Posts with tag: Buy-to-Let

Salford in top 5 student buy-to-let locations

Published On: December 12, 2016 at 2:55 pm

Tags: Buy-to-Let,landlords,student landlords,student tenants

New research has revealed that Salford is now in the top five university towns in England-ahead of Manchester, Leeds and London.

Data from the report from The Mistoria Group indicates that Salford is delivering an average rent of £750 per month, an annual yield of 6.8% and a typical house price of £131,863.

Top buy-to-let locations

Salford sits in 4^th position in the latest results, behind Aston & Birmingham City, Teeside and Sunderland, which records annual yields of 10.6%.

According to The Mistoria Group, student landlords can enjoy returns of up to 7-10%, should they be savvy and purchase the correct property in the correct area.

Managing Director of The Mistoria Group, Mish Liyanage, noted: ‘Salford is a booming University City and is a great place to invest. It offers good rail and road links, located near the M602 and the M60, together with a great bus and tram service. With a wide variety of bars, restaurants together with good sport facilities, three great retail parks and wide open spaces of parkland, Salford has something for everyone.’[1]

‘If landlords are savvy and carefully select where they invest, they can enjoy excellent gross annual leads. Rental income especially for HMOs can vary dramatically in Salford, depending on which postcode you look at. For example, Eades Street (M6 6PG), Seaford Road (M6 6DD), Blandford (M6 6BE), Welford Road (M6 6BB) are some of the most expensive areas in Salford, netting on average ££110 per room, per month as these streets/roads are very close to the university. However, generally, students pay up to £85-105 per room, per month including bills for high quality student accommodation,’ he continued.[1]

Salford in top 5 student buy-to-let locations

Considerations

Continuing, Liyanage said: ‘We know that the most important considerations for students when choosing rental accommodation is space, location and price. Our research shows that the majority of students in Salford want to live in high quality, shared accommodation, with good internet access and affordable bills.’[1]

‘Student accommodation can offer a number of attractive features to investors. The yields are high, as students settle for less space than other tenants; occupancy is typically very good; and it is neatly counter-cyclical, as more people go to university during economic downturns.’[1]

[1] http://www.propertyreporter.co.uk/landlords/salford-makes-the-top-5-for-university-buy-to-let.html

UK rents catching up with those in London

Published On: December 12, 2016 at 11:22 am

Author: Em Morley

Categories: Property News

Tags: Buy-to-Let,landlords,London,rents,UK rents

The most recent report from Countrywide has shown that the average London rent was 0.7% lower than last year in November. This was the largest fall seen since October of 2010, where rents stood at an average of £901 per month.

During the last year, London has moved from the region with the second largest rate of rental growth in the UK, to the slowest.

Closing Gap

Over the past five years, the gap between rents in London and the rest of the UK has grown substantially. By 2015, this gap had risen to a record £490 per month, an incredible rise from the £150 per month recorded in 2010.

However, rents in the capital are now growing at a slower rate than the rest of the UK, meaning that the gap between London and the rest has now closed. By November 2016, this gap had fallen, the first drop since 2010. Rents in London now stand 60% higher than in the rest of Great Britain.

This narrowing rent gap has been driven by a rise in the number of homes available to rent in the capital. During November 2016, there were 32% more homes to rent in London than at the same period in 2015. In addition, the number of would-be tenants increased by 9%. Average asking rents in London were down by 11%, more than double the proportion seen in 2015.

Across Britain, the cost of a new let increased by 2% in the last year-3.1% if London is excluded. Rental growth has been driven by the North, North East and North West of England, alongside Yorkshire and the Humber. 25% of tenants renewing their contract in the North of England saw their rent increase in November, up from 16% in the same month last year.

