Posts with tag: Buy-to-Let

Mortgage lending at the Nationwide rises by 20%

Published On: May 24, 2016 at 1:09 pm

Tags: Buy-to-Let,landlords,Mortgage lending,Nationwide,renters

Nationwide Building Society has today announced that their yearly mortgage lending figures are at their greatest level since the financial crisis.

The full yearly results indicate that there has been a 23% increase in statutory profit, with this total standing at £1.279bn.

Mortgage increases

Further figures suggest that gross mortgage lending increased by 20% to hit £32.6bn. Net lending rose by 28% rise to £9.1bn, bringing their market share to 21.4%.

During the past twelve months, the Nationwide has lent to 57,200 first-time buyers, accounting for one-sixth of all cases.

What’s more, the Nationwide increased their maximum limits for mortgages from 75 to 85, giving it the highest age threshold of any lender on the high street.

Mortgage lending at the Nationwide rises

Testament

Nationwide chairman, David Roberts, said, ‘these results are a testament to always putting our members first. I would like to thank Graham Beale for his huge contribution to the Society which has left the business in great shape, prospering as a modern mutual and I wish him well for the future.’[1]

‘I am delighted to welcome Joe Garner as Nationwide’s new Chief Executive. Joe stood out as someone with a deep understanding of the sector, who has championed customer interest throughout his career and who will set the strategic direction for the Society and our people.’[1]

Mr Garner, newly appointed chief executive of the firm, added, ‘it’s a credit to the management and people of the Society that they have consistently understood this and organised Nationwide around this principle. As a result, last year we lent more money to help people into a home of their own than since before the financial crisis in 2007.’[1]

[1] http://www.propertyreporter.co.uk/finance/gross-mortgage-lending-at-nationwide-soars-by-20.html

Rental market set to swell further in next decade

Published On: May 23, 2016 at 11:26 am

Author: Em Morley

Categories: Property News

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

Spiralling property prices and a shortage of affordable property is preventing many potential buyers out of the market. As such, they are left with little choice but to reside in rental accommodation.

According to new research conducted by landlord insurance specialists Cover4LetProperty, 28% of UK adults are currently living in privately rented or socially rented accommodation.

Giving up

Another recent report from Shelter revealed that many people of a younger generation are giving up on ever owning their own home, due to sky-high house values. However, Cover4LetProperty’s research shows that 57% of those over 60 live in rented accommodation.

The report also shows that 67% of renters earn between £10,000 and £19,999 per year. 40% of people living in the sector are women, with men accounting for 20%.

Last year, accountancy firm PwC suggested that the volume of new homebuyers will continue to drop in the next decade. This is due to them struggling to raise a sufficient deposit in order to buy their own place.

Rental market set to swell further in next decade

Rental rises

As fewer people are qualifying for social housing, the study suggests that in the next ten years, over half of those over the age of 40 are set to live in properties owned by private landlords.

By the year 2025, PwC suggests that 7.2m households will be in rental property, in comparison to 5.4m at present.

In addition, the report highlights the growing divide between those who can make it on to the housing ladder and those who cannot raise funds in order to buy a property. The report reads:

‘House purchases have historically been a major factor in driving wealth accumulation of lower and middle classes. The inability of many to get on the ladder may limit this avenue to social mobility in the future.’[1]

John Hawksworth, chief economist at PwC, said, ‘a large and sustained increase in affordable housing supply will be required to meet the needs of a UK population that is growing relatively rapidly by European standards.’[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2016/5/rise-of-generation-rent-as-more-people-live-in-rented-accommodation

Will one-bed flats see largest capital gains in 2016?

Published On: May 23, 2016 at 10:46 am

Author: Em Morley

Categories: Finance News

Tags: Buy-to-Let,buy-to-let landlords,capital gains,rental yields

An interesting new investigation has found that buy-to-let landlords in the UK could see the best capital gains on a one-bedroom flat over the course of the next year.

However, the same survey from Amicus Property Finance found that two-bedroom flats will generate the largest rental yields over the same period.

Gains

25% of British landlords said that one-bedroom flats are to offer the best capital gains in the next twelve months. This was closely followed by student accommodation in towns and cities, with 24%. 22% of residential landlords said that two-bedroom flats would provide the biggest capital gains, with 21% suggesting three-bedroom flats.

