Posts with tag: Buy-to-Let

New buy-to-let lender enters the market

Published On: February 5, 2016 at 12:35 pm

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A new buy-to-let lender has today entered the market.

New Street Mortgages is to launch its initial products with distribution open to customers via London & Country and the LSL mortgage networks of Pink and First Complete.

Fees

The lender will offer procuration fees of 0.5% on buy-to-let mortgages and has plans to extend its distribution outlets and offers later on in the year.

New Street’s lending process offers online decision-making, in conjunction with a broker portal that offers real-time case tracking. In addition, the service will offer access to underwriter notes. The firm says that by using this process, it will be possible for some customers to secure a mortgage inside five days.

In addition, there will be an ‘Advance’ range, which can analyse market sector risk and borrower profiles, in order to provide customers with a better deal where client circumstances permit.

New buy-to-let lender enters the market

New buy-to-let lender enters the market

Modern

Adrian Whittaker, Sales Director at New Street Mortgages, stated, ‘mortgage lending is ripe for modernization-and that’s what New Street is all about. The mortgage application process has not kept up with the technological advances that we have seen in other industries, for broker and customer alike, which means getting to the mortgage decision can be slow and uncertain.’[1]

‘If you combine this with the extra time that brokers need to invest in every application following the MMR, it often feels that writing mortgages is harder now than it has been in the past. At New Street, we believe that the mortgage application process should be digital, modern and transparent-and beneficial for brokers and customers alike,’ he continued.[1]

‘New Street Mortgages’ analytically-driven and modern approach to the mortgage process is bringing mortgage lending into the digital age, promising transparent decision-making and tailored solutions which cater to the individual needs of today’s consumers,’ noted David Finlay, Director of Distribution at Northview Group.[1]

‘As part of the Northview Group, New Street’s launch will complement the existing focus of Kensington Mortgages and position the Group as a brand which caters for borrowers across the mortgage market. Mortgage lending has become a slow and time-consuming process, but New Street’s use of intelligent data-driven credit profiling will offer the market fast and consistent decision-making to more straightforward cases,’ Finlay conclude

[1] http://www.propertyreporter.co.uk/finance/new-btl-lender-launches.html

 

66% of BTL mortgage applicants unaware of regulations

Published On: February 5, 2016 at 11:37 am

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An alarming new report from Direct Line for Business shows that over half of new buy-to-let mortgage applicants are unaware of new and upcoming regulations.

Accidental landlords are least likely to be aware of any changes, according to the research.

Concern

66% of applicants were found to be unaware of either the alterations to Mortgage Tax Relief. This rose to 71% of accidental landlords. Mortgage advisors believe that these type of landlords account to 17% of new applications, with buy-to-let applications increasing by 29% during the course of the last year.

In addition, data from the report shows that just 7% of mortgage advisors believe that the Mortgage Credit Directive (MCD) will have a positive effect on the sector. This was in comparison to 59% who believe it will have a negative impact.

Alterations to mortgage tax relief are also set to be brought in from April 2017. As a result, landlords will no longer to be able to remove mortgage interest payments before working out their tax bill. Instead, they will receive a tax credit equivalent to 20% basic-rate tax on the amount. The changes in Stamp Duty from April 2016 are also set to test landlords and second-property owners.

66% of BTL mortgage applicants unaware of regulations

66% of BTL mortgage applicants unaware of regulations

Changing

‘The new EU legislation on mortgages, coupled with the Government’s increase in buy-to-let taxation, could significantly alter the buy-to-let market,’ said Nick Breton, Head of Direct Line for Business. He said his firm, ‘would encourage any mortgage applicants to think carefully about the new law and how this could impact on them as a landlord.’[1]

‘With house prices in the UK rising by 7% in the year leading to October 2015 and with the estimated average deposit standing at more than £61,003, it is imperative that landlords are able to maintain a suitable amount of property to house the population of young people saving up to buy their first property, or those seeking a temporary stay in a town or city,’ he continued.[1]

[1] http://www.propertyreporter.co.uk/landlords/71-of-accidental-landlords-unaware-of-new-regulations.html

 

Will regulations force many out of BTL sector?

Published On: February 4, 2016 at 12:24 pm

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Yet another investigation into the current state of the buy-to-let market has suggested there could be a gloomy outlook for landlords.

Research by The House Crowd has indicated that buy-to-let investors are predicting a rocky road in 2016. 72% said that the forthcoming legal changes will have a detrimental effect on their investments.

What’s more, one-fifth of landlords plan to sell their properties during the course of 2016.

Changes

Instead of looking on their properties as a solid form of investment for the future, buy-to-let purchasers are becoming increasingly concerned that they are being targeted by the Government. With features such as the Mortgage Credit Directive and the increase in Stamp Duty coming into play in March and April, it is hard to argue.

Results from The House Crowd survey found:

  • Half of investors stated their retirement plans are now at risk to the changes
  • One-third said it would now become harder to support their children or grandchildren to get on the ladder
  • 38% stated that landlords should look at better ways of investing
  • 43% felt that the Government is trying to get rid of smaller landlords
Will regulations force many out of BTL sector?

Will regulations force many out of BTL sector?