UK rents catching up with those in London

Boost

Johnny Morris, research director at Countrywide, noted: ‘Higher than usual numbers of homes available to rent has boosted tenants’ negotiating power. Stock growth has outstripped that of tenants. This is in part due to the hangover from the rush to beat the 3% stamp duty charge earlier in the year and a shift in stock from the sales market. With more choice and facing stretched affordability, many tenants are using their new found negotiating power to agree lower rents than in 2015.’[1]

‘Since the gap between London rents and those in the rest of the country hit a high watermark in 2015, the gap has been gradually narrowing. The pressure on affordability and number of homes coming onto the rental market in the capital means that rents are likely to lag behind the rest of the country in 2017,’ Morris added.[1]

[1] http://www.propertyreporter.co.uk/property/rest-of-uk-catching-up-with-london-rents.html

Rents set to increase by 15% by 2020?

Published On: December 12, 2016 at 10:17 am

Author: Em Morley

Categories: Property News

Tags: Buy-to-Let,landlords,rental accommodation,rents,Stamp Duty

UK rents are expected to rise much faster than property prices over the next three years, according to the chief operating officer of one of Britain’s leading property franchises.

Dorian Gonsalves of Belvoir, suggests there will be a 15% increase in rents by 2020. This, he feels, is due to, ‘a raft of recent anti-landlord Government policies in the past year,’ though he notes the rent rises will vary depending on region.

Buy-to-let measures

New measures introduced, including the new 3% stamp duty rise and tougher mortgage lending criteria, could well see many landlords making a loss. Gonsalves also believes that the Government’s failure to improve the availability of social housing for rent has led to a shortage of quality rental accommodation in the private rental sector.

Mr Gonsalves believes: ‘’Throughout 2017 Belvoir will continue to work with decision makers and we hope that some of the Government’s recent changes will either be reversed or incentives will be launched to help drive up the supply of rental properties. This would then bring down rents and benefit millions of tenants, making for a healthier rental sector.’[1]

The most recent rental index from the firm reveals that 88% of offices had recorded an increase in demand for properties to rent during Q3 of 2016. However, a huge 86% of tenants-around 6m households-had less than the £8,838 needed to secure a 5% deposit on the average home. This means that they are hugely unlikely to be able to buy a property.

Rents set to increase by 15% by 2020?

Struggling

Continuing, Gonsalves said: ‘People from all walks of life, including students, migrant workers and professionals with families, are struggling to meet strigent lender affordability ratios.’[1]

‘When someone is not in a position to buy, they obviously start looking for somewhere to rent, but unfortunately, Government policies seem to lack any direction and have done nothing to benefit either landlords or tenants, so tenants could find it more difficult to find good quality suitable accommodation in 2017 and beyond,’ he concluded.[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2016/12/rents-predicted-to-increase-15-by-2020

Investors are looking at different property types amidst uncertainty

Published On: December 7, 2016 at 12:34 pm

Author: Em Morley

Categories: Landlord News

Tags: Buy-to-Let,portfolios,property,property investors

An increasing number of property investors are aiming to establish a plan to diversify their portfolios, amidst growing potential and economic uncertainty.

According to the head of a leading network of UK property auctioneers, buy-to-let landlords are looking to include a, ‘wider mix of property types.’

Different property types

Founding director of Auction House, Roger Lake, believes that investors are increasingly looking to put money into in all kinds of property, if they can afford to do so.

Lake notes that demand for commercial property is particularly strong at present.

‘Auction prices have rebalanced since the referendum result and buyers are now actively seeking opportunities. Demand for commercial lots has increased too, as more investors look to spread their risk over a wider mix of property types,’ Lake observed.[1]

Investors are looking at different property types amidst uncertainty

Sales

Auction House has seen sales this year reach 2,873 lots to the end of November. This is at a success rate of 77%, raising a total of £387m.

Mr Lake said: ‘Supply has returned to normal levels over much of the country although the South East remains a challenge.’[1]

The group has seen a record number of lots entered into its auctions during the last month, with 25 auctions taking place between 1^st-15^th December.