In terms of rental yields, 28% of landlords said that two-bedroom flats were likely to be most profitable. 25% said student accommodation in university hotspots would offer the biggest yields, while 21% selected three-bedroom flats. One-bedroom flats (20%) and new build properties (14%) were next most popular.

Will one-bed flats see largest capital gains in 2016?

Winners

John Jenkins, CEO of Amicus, said, ‘the findings show flats are the clear winners over houses and maisonettes for both capital growth and rental yields and this is reflected in our own experience in servicing professional landlords’ short term borrowing requirements.’[1]

‘Despite some uncertainty in the consumer buy-to-let sector as a result of changes to stamp duty charges, we’re seeing a sustained and growing appetite for short-term property finance driven by the tightening of mainstream bank underwriting requirements and the inability of some lenders to act sufficiently quickly to respond to demand,’ Jenkins continued.[1]

[1] http://www.propertyreporter.co.uk/landlords/landlord-tip-1-bed-flats-to-achieve-biggest-capital-gains-over-next-12-months.html

Financial stability of British renters revealed

Published On: May 20, 2016 at 12:16 pm

Author: Em Morley

Categories: Finance News

Tags: Buy-to-Let,homeowners,rent,renters

An interesting new report has revealed that a rising number of UK adults are struggling to purchase a home. This in turn is causing them poor levels of financial wellness, according to the Momentum UK Household Financial Wellness Index.

The Index was conducted by the University of Bristol’s Personal Finance Research Centre and is the first of its kind to assess the financial wellness of the UK.

Poor planning

Financial wellness is split between homeowners and non-homeowner, with tenants suffering down to a lack of assets and poor long-term planning.

Those with a mortgage average 71/100 Index points, with those owning a property outright gaining 74/100. However, those in rental accommodation average financial wellness points of 62/100 for private renters and Housing Association tenants and 60/100 for Local Authority.

The lack of substantial difference in score between private renters and those in social housing shows that despite their relatively greater incomes, private tenants are being made financially unstable by their living arrangement.

Spending

The Office for National Statistics’ Economic Review suggests that renters spend almost 20% of their income on rent. This figure rises to 25% for private renters, rising by 10% in the last three decades.

These costs are evidenced in the Index’s findings, which show that renters are half as likely than homeowners to suggest that that their income can cover their monthly outgoings. In addition, renters were revealed to be half as likely to say they are comfortable with their standard of living.

What’s more, double the amount of renters said that they had missed a minimum repayment on their credit card, loan or other debt during the past twelve months.

Financial stability of British renters revealed

Hardship

Ferdi Van Heerden, CEO of Momentum UK, noted, ‘the financial hardships being faced by renters are making it impossible for them to build the deposit necessary to get their foot on the property ladder. Soon we will see a situation where only those who already own or inherit property will be able to own a home.’[1]

‘Private renting is on the increase from 6% of the population in 1988 to 16% in 2014. By contrast, the prevalence of mortgaged home ownership among under 40’s is lower than in 1977, when the Right to Buy was introduced to address just such an issue,’ he continued.[1]

Long-term impact

Renters were also found to be more likely to see their financial prospects hit due to the effect that renting has on their overall income. According to the Index, tenants are twice as likely to have no savings, insurance or pensions in place. In addition, they are twice as likely as homeowners to have nothing in place for their retirement.

Mr van Heerden concluded by saying, ‘if we do not address the UK’s rental trap, we are effectively creating a lasting social divide between the haves and have nots. We cannot simply assume that the current system will resolve this issue and action must be taken to address this.’[1]

[1] http://www.propertyreporter.co.uk/landlords/the-rental-trap-financial-wellness-of-uk-renters-revealed.html

Investment in student property set to increase

Published On: May 20, 2016 at 9:23 am

Author: Em Morley

Categories: Property News

Tags: Buy-to-Let,investment,student landlords,student property

More landlords are looking to invest in student property, according to new research.

Rising rental values in the sector are persuading more investors to purchase in the sector, according to data released by Knight Frank.

Increases

Investment in student property in Britain reached a record high of £5.1bn in 2015, a figure more than double the £2.41bn recorded one year previously.

