Posts with tag: Buy-to-Let

Buy-to-let alterations could result in stock surge

Published On: September 5, 2017 at 9:10 am

Tags: Buy-to-Let,landlords,rental properties,rents

Alterations to buy-to-let lending criteria being introduced at the end of September are set to entice a surge of rental stock, with landlords looking to offload properties that are not giving them substantial yields.

From 30^th September, the Bank of England’s Prudential Regulation Authority is set to tighten lending criteria still further, following the introduction of stress tests earlier in 2017.

Scrutiny

Mark Lawrinson, regional director of London agency Portico, believes that landlords will have their entire portfolio scrutinised when applying for additional buy-to-let funding.

‘If you have six properties and four are generating enough rental income to cover mortgage payments and then some, but the other two are not, your new mortgage application may not be approved by some lenders,’ Mr Lawrinson explained.

Lawrinson said this could signal the start of a period of rental properties coming to the market, with landlords looking to offload those generating the lowest returns.

‘The new rules could also have a knock-on effect on rental prices, as landlords look to cover any shortfalls or carry out works to a property to both increase the capital value and the rent, in turn improving the yield and the return,’ he continued.

Buy-to-let alterations could result in stock surge

Re-mortgaging

Richard Blanco, representative of the National Landlords Association, feels it could already be too late for landlords looking to remortgage before the new criteria comes into effect.

Mr Blanco observed: ‘Many lenders will unfairly assess landlords’ existing mortgages through a 145% x 5.5% prism even though they originally got their mortgages on looser criteria years ago. This could create mortgage prisoners: borrowers who are unable to switch lenders. This is a reminder that if you do remortgage to another lender, always choose one that has a good track record in switching customers to competitive follow on rates once the initial product has expired.’[1]

Concluding, Mr Lawrinson said: ‘We have certainly seen less professional landlords adding to their portfolio this year, but there is still money to be made in buy-to-let if you invest smartly.’[1]

[1] https://www.lettingagenttoday.co.uk/breaking-news/2017/9/buy-to-let-lending-changes-could-result-in-rental-stock-surge

Rogue landlord fined for illegally evicting tenant

Published On: September 4, 2017 at 11:32 am

Author: Em Morley

Categories: Landlord News

Tags: Buy-to-Let,illegally subletting,landlords,tenant

Another landlord has been brought to justice, being prosecuted and fined for evicting a tenant illegally.

Rouge landlord Suhail Mahmood was convicted at Sheffield Magistrates’ Court and was told to pay fines totalling £3,700.

Changing Locks

The landlord was prosecuted by Sheffield City Council, after telling one of his tenants to move out and subsequently removing and changing locks only days later.

Mr Mahmood was told to pay £700 in tenant compensation, fined £2,000 and £1,000 in court costs. The conviction on August 29^th came of the 40^th anniversary of the introduction of the Protection from Eviction Act 1977.

Councillor Jayne Dunn, Cabinet Member for Neighbourhoods and Community Safety at Sheffield City Council, said: ‘It’s not right that a landlord thinks it’s acceptable to give notice on their property and expect someone to move out within a matter of days.’

Rogue landlord fined for illegally evicting tenant

These are people’s homes and they need some security We put a huge amount of time into clamping down on bad letting practices and I am determined to keep this up. Luckily we have some excellent landlords in our city and the vast majority meet their legal responsibilities.’

Dunn said she wanted the case of Mr Mahmood to serve as a warning to others, stating : ‘We can act and will act.’ [1]

[1] https://www.lettingagenttoday.co.uk/breaking-news/2017/9/landlord-hit-with-fine-for-illegally-evicting-tenant

What causes landlords’ biggest anxieties?

Published On: September 4, 2017 at 9:26 am

Author: Em Morley

Categories: Landlord News

Tags: Buy-to-Let,buy-to-let landlords,investment,landlords

New research from Upad his discovered what features of buy-to-let investment make landlords most anxious.

Many would-be landlords continue to see buy-to-let as an attractive form of investment, in a period of record low interest rates and stock market volatility.

Issues

Data from the report indicates that higher rates of Stamp Duty Land Tax, scrapping of wear and tear allowance and the phasing out of landlords’ mortgage interest tax relief are some of the main issues impacting on landlords.

In addition, the study from the online letting agent found that around of fifth of landlords citing client demand as their main concern.

More positively, despite these concerns, 66% of landlords said they had no intention of slashing their portfolios during the next two-five years.

Void Periods

Of those planning to carry on in the buy-to-let sector, a significant majority said they felt managing and mitigating void periods would be the factor most likely to give them sleepless nights.

13% said this was quite important, while 74% said it was a very important consideration moving forwards.

What causes landlords’ biggest anxieties?

James Davis, founder of Upad.co.uk, observed: ‘It’s easy to assume that landlords are most troubled by the big issues of the day, those topics which the industry and media become all-consumed by.’

‘Whilst these issues clearly do concern landlords, it is often the more mundane aspects of renting a property that have an impact on how a landlord chooses to manage his or her portfolio to reduce the stress-levels associated with doing so. We work closely with our landlords to ensure that we provide them with the tools to make the management of their property portfolio easier.’

Concluding, Davis noted: ‘We can’t change the tax regime, but we can deliver market-leading technology that allows landlords to quickly identify the right tenant and successful let their property – we believe this research demonstrates just how vital this is.’[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2017/9/what-really-keep-landlords-awake-at-night

£2.5bn per year being given to landlords letting substandard homes

Published On: September 4, 2017 at 8:34 am

Author: Em Morley

Categories: Landlord News

Tags: Buy-to-Let,housing market,landlords,rogue landlords

A recent report has revealed that rogue landlords receive around £2.5bn per year for renting out unfit and unsafe properties.

