of demand and interest from advisors on behalf of buy-to-let investors.’[1]

‘We’ve seen over the course of the last 12 months the increase in demand for limited company products, particularly when it comes to new purchases, however many landlord borrowers continue to hold their existing properties in their individual names and it’s therefore important that we continue to offer competitive products in this space,’ he continued.[1]

Demand

In order to meet growing demand, Fleet Mortgages has moved to launch five products across both its individual and limited company buy-to-let ranges.

For limited companies, the lender has launched an 80% LTV 2 year fix at 4.39%. In addition, there are two lifetimes trackers at 4.2% to 75% LTV and 4% to 65% LTV. These products also come with a 1.5% fee.

Individual products include a 2 year fix at 3.79% to 80% LTV and 4% 75% LTV tracker, both requiring a 1% fee.

Buy-to-let market sees strong to 2017

Tougher

Despite the rise in demand for buy-to-let properties, Mr Young feels there is growing frustration at the Bank of England’s Financial Policy Committee’s decision to bring in harder mortgage affordability tests.

‘One thing we are aware of however is the increased frustration around many lenders’ rent to income calculations, their ever-changing criteria, plus major difficulties when it comes to finding products on sourcing systems and being able to compare like-for-like,’ Young concluded.[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2017/1/strong-start-to-the-year-for-buy-to-let-market

Landlords and tenants leaving lettings market in London

Published On: January 19, 2017 at 2:51 pm

Author: Em Morley

Categories: Landlord News

Tags: Buy-to-Let,buy-to-let in London,investors in London,landlords

Demand from tenants in the residential lettings market in London is possibly slowing down, with landlords looking outside of the city for greater yielding investment.

A report from the National Landlords Association revealed that the number of landlords reporting a rise in tenant demand during the final quarter of 2016 fell by nearly 30% points. This was in comparison to the same period 2015.

South East Rises

Findings from the report also show that 40% of landlords in the South East saw a rise in tenant demand during the period. This was the highest recorded in the UK, which, the NLA suggests, shows more tenants are looking outside of London for more affordable accommodation.

What’s more, the firm points out that the drop in rental demand in central London coincides with a more conservative approach from landlords looking to purchase in London during the coming months.

Just 5% of landlords operating in London said that they plan to purchase in the next three months, the lowest across all regions and down by 15% from one year ago.

Landlords and tenants leaving lettings market in London

Northern Highs

In comparison, the number of landlords operating in the North East planning to purchase in the next three months has nearly doubled, from 10% in 2015 to 19% last year.

Landlords in Yorkshire have also expressed a desire to buy, up from 10% during 2015 to 16% in 2016.

Carolyn Uphill, chairman of the NLA, noted: ‘It looks like central London is simply becoming too expensive for most people, regardless of whether you want to buy, invest or rent.’[1]

‘For many tenants the practical solution of moving out of the city to more affordable suburbs with good transport links is becoming increasingly appealing. In turn, it seems that landlords have been quick to respond, turning their backs on the capital and looking to other areas where the upfront cost of acquiring property is lower, and the potential yields to be had are higher,’ Uphill added.[1]

[1] http://www.propertywire.com/news/uk/landlords-tenants-leaving-lettings-market-central-london-costs-rise/