Posts with tag: first time landlords

Less first time buy-to-let landlords are choosing to invest in London

Published On: March 25, 2021 at 8:52 am

Tags: Buy-to-Let,first time landlords,London,Quotezone.co.uk

Data from insurance comparison provider Quotezone.co.uk shows a 41% drop in first time buy-to-let landlords in London during 2020 when compared to 2019.

It points out that this decrease is in direct opposition to the rest of the country, which has seen first-time landlords spike as high as 62%.

Greg Wilson, CEO of Quotezone.co.uk, comments: “Alongside the recent news that almost 700,000 Londoners have moved out of the city due to the pandemic, our data shows a 41% drop for first-time buy-to-let landlords in London in 2020 compared with 2019. This contrasts with the rest of the UK, with almost every other region showing a year-on-year increase, which could be to do with buyers taking advantage of the Government’s Stamp Duty holiday.

“While COVID has created a temporary shopping spree within the housing market, I fear this temporary boost in sales may be short-lived as the economic aftermath of the pandemic is yet to be revealed and the Stamp Duty holiday is due to expire at the end of June. The region-specific data showing a decline in London could be the first signs of COVID-19’s true impact on the city’s property market and a potentially stark warning for the rest of the UK.

“However, while there has been a huge drop in demand for London properties, rental properties haven’t gone untouched by the crisis with many tenants on furlough or facing redundancies and social distancing creating physical barriers to the properties making routine maintenance and repairs difficult. It is perhaps more important than ever to ensure landlord insurance policies are thorough, accurate and up to date so that landlords are fully protected should a claim be needed.”

Regional statistics from Quotezone.co.uk

Region	% change
Yorkshire	61.90%
North East	34.29%
South East	50.75%
London	-40.63%
South West	27.87%
North West	50.00%

The Costs all Landlords Need to Consider

Published On: September 26, 2017 at 8:24 am

Author: Em Morley

Categories: Landlord News

Tags: Buy-to-Let,first time landlords,property investors

Entering the rental market with buy-to-let properties is a popular way to gain extra income. The landlord community is made up of professional property investors, first time buy-to-let landlords and accidental landlords, all with varied levels of experience and knowledge, but, if you haven’t done this before, you might not be as informed as you could be when it comes to planning for all of the costs that can be incurred as a landlord.

We’re taking a look at some important cost points to consider for first time, or anytime, landlords; being fully informed of these costs could even save you money here and there.

Your mortgage

This is a cost you may or may not have to pay each month, however, if you do, this could likely be the biggest monthly cost for you. Having a buy-to-let mortgage could mean having to put down a larger deposit and also pay higher interest rates, so make sure you’re getting the best deal available and keep on top of this by checking regularly for better or improved mortgage offers.

Loss of rent

Although ideally your rent will cover or more than cover your mortgage payments, you should also consider any possible losses on rent. This could be due to the length of time taken to find or replace a tenant, resulting in an empty property, or due to unpaid rent. Although many insurance will cover some cases of unpaid rent, this is a possible loss you should be aware of.

Insurance

As a landlord, you’ll need to take out landlord insurance. This is not just to protect and help your tenants, but also protect your property, your investment. There are varying types of insurance, so make sure you do your research into what will and will not be protected; this way you are also in a good position to let your tenants know exactly what they need to insure.

Letting agent fees

Unless you have a tenant lined up already, you’ll need to find a tenant or tenants to rent your property to. This will mean either carrying out this search yourself or traditionally using a letting agent. High letting agent fees are a cost we hear a lot about, however, there are now alternatives at a much lower cost, such as Letproof.com, which allows you to search for tenants, deal with them and manage your property directly, skipping the agent and the costs.

Legislative changes

Changes to legislation can cost you. Keeping up with legislative changes is important to make sure you’re not missing anything that could affect you or your property. Changes to mortgage interest tax relief last year have taken their toll on landlords, and mydeposits found the majority of landlords are those using buy-to-let as a “part-time income supplement” and therefore may not keep as up to date with changes.

