Posts with tag: Buy-to-Let

Developers call for professional approach to drive up BTL sector standards

Published On: July 20, 2017 at 8:54 am

Tags: build to rent,Buy-to-Let,landlords,private rental sector,tenants

The most recent English Housing Survey published by The Department for Communities and Local Government has underlined the need for improved standards in the market.

More than one-quarter of homes in the private rented sector were found to have failed to meet the Government’s Decent Homes standards. This has led to calls for a more professional approach in order to improve conditions, from many developers of Build to Rent housing.

Substandard

28% of properties in the sector are currently considered to be in a substandard condition – taking into account electrical safety, disrepair, damp and other factors. However, there is a marked improvement from a decade ago, when this figure stood at 47%.

Worryingly, the survey revealed that nearly one in five of those living in the private rental sector lacked basic fire protection, such as smoke alarms. This is alarming considering that the number of private renters has nearly doubled during the last ten years.

In addition, the survey indicates that a number of people renting from a private landlord suffer from a lack of security. This is highlighted by the fact that nearly two-thirds of tenants evicted from their property were pushed out as their landlord wanted to use or sell the accommodation.

Security

As Jean Marc-Vandevivere, Chief Executive of PLATFORM, notes: ‘The issues across the private rented sector are often ones of security, from tenancy length to fire protection.’[1]

‘Those in the build to rent sector have a vested interest in keeping hold of their tenants and ensuring that the homes we provide are to the highest possible standard. The continual growth of the private rented sector demands a change in approach, we need to see a shift towards professionally managed homes that provide what renters are really looking for, a secure place to live and grow.’[1]

Developers call for professional approach to drive up BTL sector standards

Dissatisfaction

Johnny Caddick, managing director at Moda Living, observed that the results of the survey found that dissatisfaction rates of those living in the private rented sector was the greatest of any tenure group.

With over 20% of tenants unhappy with their accommodation, this is a greater rate than 10% for social housing a 1% of owner occupiers.

Mr Caddick said: ‘The many real concerns people have around renting are totally justified, but our aim is to address all of these with purpose-built developments that are managed 24/7 and which engender a real sense of community.’

‘We have a commercial imperative to do things properly, whereas traditional buy to let landlords have little incentive to maintain and upgrade knackered old properties. Renters in Britain deserve a better deal – as they receive in the U.S. and Europe.’[1]

[1] https://www.propertyinvestortoday.co.uk/breaking-news/2017/7/–professional-approach-needed-to-drive-up-standards-in-prs-claim-btl-developers

Rental market activity cooled in June

Published On: July 19, 2017 at 9:01 am

Author: Em Morley

Categories: Property News

Tags: Buy-to-Let,landlords,lets,property

The most recent Agency Express Property Activity Index reveals that there was a fall in the number of properties let during the last month.

This was due to a lack of supply restricting choice for would-be renters, according to the report.

Let Properties

In all, the percentage of properties ‘let’ slipped to stand at -1.9%, with historical records indicating that the figure for properties ‘let’ during June is currently at its lowest level for three years.

While these figures for properties ‘let’ fell during the month, new listings ‘to let’ did see a small rise of 0.9%. However, over a three-month rolling period, figures recorded across the country remain down. New listings are at -2.3% and properties ‘let’ at -4.9%.

This report seems consistent with the most recent one from the Council of Mortgage Lenders, which shows that less buy-to-let landlords are looking to add to their portfolios. Others are looking to exit the market altogether, due to the recent tax assault of buy-to-let investors.

Declines

Assessing performance across Britain, just 5 of the 12 regions covered by the Property Activity Index reported an increase in new listings ‘to let’, alongside those ‘let.’

The regions that recorded the smallest declines in properties ‘to let’ in this month’s index were:

West Midlands – 7.5%
Scotland – 4.5%
Yorkshire and the Humberside – 4.2%
Wales – 1.7%

Rental market activity cooled in June

In terms of properties ‘let by’ the smallest declines were seen in:

Wales – 9.8%
South West – 4.4%
Central England – 1.1%
North West – 1.1%

The largest declines in this month’s Property Activity Index were made in the North East. Here, new listings ‘to let’ fell to sit at -23.5% with new properties ‘ let’ standing at 26.1%.