The firm suggests that year-on-year growth during this year will follow the pace set in 2015, meaning there will be a rental uplift of 3.5%. This will give would-be investors a fairly secure income.

Knight Frank also predicts that the development pipeline for purpose-built student accommodation will slip during 2016, particularly in London.

Both London and Manchester are examples of cities with substantial student populations but modest delivery deadlines. That is the view of Neil Armstrong, partner at Knight Frank Student Housing Valuations.

Investment in student property set to increase

Solid

Mr Armstrong said, ‘in 2015 Student Accommodation showed rock solid occupational demand supply credentials. Rental growth averaged at 3.65% as student numbers grew and supply struggled to meet demand. Whilst the macro picture (3.65%) is relatively steady, each market demonstrates different credentials largely depending upon the current level of structural under supply together with the development pipeline and its delivery in any specific year.’[1]

In retail, office and industrial, student accommodation offered large capital (15.3%) and total returns (21.5%) during 2015.

James Pullan, head of Knight Frank Student Housing, noted, ‘of the 49,271 student bedrooms transacted in 2015, over 46% were acquired by Institutions. This wave of Institutional investment has now polarised the market such, that assets which fail to meet institutional specification have much reduced liquidity.’[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2016/5/investment-in-student-housing-set-to-rise

How do rental costs vary between North East metro stations?

Published On: May 19, 2016 at 1:45 pm

Author: Em Morley

Categories: Finance News

Tags: Buy-to-Let,North East,private rental sector,rental market,renters

Interesting analysis into the private rental sector has looked at how rents vary between North East metro stations.

Research conducted by property firm KIS reveals that rents can alter by an average of £66 from station to station. Choosing the correct location could save as much as £500 per month in rent!

Fees

Data from the investigation shows that the average cost of renting a home on the Metro Map is £560. However, there is a £545 difference between the £938 a month paid to rent in Haymarket and Monument and the £393 paid in Jarrow.

At £808, Jesmond is the most expensive place outside of central Newcastle in which to rent. This is followed by West Jesmond (£726) and Tynemouth and Gateshead (£723).

On the flip side, Jarrow (£393) is the cheapest place in the region to rent, followed by Tyne Dock (£399), Wallsend (£412) and Hadrian Road (£413).

The map also reveals the average cost of renting a two-bedroom property within a quarter of a mile of all of the Metro’s 60 stations. This shows where Tyne and Wear renters can potentially locate a bargain.

Highs and lows

Excluding central Newcastle, the top five most expensive places to rent in Tyne and Wear per calendar month are:

Jesmond-£808
West Jesmond-£726
Tynemouth/Gateshead-£723
Whitley Bay-£673
Cullercoats-£660

The five cheapest areas to rent are:

Jarrow-£393
Tyne Dock-£399
Hadrian Road-£413
Chichester/Byker-£423
Meadow Well-£425

How do rental costs vary between North East metro stations?

Between stations, the largest differences were found to be:

Manors to Byker-£477
North Shields to Whitley Bay-£235
Gateshead to Central-£212
Gateshead to Gateshead Stadium-£148
Haymarket to Jesmond-£130

Location

Managing Director of KIS, Ajay Jagota, commented, ‘location, location, location is one of the classic golden rules of property, but month after month I’m stuck struck by the fact that people are prepared to pay as much as £5724 a year to live in a particular area. To put that into context Metro journey of three or four minutes-or even a bike ride of a little more than five-from Gateshead to Gateshead stadium is worth almost £2,000 a year in rent.’[1]

‘It’s not just the rents that cost, it’s deposits too,’ Jagota considered. ‘If you want and can live in the heart of Newcastle, you’re not just going to have to find the best part of £1000 every month in rent, the chance you’ll need to find £1407 just to move in.’[1]

‘Research this week suggests there are only five places in the UK were renting is cheaper than buying and none of those are anywhere near the North East. One of the major stumbling blocks to buying a home is all-too often the difficulty buyers have in saving up a deposit, and extra costs like deposits can really make a difference to people’s ability to save,’ Jagota concluded.[1]

[1] http://www.propertyreporter.co.uk/landlords/choosing-the-right-metro-stop-could-save-500-per-month-in-rent.html