Posts with tag: Buy-to-Let

Leeds Building Society encourages longer tenancies

Published On: August 15, 2016 at 11:38 am

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Leeds Building Society has move to alter its mortgage criteria, in an attempt to encourage buy-to-let landlords to take on longer-term tenancies.

The lender has announced that it is to accept tenancy agreements for periods that suit both the landlord and the tenant, instead of stipulating a maximum timeframe. Previously, agreements were set at 12 months.

Long-term tenancies

A number of leading lenders have said that they will advocate longer-term tenancies, but many will only go to a maximum of three years. Leeds Building Society will be amongst a small group with no set length of agreement.

Richard Fearon, Chief Commercial Officer at Leeds, said, ‘this is a good example of our strategy of supporting borrowers who are not well served by the market. By demonstrating flexibility and not imposing a maximum tenancy period we are helping to support out buy-to-let borrowers.’[1]

Leeds Building Society encourages longer tenancies

Leeds Building Society encourages longer tenancies

A recent report from Shelter has revealed that 70% of tenants in the private rental sector would prefer a tenancy agreement of between three and five years. Many tenants have voiced their concern over insecurities with shorter-term arrangements.

David Hollingworth of L & C Mortgages observed, ‘more people are renting for longer but often find that they have little security of tenure, with tenancies often offered only as a six-to-twelve month option. Leeds’ removal of the maximum tenancy period will help increase choice for landlords and their tenants, both of whom may prefer a longer-term tenancy agreement to be in place.’[1]

[1] http://www.propertyreporter.co.uk/landlords/leeds-bs-announces-landlord-focussed-criteria-changes.html

Asking prices fall, although in line with seasonal trends

Published On: August 15, 2016 at 10:18 am

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Asking prices of  houses coming onto the market during the last month was 1.2% down on the month before, according to a new report from Rightmove.

However, the firm suggests that this fall is completely in line with trends seen over recent years and has little to do with the recent Brexit vote.

Falls

Figures from the report suggest that the biggest decline in house prices was seen in London and the South East. Values here were down 2.6% and 2% respectively. As a result, annual increases have fallen to 4.1%.

Miles Shipside, Rightmove director and housing market analyst Miles Shipside, noted, ‘the average fall in new seller asking prices at this time of year has been 1.2% over the last six years, so this month’s fall is exactly in line with the long-term average. The largest price falls at this time of year were 2% and 1.3% in 2014 and 2010, with the smallest fall being 0.8% in post-election boosted 2015.’[1]

‘With the timing of Brexit uncertainty coinciding with both the seasonal slowdown and continuing the lull following the first quarter buy-to-let surge, 2016 will be a year of two halves. How different they are will depend upon the strength of the traditional market rebound this autumn, especially at the upper end of the market and within the London commuter belt, which currently appear to be the most subdued,’ he continued.[1]

Data from the report suggests that homes with four or more bedrooms are taking the longest to sell. These types of property currently take an average of 74 days from being advertised to actually selling. What’s more, these properties have seen the biggest drop in new seller prices, falling by 2.9%.

Asking prices value, although in line with season

Asking prices value, although in line with season

Increases

In contrast, first-time buyers with two bedrooms or less, alongside second-stepper properties, were found to be performing the best.

Properties in the South had the largest jump in the number of days taken to sell during the last two months.

Shipside continued by saying, ‘many prospective buyers take a summer break from home-hunting and those who come to market at this quieter time of year tend to price more aggressively. This summer is also affected by both Brexit uncertainty and the aftermath of the buy-to-let rush in March to beat the stamp duty deadline.’[1]

[1] https://www.estateagenttoday.co.uk/breaking-news/2016/8/asking-prices-dip–but-its-seasonal-not-brexit-says-rightmove

[2] https://www.propertyinvestortoday.co.uk/breaking-news/2016/8/asking-prices-in-the-uk-fall-sharply

 

 

Stamp Duty will impact PCL market more than Brexit

Published On: August 15, 2016 at 9:06 am

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Categories: Finance News

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An interesting new investigation has looked at the impact of both Stamp Duty changes and Brexit on the prime central London housing market.