Slow Moving

Stephen Watson, Managing Director of Agency Express, observed: ‘As we look back over historical data recorded by the Property Activity Index, we can see that June is usually a buoyant month for UK lettings. However, this year we have witnessed a slower moving market specifically in the number of properties ‘let’.’[1]

‘Moving in to July and August, if usual trends dictate we don’t anticipate any large increases in activity,’ he added.[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2017/7/uk-rental-market-slows-in-june

Flat fee mortgages for buy-to-let at record lows

Published On: July 18, 2017 at 1:40 pm

Author: Em Morley

Categories: Finance News

Tags: buy to let mortgages,Buy-to-Let,fees,landlords

The most recent data released from Mortgages for Business shows that flat fees for buy-to-let mortgages have dropped to a new low.

These fees fell by over 5% in the second quarter of 2017, from £1,446 to £1,370.

Fees

However, percentage based fees are now becoming more common with lenders. This is a good way of keeping interest rates low, while still letting profits to scale with larger loans.

Percentage-based fees now apply to 48% of the total number of buy-to-let mortgage products, having now overtaken flat fees in terms of product availability since the start of 2017.

In fact, these products have risen in number in every quarter since Q2 2016.

With percentage-based fees becoming more common, the market has seen a reduction in the availability of fee-free options. Now, just 11% of buy-to-let mortgage products have no arranged fees – a fall from 15% in the opening quarter of the year.

Flat fee mortgages for buy-to-let at record lows

Exceptional Lows

Steve Olejnik, COO of Mortgages for Business, observed: ‘With interest rates still at exceptional lows, it’s all the more important to make sure you look at any additional charges when taking a buy-to-let mortgage. It is therefore promising to see a reduction in the average flat fee charged for mortgage products.’[1]

[1] http://www.propertyreporter.co.uk/landlords/btl-flat-fees-at-new-record-low.html

Outer London boroughs driving property price growth in the capital

Published On: July 18, 2017 at 10:53 am

Author: Em Morley

Categories: Property News

Tags: Buy-to-Let,house price values,London,London property values

Property prices in London have started to show a recovery since the economic downturn, with prices in some regions doubling during the period.

This has been driven by growth in outer boroughs, according to new research released by Lloyds Bank.

Rises

Average property prices in Greater London have risen by 59% from £362,641 in 2009 to £578,381 in 2016. This was in comparison to growth of 31% across England and Wales as a whole during the same timeframe.

In the City of London, prices have doubled since 2009 to £908,759. This was closely followed by the borough of Waltham Forest, which saw a rise of 97% to £433,105.

On the other hand, Tower Hamlets has seen the worst performance in the capital since the financial crisis, with average property prices rising by 54% between 2009-2016.

Prime Stagnation

The capital’s prime boroughs of the City of London, Westminster and Kensington and Chelsea saw an average increase of 80% between 2009-2014. However, there has been only small growth during the last two years.

Prices in the City of London almost doubled between 2009-2014, from £455,020 to £894,046 – a rise of 97%. Values also rose by 86% in Westminster and by 74% in Kensington and Chelsea. Since then, prices have barely shifted, with a rise of just 2% in City of London and Westminster.

Indeed, the largest growth in the last two years has been seen in London’s outer boroughs. These regions have recorded typical growth of 19% over the period, in comparison to just 4% for prime boroughs and 12% for inner boroughs. 9 of the top 10 growth areas during the same two-year period are within outer boroughs.

Outer London boroughs driving property price growth in the capital

Olympic Gains

Newham and Barking and Dagenham, the two boroughs most impacted by the financial downturn, are now recording substantial growth. The Lloyds report suggests that this is due largely to the regeneration of the regions following the magnificent 2012 Olympic Games.

Average house prices have increased from £269,529 in 2014 to £356,638 in 2016- an increase of 32%. Barking and Dagenham saw an increase of 32%, to £285,129.

