Posts with tag: Buy-to-Let

Buy-to-let rush drives house price growth

Published On: March 10, 2016 at 2:06 pm

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House price growth in England surged during February in comparison to the previous month and was driven by a rush in buy-to-let activity.

These are the key results from the latest Your Move Index, which suggests buy-to-let investors looking to complete deals before the Stamp Duty changes come into force in April 1st are pushing prices further upwards.

Rises

Average property values increased by 0.8%, or by £2,277 on a monthly basis. Demand from buy-to-let lenders and second home buyers led to a 12% month-on-month increase in sales.

Additionally, data from the report shows average prices were up 6.2% year-on-year. However, if London and the South East are excluded from this, yearly growth dips to 4.6%. The average house price now stands at £289,229.

In the capital, London house prices increased by 6.8%, or £36,903 during the last twelve months. The average price of a property in London is currently £582,783. Hull has also seen a significant rise in property values, rising by 0.9% in one month to hit a new record of £111,409. The city’s recently awarded City of Culture has undoubtedly had an impact on property prices.

Rush to complete

Richard Sexton, director of e.surv chartered surveyors, noted, ‘growth could be as a result of buy-to-let investors rushing to complete quickly to avoid April’s additional 3% Stamp Duty surcharge, which has also seen sales shoot up 11.8% since January.’[1]

Sexton feels that the figures represent brilliant news for existing homeowners, particularly those who are thinking of cashing in on additional demand. ‘Typical property values are now £16,866 higher year-on-year, the fastest annual growth rate seen in eleven months, driven by the gulf in the number of aspiring home buyers, compared to the limited supply of homes for sale,’ he observed.[1]

Buy-to-let rush drives house price growth

Buy-to-let rush drives house price growth

Regional records

The Index also reveals that the East of England’s property prices are rising quicker than those in London. In fact, the East of England saw the fastest growing property price increase of all regions of the country with a 7.2% rise in the last 12 months.

‘This pace is being fuelled by commuter towns, as London’s workers search for more affordable housing. The trend towards higher house price growth in cheaper areas can also be seen elsewhere,’ Mr Sexton explained.[1]

‘The upswing in Hull’s home values is due to the increase in new jobs resulting in more demand, with major firms including Samsung lifting employment in the city. Recently winning City of Culture 2017 may have provided an additional boost to demand for property within the city, as the pickup in tourism supports the local economy as a result of the award,’ he continued.[1]

‘Despite the upswing in the capital’s overall property values, sales have slipped 4.6% in the three months from November 2015 to January 2016, compared to the same three months one year earlier. This is largely due to a lack of homes for sale combined with more caution at the top of the market, rather than a general decline in demand, ‘Sexton concluded.[1]

[1] http://www.propertywire.com/news/europe/england-wales-buy-let-2016031011654.html

Rush in BTL activity sees FTB enquiries slide

Published On: March 9, 2016 at 1:48 pm

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Latest figures released by comparethemarket reveal that the ongoing buy-to-let surge is seeing many first-time buyers squeezed out of the market.

Many would-be buyers are struggling to make their way out of rental accommodation and onto the housing ladder.

Growth

Data from the analysis shows that the proportion of buy-to-let mortgage enquiries rose by 4.4% to stand at 18.2% of the total number of enquiries during the last year. Annually, the proportion of enquiries for initial buyers fell by 3.7% to hit 23.5%.

In January of this year, there was little sign of the market reducing. Year-on-year growth for the month stood at 16%, with a 62% increase in comparison to December.

Despite buy-to-let investors rushing to beat the new stamp duty deadline on all purchases from April 1st, comparethemarket said there is, ‘little expectation’ of buy-to-let enquiries outstripping the number of first-time buyer enquiries.