The investigation carried out by The Independent uncovered that some landlords are still letting properties that do not meet basic health and safety standards.

Housing Benefit

In addition, the report shows that unscrupulous landlords are set to obtain over

£12bn in housing benefit during the next five years. The ongoing housing shortage is leaving a number of renters with little alternative but to accept homes that are in disrepair.

Last month, The Independent revealed that almost one-third of private rented homes in England (around 1.4m properties) are currently in a sub-standard condition. 17% were found to contain the most dangerous type of safety hazard.

Commenting on the figures, shadow housing secretary John Healey, said: ‘The number of families renting from a private landlord has soared by more than a million since 2010, but decisions made by Conservative ministers have made it easier for a minority of bad landlords to fleece the system.

‘Most landlords provide decent homes that tenants are happy with, but these rogue landlords are ripping off renters and taxpayers alike by making billions from housing benefit on substandard homes.’

£2.5bn per year being given to landlords letting substandard homes

Broken

Continuing, Mr Healey said, ‘Theresa May declared the ‘housing market is broken’, but Tory ministers won’t act to make the market fairer or work better for private renters. After seven years of failure, the Conservatives have no plan to fix the housing crisis.’

‘The next Labour government would call time on bad landlords and bring in a New Deal for private renters to establish new consumer rights.’[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2017/9/around-2-5bn-a-year-handed-out-to-landlords-renting-out-non-decent-homes

New buy-to-let lender aiming at professional landlords

Published On: August 30, 2017 at 11:45 am

Author: Em Morley

Categories: Finance News

Tags: Buy-to-Let,lender,professional landlords,property

A new business lender is now officially in the market having completed its mobilisation phase yesterday.

Redwood Bank is now up and running, having obtained its primary banking licence in April this year.

Lender

The lender, owned by Redwood Financial Partners (RFP) is targeting professional portfolio landlords.

Redwood Bank has a 100% cloud-based infrastructure and offers mortgages for business owners, alongside commercial and residential property owners. It is to lend from £50,000 up to £1.5m for landlords either buying or remortgaging, all up to 70% LTV.

These loans can be fixed from 2 to 25 years, or up to 20 years for HMO properties. However, rental income must be at least 130% of monthly repayments, as the lender prepares for tighter lending rules to come into force next month.

Eligible landlords must have the minimum two years experience and at least four properties in England, Scotland or Wales.

New buy-to-let lender aiming at professional landlords

Gary Wilkinson, co-founder and Chief Executive of Redwood Bank, observed: ‘We are delighted to be open for business so soon following the issuing of our initial banking licence. We aim to offer a real alternative for small and medium sized organisations, providing them with simple transparent loans and savings accounts, great service and a promise that our money is being invested into British businesses and our local communities.’

‘As many traditional banks are hampered by poor lending practices from their past and their legacy systems, we are perfectly positioned to help British SMEs take advantage of property opportunities by offering a highly-tailored service for clients that is built around our very experienced regional managers.’[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2017/8/new-buy-to-let-lender-targets-professional-landlords

Another estate agent calls for reduction to Stamp Duty

Published On: August 30, 2017 at 9:43 am

Author: Em Morley

Categories: Landlord News

Tags: Buy-to-Let,landlords,Stamp Duty

There has been yet another call for Stamp Duty Land Tax to either be amended or abolished, this time from estate agent Jackson-Stops & Staff.

The estate agent feels that ‘prohibitive levels’ of Stamp Duty Land Tax are preventing those in the domestic market from both buying and selling. This cannot be said for overseas buyers however, who are still being attracted by the weak pound.

Reduction

Jackson-Stops & Staff is calling for a reduction of one-third in Stamp Duty levels, in order to get the market moving again.

Toby Whittome, Sales Director at the estate agent in London, observed: “Potential buyers in central London used to approach us about their next home move, driven by factors like a growing family or need for a home with more bedrooms or a bigger garden. These are the “old reasons” for moving, from before December 2014. Our purchaser registration numbers are up, but the fluidity of the market has diminished hugely. When buyers are looking at 20% transaction costs including stamp duty, solicitor’s fees and moving costs, the attitude becomes: ‘we’re better off staying where we are’.”

“In my patch of Kensington and Chelsea sales have fallen to around 120 a month, compared with around three times that number in peak 2014. In 2016 Kensington and Chelsea contributed £514 million in residential stamp duty receipts, the highest of any local authority.”

Another estate agent calls for reduction to Stamp Duty

Harmful

Nick Leeming, Chairman at Jackson-Stops & Staff, added: “If stamp duty levels weren’t causing so much harm to the million plus market I think we would see the health and fluidity at the lower to middle end of the Greater London market spread to the higher end too.”

“One recommendation is a UK wide reduction in stamp duty levels of around a third, which should boost the property market at all levels, particularly at the million pound plus level. It is worth remembering that in central London typical family homes will likely be worth £1 million or more and, with stamp duty levels preventing these homes entering the market, it means that families are unable to move up or down the property ladder when they need to.”

“Aggregate prices remain stable against a backdrop of economic uncertainty and low transaction levels, demonstrating that demand is sufficient to keep prices supported.”[1]

[1] http://www.propertyreporter.co.uk/finance/national-estate-agent-calls-for-a-one-third-cut-to-stamp-duty.html