Lake noted: ‘Our northern sale rooms will be particularly busy. We have an impressive 86 lots entered into our newly-launched Auction House North West sale at Bolton’s Macron Stadium, as well as 55 in our West Yorkshire auction and 101 in our latest Cumbria/North East catalogue.’[1]

‘As a result, we have a wide range of pre-Christmas bargains being offered and are expecting well-attended auction rooms and enthusiastic bidding,’ he concluded.[1]

If you are thinking of buying a property at auction, make sure you read this handy guide before you commit!

[1] https://www.propertyinvestortoday.co.uk/breaking-news/2016/12/investors-seeking-to-spread-their-risk-over-a-wider-mix-of-property-types

Buy-to-let valuations down by 18.5% year-on-year

Published On: December 7, 2016 at 9:53 am

Author: Em Morley

Categories: Landlord News

Tags: Buy-to-Let,buy-to-let valuations,landlords,tax changes

The number of buy-to-let valuations have fallen sharply since the introduction of the 3% stamp duty surcharge in April. In addition, the proposed ban on letting agent fees have moved to further unsettle the market, according to research from the Connells group.

Tax changes

Undoubtedly, 2016 has been a tough year for buy-to-let landlords, given the raft of tax changes introduced by the Government. These changes have raised concern that those investors with low profit margins could end up making a loss as a result of these alterations.

In fact, some could be pushed out of the sector altogether.

Unsurprisingly, the number of valuations carried out for the buy-to-let sector slipped by 6.1% month-on-month and by 18.5% on a yearly basis to November.

John Bagshaw, corporate services director of Connells Survey & Valuation, observed: ‘2016 has been something of an annus horribilis for landlords. They have had to contend with the reverberations of the 3% stamp duty surcharge and the removal of the 10% wear and tear allowance.’[1]

Buy-to-let valuations down by 18.5% year-on-year

Remortgaging rise

However, despite the number of buy-to-let valuations being down by 18.5%, remortgaging actually rose by more than 20% during the period.

Bagshaw observed: ‘Homeowners want to lock into deals before rates rise. There’s no doubt that remortgaging is driving the mortgage market at the moment.’[1]

During November, there was a surge in people looking to remortgage. Valuations rose by 4.9% in comparison to October, and by 24.6% annually.

[1] https://www.landlordtoday.co.uk/breaking-news/2016/12/buy-to-let-valuation-instructions-plummet-18-5

Rents in London forecasted to increase as demand rises

Published On: December 6, 2016 at 10:40 am

Author: Em Morley

Categories: Property News

Tags: Buy-to-Let,London,rental rises,rents,tenants

Property agents Portico has forecasted that the cost of renting property in London is likely to increase in the coming months, as the balance between supply and demand increases in the capital.

Portico estimates that rising demand from the increasing population, coupled with unemployment levels, could put more pressure on rental values in the city. This could also push up yields for buy-to-let landlords.

Blow for tenants

This prediction will come as a blow for tenants who are already struggling to keep up with their rental payments. The monthly outlay for tenants in Greater London hit an average of £1,543 in October, according to the latest figures released from referencing firm Home Let.

Mark Lawrinson, regional sales director of Portico, noted: ‘The population is growing, the job market is buoyant and people are still coming to live in London-so while supply is decreasing, demand is continuing to grow.’[1]

‘It’s this imbalance between supply and demand that is likely to increase rental prices, while weaker transaction prices will push up rental yields’ he continued.[1]

Rents in London forecasted to increase as demand rises

Rising rents

Another report from Savills last month indicated that rents are set to increase considerably faster than house prices over the next five years. This report suggests that rents will rise by 19% by 2021, with house prices increasing by 13% over the same period.

In addition, the gap is predicted to be more pronounced in London, where rents are indicated to rise by 24.5%. House prices are forecasted to increase by 10.9%.

[1] https://www.landlordtoday.co.uk/breaking-news/2016/12/rents-in-london-set-to-rise-as-demand-for-homes-outstrips-supply