Rush in BTL activity sees FTB enquiries slide

Rush in BTL activity sees FTB enquiries slide

Risk to stability

Jody Baker, Head of Money for comparethemarket.com noted, ‘the buy-to-let market has been subject to both extensive discussion and criticism over the past year with even the Bank of England’s Financial Policy Committee labelling it a risk to the UK’s financial stability.’[1]

Baker feels that, ‘this data only reinforces the view that over the past year, families and others looking to get a foot on the housing ladder are being priced out by landlords.’ Concluding, Baker said that it was, ‘great to see the Government take action in the Autumn Statement, but time will tell as to what the material impact will be on the market after 1st April.’[1]

[1] http://www.propertyreporter.co.uk/landlords/btl-boom-sees-ftb-enquiries-dr0p-37.html

New initiative offers advice for landlords and tenants

Published On: March 8, 2016 at 11:51 am

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Categories: Landlord News

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A new initiative has promised to offer charities and other organisations free training to pass on to both landlords and tenants, advising them ‘how to rent.’

The partnership is between the Residential Landlords Association (RLA) and the Tenancy Deposit Scheme Charitable Foundation. Entitled train2rent, the initiative will see groups such as housing associations, trusts and residents’ groups offered access to features such as training packs and learning material. In turn, this will allow them to pass on information about renting a property.

Details

There is to be a separate information pack offering advice for landlords and tenants. These will include the course presentation and workbook, plus a timetable for training and practical exercises.

Included in the information for landlords resource pack will be details of their legal responsibilities, including:

  • how to conduct Right to Rent checks
  • protecting deposits
  • making gas, fire and electrical safety assessments
  • starting and ending a tenancy
New initiative offers advice for landlords and tenants

New initiative offers advice for landlords and tenants

The tenant resource will cover topics including:

  • their legal rights and responsibilities
  • how to find the correct property
  • different types of tenancy agreements

Positive outcome

Chair of the Tenancy Deposit Scheme Charitable Foundation, Martin Partington, said, ‘it’s been a common theme in the bids we have received that small organisations have wanted funding to produce educational materials or host a workshop. The trustees felt that our money was better spent commissioning a set of materials that these groups could use, free of charge, to deliver the same outcome.’[1]

These courses will apply to properties located in England, with the licence to use the resources lasting for a period of 30 days.

[1] https://www.lettingagenttoday.co.uk/breaking-news/2016/3/industry-groups-push-training-for-landlords-and-tenants-on-how-to-rent

 

 

Eviction orders for tenants fall in Q4 of 2015

Published On: March 8, 2016 at 10:15 am

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The final quarter of 2016 saw 26,676 court orders issued for the eviction of private rental sector tenants.

According to the survey by Your Move and Reeds Rains, the number of orders was down by 0.4% in comparison to quarter three of 2015. Annually, there were 5.3% fewer evictions than the 28,167 recorded in the same three-month period in 2014.

Falls

Data from the report indicates that 32% of private tenants are in serious rent arrears, of more than two months rent. At present there are 82,900 renting households in the serious arrears bracket.

Cases of landlords falling behind with their own finances have also dropped. In the final three months of 2015, there were 5,500 cases of buy-to-let mortgage arrears, a fall from the 3.5% recorded in the previous quarter.

Annually, the total number of buy-to-let mortgages in arrears has fallen by 54% after totalling 11,900 cases in the last quarter of 2014.

Eviction orders for tenants fall in Q4 of 2015

Eviction orders for tenants fall in Q4 of 2015

Growing

Adrian Gill, director of Your Move and Reeds Rains, noted, ‘landlords and the buy-to-let industry have come in for serious criticism over the last year-but the overwhelming evidence points to a vital, growing and successful industry.’[1]

‘Landlords in the UK are providing more homes to let every month, expanding supply for tenants-who avoid any serious problems paying the rent in more than 98 per cent of cases. When late rent does happen, landlords appear to be extremely flexible in the majority of cases and eviction orders and decreasingly necessary. Buy-to-let mortgages are also increasingly reliable for lenders, as landlords are ever less likely to fall into arrears themselves,’ Mr Gill added.[2]

[1] https://www.lettingagenttoday.co.uk/breaking-news/2016/3/over-26-000-eviction-orders-served-on-private-tenants-in-one-quarter

 

Tenants staying in the PRS for longer

Published On: March 7, 2016 at 1:40 pm

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Landlords are being warned to prepare for longer tenancy agreements, following a new survey by the Association of Independent Inventory Clerks (AIIC).