Pressure

‘Property investment has long been viewed as a sensible way for the shrewd small investor to save for the future, making life a bit more comfortable and paving the way for a financially secure retirement,’ noted Frazer Fearnhead, founder of The House Crowd. ‘However, these new regulations are putting increasing pressure on those who own perhaps two or three properties, making it very difficult for smaller landlords to remain in the buy-to-let sector.’[1]

‘I’d encourage investors to look at newer options to help them remain in the game, like property crowdfunding-there is another way,’ he added.[1]

[1] http://www.propertyreporter.co.uk/finance/will-new-regulations-force-investors-out-of-btl-this-year.html

 

Stamp Duty hike driving Auction Market

Published On: February 4, 2016 at 11:29 am

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The forthcoming rise in Stamp Duty charges has been the catalyst behind a record rise in lot entries at property auctioneer Auction House during the last month.

703 lots have been entered in Auction House’s first round of auctions, representing a 13% rise from the same period one year ago.

‘Adrenaline Rush’

Founding Director of Auction House, Roger Lake, said, ‘the Chancellor’s introduction of an additional 3% stamp for investors and second-home owners has sent an adrenaline rush through the market. We have worked hard to publicise the short window that the created for sellers and buyers and this has certainly helped boost entries into our February auctions.’[1]

‘Whilst the precise details won’t become available until the Budget is unveiled next month, canny purchasers are realising that buying now prevents them being caught out by the tax surcharge, whatever form it may take,’ he continued.[1]

Stamp Duty hike driving Auction Market

Stamp Duty hike driving Auction Market

Selling

Recent investigations have suggested that buy-to-let landlords are looking to sell 500,000 homes during the next year and a further 100,000 per year until 2021.

Despite this, Lake said he is,’ not convinced that the number of properties hitting the market will be quite as high as the reports suggest. But two things we know for sure: the tax rise will come into place from 1 April 2016 and that properties will need to have completed by this date-not simply to have exchanged-to avoid the higher rate.’[1]

‘With the Budget scheduled for 16 March, that gives us a mere two weeks between having certainty of the details and the changes coming into effect. Nevertheless, our February auctions provide a chance for buyers to guarantee beating the stamp duty hike in a climate of low interest rates, with those selling benefitting from strong demand, lively bidding and a higher hammer price. Early March sales with shortened completion periods can also deliver purchases at the old Stamp Duty rates-but sellers will need to act quickly to capitalise on the opportunity,’ he concluded.[1]

[1] http://www.propertyreporter.co.uk/auctions/is-the-stamp-duty-hike-driving-the-property-auction-market.html

HR expert latest to slam Right To Rent

Published On: February 4, 2016 at 10:09 am

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A senior relocation and human resources expert is the latest person to pour scorn on the Right to Rent scheme.

Tony Coe, chief executive of relocation company Saunders 1865, feels the scheme will fail to change the behaviour of many rogue landlords. Instead, he believes the introduction of the scheme will only add more red tape to the sector.

Unnecessary

Coe also feels that companies with overseas staff working in Britain for short periods will find extra bureaucracy.

Mr Coe said, ‘what it will do is add unnecessary red tape, lead to delayed travel for staff plus more complex and expensive transactions. The major concern for anyone in HR relocating international staff to the UK is this-assignees not being allowed into rental homes due to landlord fears over contravening the Right to Rent laws.’[1]

HR expert latest to slam Right To Rent

HR expert latest to slam Right To Rent

‘Right to Rent is supposed to stop illegal immigrants from depleting the UK’s scarce supply of rental homes yet it may cause difficulties for bona fide businesses who are attempting to legally relocate employees to the UK,’ he added. [1]

Concluding, Mr Coe stated, ‘in my opinion, Right To Rent will not change the behavior of landlords who rent to illegal immigrants one iota.’[1]

[1] https://www.lettingagenttoday.co.uk/breaking-news/2016/2/right-to-rent-will-add-red-tape-not-change-behaviour-says-hr-expert

 

BTL transactions made by LTD co’s rise in January

Published On: February 3, 2016 at 11:31 am

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Transactions made by private limited companies made up 43% of the total number of buy-to-let applications during January.

This is the main finding of a report conducted by broker Mortgages for Business, with this figure up from the 38% recorded in December.

Feasible option

‘Landlords have woken up to the fact that transacting via a corporate vehicle is a feasible option and in many cases, the most prudent route going forward,’ noted David Whittaker, Managing Director of Mortgages for Business. ‘I wouldn’t be surprised if the percentage continues to rise as landlords, especially the higher tax rate-paying ones, prepare for the forthcoming changes to relief on finance costs.’[1]

BTL transactions made by LTD co's rise in January

BTL transactions made by LTD co’s rise in January

‘The increase is due to landlords trying to get as many purchases as they can completed before the stamp duty surcharge comes into effect on 1 April, after which I would expect transactions to return to more considered levels,’ he added.[1]

The total number of applications for buy-to-let mortgages, made by both individuals and limited companies, increased by 27% in January, in comparison to December 2015. Undoubtedly, the upcoming changes in Stamp Duty surcharges and the abolition of tax-relief for landlords have been key factors in this growth.

[1] https://www.landlordtoday.co.uk/breaking-news/2016/2/ltd-co-btl-transactions-rise-again-in-january