The research from Knight Frank suggests that additional Stamp Duty charges brought in on April 1st is more of an issue for the prime London market than leaving the EU.

However, the Brexit vote has moved to create a short-term period of uncertainty, which as a result is affecting behaviour in the region.

Falls

House price values fell by 1.5% in comparison to one year ago, with the number of new buyers slipping by 6.2% in the same period. In addition, the number of exchanges were down by 10.5% during the first six-months of the year, but viewings rose by a substantial 40.8% compared to 2015.

The below £1m market saw annual price growth of 1.1%.

Tom Bill, head of London residential research, suggests that early indications are that the Brexit vote will reinforce price trends.

During June 2014, yearly price growth in prime central London was 8.1%, the last peak for prices in recent times. Growth then fell steadily to -1.5% in July 2016.

Bill notes, ‘this slowdown was a natural consequence of strong price rises between 2009 and 2013, however the process was accelerated by two stamp duty increases and a series of other tax measures.’[1]

Stamp Duty will impact PCL market more than Brexit

Stamp Duty will impact PCL market more than Brexit

Impact

Continuing, Bill said, ‘despite the widespread media coverage devoted to the EU referendum and its potential impact on house prices, the primary factor curbing demand in prime central London remains stamp duty. The result of this two year slowdown is that vendors had already begun to adapt to the new pricing environment and in many cases Brexit has been a trigger to make overdue reductions to asking prices.’[1]

‘Indeed, had the result of the referendum been a victory for Remain, it is likely there would have been a similar mismatch between expectations and reality that followed the 2015 general election. Following the formation of a majority Conservative Party government, high stamp duty costs acted as a brake on demand that was widely expected to surge. Since the vote, a number of buyers have requested discounts due to the climate of political and economic uncertainty,’ he added.[1]

Mr Bill also said, ‘however, where the asking price was set an appropriate level before the vote, deals are proceeding with no reductions. In other cases, the Brexit vote has encouraged vendors to show increased flexibility. It is too early to say whether the reductions are likely to trigger higher transaction levels.’[1]

[1] http://www.propertywire.com/news/europe/prime-central-london-sales-2016081112252.html

 

 

New mortgage deal for BTL landlords at the Mansfield

Published On: August 11, 2016 at 11:37 am

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Mansfield Building Society has moved to launch a new five-year fixed rate buy-to-let mortgage product. This product will be set at 3.29% and will is aimed to attract smaller landlords to alleviate some of the Brexit uncertainty.

Buy-to-let

The product is available for both purchase and remortgage and can be used for Consumer Buy to Let.

Some key features of this new mortgage are:

  • up to 70% LTV
  • a fixed rate of 3.29% for the first five years
  • free basic valuation
  • an application fee of £199
  • completion fee of £1,800
  • repayment charge of 3% for the first five years

This product has been launched in addition to the Mansfield’s existing buy-to-let portfolio. Lending is available up to the age of 85 at the end of the mortgage term.

Rental income is assessed at 130% of the monthly mortgage interest, which is calculated at 5%.

New mortgage deal for BTL landlords at the Mansfield

New mortgage deal for BTL landlords at the Mansfield

Certainty

Steve Walton, National Development Manager at the Society, said, ‘buy-to-let landlords have had a tough time in 2016 so far. Whilst we can’t do anything about the increase in taxation or the regulatory burden, we can do our bit for them by providing greater certainty through this period of unprecedented change.’[1]

‘Since the EU referendum results, there has been plenty of speculation about potential fluctuations in the bank base rate, which is unsurprising given that Article 50 is expected to take up to 2 years to be fully invoked. During this time landlords will want reassurance of a fixed outgoing to help manage their income and expenditure,’ Walton added.[1]

[1] http://www.propertyreporter.co.uk/finance/mansfield-targets-small-independant-landlords-with-new-5-year-fix.html

Which University locations get top marks for investment?

Published On: August 10, 2016 at 8:48 am

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New research has revealed the most lucrative university cities in Britain, based on property price, rents and house price growth.