Data from the report shows that the average length of a private tenancy is now four years, up from three and a half recorded in the previous survey.

As such, the organisation said that more thorough preparation must be conducted by landlords, including choosing furniture and interior design schemes.

Rises

The report also found that 46% of 25-24 year olds live in the Private Rented Sector during 2014-15, up from 24% in 2004-05.

Patricia Barber, Chair of the AIIC, noted, ‘despite numerous reports suggesting that the average tenant doesn’t want a long-term contract, the official statistics show that average tenancy lengths are increasing-particularly among families-as people rent for longer.’[1]

These figures should make landlords think more about what features could make their rental property feel more homely. In addition, they should consider how these changes might entice renters to stay in the property for longer.

Organisation

Barber also believes that a rise of longer-term renting underlines the importance of landlords being organised with their administration requirements. She said, ‘when tenants stick around for longer, often the chances of confusion and disagreement over certain issues are increased when the tenancy does eventually come to an end.’[1]

Tenants staying in the PRS for longer

Tenants staying in the PRS for longer

As a result, she said, ‘the longer time goes on, the more likely landlords and tenants are to forget details from the tenancy agreement or important information about the deposit and that’s why stringent administration- keeping copies of everything and organising it accordingly-is so important.’[1]

Important inventories

The AIIC is reminding landlords of their duties and the need for evidence and records, particularly for longer-term tenancies. A professionally prepared, thorough and detailed inventory is essential at the beginning of all tenancy agreements.

‘There are more grey areas over the condition of a property the longer a tenancy goes on,’ Barber continued. ‘A detailed inventory will help landlords and tenants to determine exactly how the property’s condition has changed over the course of the tenancy, what can be deemed fair wear and tear and what needs to be replaced and therefore deducted from the tenant’s deposit.’[1]

An inventory , which has been signed and agreed by the tenant, is the most important piece of evidence that a landlord or agent can possess, if a dispute should arise at the conclusion of a tenancy.

[1] http://www.propertyreporter.co.uk/landlords/landlords-warned-they-must-prepare-for-longer-tenancies.html

Upcoming tax changes not deterring many landlords

Published On: March 7, 2016 at 11:38 am

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A new survey of 170 property investors has revealed that many are not being deterred by the forthcoming changes in stamp duty land tax.

The investigation by Shawbrook suggests that 56% of their clients are looking to purchase a buy-to-let property within the next year.

Tax changes

With the tax changes fast approaching, the survey also revealed that 40% of investors plan to launch a limited company for their properties to soften the impact. 33% said that they planned to increase rents as a result of the alterations.

These new changes to both stamp duty and tax relief have led many investors to reassess their ambitions. Of the 44% of people who said they did not plan on purchasing a new buy-to-let property in the next twelve months, 37% said this was due to the tax relief changes. 16% said that the 3% stamp duty levy on second homes and buy-to-let properties was the reason they will not be investing.

Issues

In addition, the changes show that 49% of clients believe regulation to be the largest challenge facing property investors during the next six months. This is a huge jump from the same time last year, where only 23% of investors believed regulations to be their biggest investment hurdle.

Upcoming tax changes not deterring many landlords

Upcoming tax changes not deterring many landlords

Encouragingly, despite the changes, 61% of respondents said that they had a positive outlook for the next year. This proportion believe there will be an increase in property value over the coming year. 43% said they saw an increase in tenant demand in 2015, with 61% saying their rental income also rose.

44% said that they were confident their business would grow further during 2015.

Positivity

Karen Bennett, Sales and Marketing Director Commercial Mortgages noted, ‘as a lender, it is always great to see such positivity in the market and as with our Broker Barometer conducted in late 2015, it seems that there is a lot of optimism amongst property professionals also. Obviously the new changes will have an effect and may instill more caution across the market; however, Shawbrook is well-placed to adapt to change and we are expecting the market to remain buoyant.’[1]

[1] http://www.propertyreporter.co.uk/landlords/majority-of-btl-investors-say-its-business-as-usual-despite-tax-changes.html