Andy Mason, Mortgage Director at Lloyds Bank, said: ‘The financial crisis saw average house prices in London generally remain stable during 2007 and 2009. Following the crisis, the growth in average prices in prime boroughs outpaced other areas in London by nearly double to create its own distinct market.’[1]

‘More recently, our analysis is showing house price growth in outer London boroughs is increasing at a greater pace than inner London boroughs. Average house prices in the most expensive areas are starting to flatten, whereas London’s most affordable areas are showing healthy growth,’ he continued.[1]

Concluding, Mr Mason observed:’ A possible explanation for this is the ongoing legacy from the 2012 Olympic Games and that outer borough areas like Newham will benefit from the Crossrail link to the City due for completion at the end of 2019.’[1]

[1] http://www.propertywire.com/news/uk/prices-london-recovered-economic-downturn-led-outer-boroughs/

UK rents rise by 1.1% year-on-year to June

Published On: July 18, 2017 at 8:39 am

Author: Em Morley

Categories: Property News

Tags: Buy-to-Let,landlords,lets,UK rents

The average price of a new let in the UK increased by 1.1% year-on-year to June, according to the most recent figures released by Countrywide.

This has taken the average rent of a new let in Britain to £950pcm.

Falls

Countrywide’s research shows that London was the only region to see rents slide year-on-year – falling by 0.8%. On the other hand, the South West saw the strongest rental growth of 4.6%, which was the largest annual rise of any region covered by the research since November 2015.

By region, the average year-on-year rental figures for new lets in June were:

Greater London: Average rent £1,673 – down 0.8%
East of England: £931 – up 2.8%
South East England: £1,022 – up 1.1%
South West England: £786 – up 4.6%
Midlands: £665 – up 2.3%
North: £628 – up 2.3%
Scotland: £632 – up 1.4%
Wales: £645 – up 0.1%

Rents rise by 1.1% year-on-year to June

London Drop

Johnny Morris, Countrywide’s head of research, observed: ‘Falls in London were off-set by higher growth across the rest of the country. The fall in the capital was driven by lower rents in the outer areas of London as the ripple effect from falling rents in Central London continues.’[1]

[1] https://www.lettingagenttoday.co.uk/breaking-news/2017/7/modest-1-1-rise-in-average-rents-in-past-year-says-countrywide

Number of overseas landlords in UK falling

Published On: July 17, 2017 at 9:18 am

Author: Em Morley

Categories: Landlord News

Tags: Buy-to-Let,landlords,overseas landlords,UK rental market

The most recent report from Countrywide has revealed that the number of overseas-based landlords in the UK has slumped to a record low in 2017.

In all, overseas landlords own 5% of all homes let in Great Britain this year, down from 12% in London during 2010. London has experienced the most profound growth, with one in ten properties let by an overseas landlord. This was down from 26% in 2010.

Prime central London also saw falls, from 31% in 2010 to 23% in 2017.

Overseas Landlord Falls

The percentage of European-based investors has been slowly falling over time. During 2010, landlords from this continent made up 39% of all overseas landlords in the capital. Now however, they make up 28%.

Asia based landlords now account for 33% of overseas investors in London, followed by Europeans, North Americans (10%) and those from the Middle East (9%).

Outside of the capital, Europeans remain the largest group of overseas landlords, at 37%.

For all regions, the number of overseas-based investors has dropped since 2010. London still has the largest percentage, followed by the South East (5%). Outside of these regions however, fewer than 5% of properties are let by an overseas landlord.

Number of overseas landlords in UK falling

Rents

The typical overseas-based landlord made 35% more in rents last year than one living in the UK. Those from overseas earned £5.4bn during the year. More than half of the income received from overseas landlords came from rental properties in London.

Johnny Morris, Research Director at Countrywide, observed: ‘The growth of the private rented sector since 2010 has not been driven by overseas investors. A steady increase in foreign investors’ tax bills combined with more recent falling expectations of price growth in London has led to a decline in foreign investment in buy-to-let.’[1]

‘As well as having to contend with increased stamp duty and the annual tax on enveloped dwellings (ATED), overseas investors also saw the removal of capital gains tax exemptions in 2015. Rental growth remained at 1.1% in June. Falls in London were off-set by higher growth across the rest of the country. The fall in the capital was driven by lower rents in the outer areas of London as the ripple effect from falling rents in Central London continues,’ he added. [1]

[1] http://www.propertyreporter.co.uk/landlords/overseas-landlord-number-at-record-low.html