Leading London estate agent Chestertons also looked at average property values and typical graduate income in order to ascertain their leaderboard.

Top of the class

According to the analysis, Edinburgh received top marks for being the best university city in which to invest. Also receiving A grades were Bristol and Brighton.

At the bottom of the class were Aberystwyth, Liverpool and Lancaster. This was due to more affordable rents and reduced house price growth.

With the new academic year fast approaching, the league table makes interesting reading for potential windfalls from buy-to-let investment at university towns and cites in the UK.

The top-ten towns and cities providing the best investment opportunities were found to be:

  • Edinburgh
  • Bristol
  • Brighton
  • Reading
  • Oxford
  • York
  • Cambridge
  • St Andrews
  • Southampton
  • Warwick
Which University locations get top marks for investment?

Which University locations get top marks for investment?

Reliable demand

Daniel Killick of Chestertons, noted, ‘student lets are generally seen as great investment; there will always be a reliable level of demand and universities can often be really helpful in pointing students your way. Some locations, however, offer a better return than others. We were keen to get some deeper insights into the UK’s student property market and understand where the most attractive prospects are-and the ones that are less likely to pay off.’[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2016/8/top-class-university-cities-for-buy-to-let-property-unveiled

 

 

Rents rising across Britain, but at a slower rate

Published On: August 9, 2016 at 9:01 am

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Categories: Property News

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New research has revealed that average residential rents in Britain continued to rise during July, with demand still outweighing supply. However, the rate of growth is slowing.

Analysis from HomeLet reveals that with the exception of Greater London, the average monthly rent now stands at £779 per month. This is 2.3% higher than one year ago.

In the capital, rents are now £1,599 per month, a rise of 4% in the twelve month period.

Banishing uncertainty

Data from the report suggests that buy-to-let landlords have been able to secure higher rents on new tenancies, despite the uncertainty created by the Brexit vote in June.

This is in line with the housing market, as mortgage lenders are also reporting modest growth in house values in the month following Brexit.

Moving forwards, the private rental sector looks set to be unchanged by the result. A growing population, unaffordability of house prices and lack of new supply suggests that sector will be a vitally important component of the housing market in years to come.

Regional variation

A further look at the figures shows that there is a tangible regional variation recorded. Month-on-month, rents rose most in East Anglia, by 3.7%. In addition, the region came out on top for annual rises, seeing a yearly rise of 9.7%. As such, average rents in the area now stand at £897 pcm.

However, in Scotland rents dropped by 3.7% month-on-month. On a yearly basis, rents increased by 1.4% to an average of £676. The only other area to see a fall in the month was the North East, where rents fell by 0.4% to £537. Yearly, rents dropped by 5%.

Rents rising across Britain, but at a slower rate

Rents rising across Britain, but at a slower rate

Supply and demand

Martin Totty, chief executive at HomeLet’s parent company Barbon Insurance Group, believes rents will be determined by supply and demand in the sector.

Totty noted, ‘population growth will continue to increase demand and the housing stock isn’t growing quickly enough to meet that demand. However, with rents ultimately limited to a tenant’s ability to pay, rents are likely to continue to climb, albeit at the slowing pace noted most recently.’[1]

‘We won’t know exactly how Brexit is impacting the private rental sector and it will be several months yet until we see some clearly established trends in the marketplace. It seems likely that with lenders concerned about the prospect of falling house prices, loans to value in the mortgage market are going to become less generous, which may see more people turn to the rental sector rather than buying a property. However, it’s possible we may also see renewed interest in the London rental market as foreign investors seek to pick up investment property to make the most of the big exchange rate advantage following the fall in the pound,’ he continued.’[1]

Concluding, Totty said, ‘we may also see foreign investment increase outside the capital, in other cities across the UK. This coupled with recent figures showing that the number of people becoming homeowners is falling across the country, the demand for rental accommodation is likely to remain strong.’[1]

[1] http://www.propertywire.com/news/europe/uk-rental-market-prices-2016080912239.html