Repairs

Whether your buy-to-let property is new or old, there will always be small repairs which need to be tended to by the landlord, you. These are costs that can not be planned for and can unfortunately also include occasional larger expenses too, so be prepared for the possibility.

First Time Landlord Product Availability in Decline

Published On: April 12, 2017 at 9:49 am

Author: Em Morley

Categories: Finance News

Tags: buy to let mortgages,buy-to-let finance,first time landlords,mortgages

First Time Landlord Product Availability in Decline

The availability of first time landlord mortgage products is in decline, according to research from Moneyfacts.co.uk.

Although the overall number of buy-to-let mortgage products has risen, the availability of deals for first time landlords has dropped by 5% over the past year.

The Finance Expert at Moneyfacts.co.uk, Charlotte Nelson, explains: “Over the past few years, the number of buy-to-let products on the market has increased but, despite this, new landlords have missed out on the buy-to-let boom, as they now have a smaller percentage of the market to choose from, following a drop in availability of 13% over just two years.

“This can be explained in part by the uncertainty that exists in the market at current, which has made some providers slightly more risk-averse. By their very nature, first time landlords lack experience in managing rental properties, and this is considered more of a risk now than perhaps it once was.”

She continues: “The tougher affordability rules which have reduced the amount landlords can potentially borrow are being felt in the market, with the average two-year fixed rate at 70% loan-to-value [LTV] having risen by 0.14% to 3.16% since January. This could be disproportionally affecting first time landlords, who may want to borrow at higher LTVs.

“This extra regulation means borrowers will face added checks and questions about their finances. So, any would-be landlords will need to do their homework and prepare in advance to ensure they can pass with flying colours and get the buy-to-let mortgage they want.”

However, she adds: “Despite the reduction in availability for first time landlords, deals have not been removed completely, and with savings rates remaining in dire straits, buy-to-let still looks like a good option. However, anyone considering it should seek the advice of an independent financial adviser to see if this riskier option is the right choice for them.”

If you a first time landlord considering a property investment, you must be aware of the recent changes introduced in the buy-to-let sector regarding tax relief. This Government guide explains exactly how you will be affected: /government-guide-tax-relief-changes-residential-landlords/

Drop in Mortgages for First Time Landlords

Published On: July 5, 2016 at 8:47 am

Author: Em Morley

Categories: Landlord News

Tags: buy to let mortgages,buy-to-let finance,buy-to-let landlords,first time landlords,mortgages

The number of buy-to-let mortgages for first time landlords has dropped to a record low, according to new research from Moneyfacts.co.uk.

Annually, however, the overall amount of buy-to-let mortgages has risen, which would lead one to believe that the availability of deals for first time landlords has also grown.

Five years ago, just 434 buy-to-let products were available for first time landlords, compared to 813 today. The proportion of buy-to-let mortgages available to first time landlords has also fallen, from 82% five years ago to 75% today.

[table id=19 /]

Drop in Mortgages for First Time Landlords

The Finance Expert at Moneyfacts.co.uk, Charlotte Nelson, comments: “Despite all the changes to regulation in the buy-to-let market, the number of buy-to-let mortgages has increased; however, first time landlords have been missing out on this boost in product numbers. Indeed, the percentage of the market that is available to new landlords has now dropped to just 75%, down by around 10% in two years.

“As first time landlords don’t have a proven track record in managing rental properties, offering them a buy-to-let mortgage poses a greater risk to the lender, and it’s this risk that is making the number of first time landlord deals remain relatively static.”

She continues: “The additional regulation in the buy-to-let market and the added economic uncertainty following the Brexit vote means even more lenders may reconsider whether first time landlords are a safe bet. As a result, would-be landlords are likely to face more probing questions about their finances than their more experienced counterparts.

“Nevertheless, high rents and rock-bottom mortgage rates mean that buy-to-let is still an attractive proposition for aspiring landlords, particularly those who are fed up with the dismal savings options currently available. However, buy-to-let is not without its risks, so anyone considering it as an option should seek the advice of an independent financial adviser to determine whether it is the best choice for them.”