Posts with tag: investors

More investors turning to commercial property investment

Published On: August 29, 2017 at 1:05 pm

Tags: commercial property,investors,mortgage interest tax relief,Stamp Duty

A rising number of investors are beginning to turn away from residential property and instead of looking to the commercial property market.

That is the view of James Emson, Managing Director of Clive Emson Auctioneers, who believes that investors are being deterred by recent tax hikes.

Commercial Investment

Mr Emson said that recent sales have been given a lift mainly by commercial investors, wit the phasing out of mortgage interest rate relief and introduction of 3% additional stamp duty taking their toll.

The most recent statistics from the firm show that national auction sales of commercial lots rose by 16% last month in comparison to the previous year. This has taken the total value raised to £190m.

More investors turning to commercial property investment

Commenting on the results, Mr Emson said: ‘We are noticing a definite trend towards commercial property sales as investors seek to widen their portfolios. The increased popularity of commercial lots comes as continuing record low interest rates help boost the market while residential sales are not helped by interest rate relief and stamp duty changes.’[1]

In its most recent auction, Clive Emson sold property worth £15m and achieved a sale rate of over 70% from 139 lots.

[1] https://www.propertyinvestortoday.co.uk/breaking-news/2017/8/more-investors-turn-to-commercial-property-as-residential-sales-dip

Is UK property price growth rising at an unattainable rate?

Published On: June 20, 2017 at 1:07 pm

Author: Em Morley

Categories: Property News

Tags: house price growth,investors,property,property prices

Yesterday saw Rightmove release data indicating that the average property price in the UK slipped by 0.4% in June, in comparison to the previous month.

However, would-be property investors should take these figures with a pinch of salt according to Jeremy Duncombe, director at Legal & General Mortgage Club.

Prices

Mr Duncombe, a mortgage expert, explains that despite the typical asking price this month dropping to £316,109, prices are still up by 1.8% on a yearly basis.

Despite this being the lowest rate of annual price growth seen since April 2013, residential property prices are still rising. However, there are concerns that in regions where affordability levels are stretched, less households are able to take part in the market.

Duncombe observed: ‘Although the data shows a minor decrease in monthly house price growth, on a year-on-year basis, house prices are still rising. Potential buyers are having to increase their borrowings, or depend on family members to help fund a deposit.’[1]

‘For many workers, price increases are occurring at an unattainable rate, with house prices now at a record 7.6 times earnings. For London, this is stretched to more than 10 ten times,’ he continued.[1]

Is UK property price growth rising at an unattainable rate?

Supply

A main cause for the increase in property prices is due to the fact that demand continues to outstrip supply in many regions of Britain. This once again underlines the need for new affordable housing to be developed.

Mr Duncombe went on to say: ‘Once the dust has settled in the newly-formed government, the task of building more affordable housing needs to become an urgent priority on the agenda. Building affordable housing in the right places will help first time buyers to take their first steps onto the property ladder.’[1]

[1] https://www.propertyinvestortoday.co.uk/breaking-news/2017/6/uk-property-price-growth-is-occurring-at-an-unattainable-rate

Tax reforms putting investors off

Published On: June 14, 2017 at 8:40 am

Author: Em Morley

Categories: Finance News

Tags: Buy-to-Let,buy-to-let sector,investors,landlords,tax

The number of mortgages approved for buy-to-let purchases fell during April, according to the latest figures released from the Council of Mortgages Lenders (CML).

This data indicates that that many landlords are being driven from the market due to alterations to mortgage interest tax relief.

Hits

Government measures aimed at reducing growth within the buy-to-let sector, such as the 3% stamp duty surcharge on buy-to-let homes, are beginning to hit smaller investors in particular.

The CML’s data shows that there was a 16% fall in buy-to-let lending between March and April. In addition, the value of lending in the sector was 16% lower month-on-month.

On the other hand, first-time buyers are taking advantage of competitive rates- as shown by the 25,400 loans taken out by this group during April. These was collectively worth £4.1bn, down by 16% month-on-month but up by 8% year-on-year.

Tax reforms putting investors off

One-sided

Alastair McKee, managing director of One 77 Mortgages, noted: ‘The market is less lopsided than one-sided. Against a backdrop of cheap loans, Help to Buy and significantly reduced competition from landlords, first-time buyers are having a field day.’[1]

‘With many landlords still reeling from the raft of tax and stress-testing changes, first-time buyers see an opportunity and are taking it,’ Mr McKee added.[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2017/6/tax-reforms-continue-to-deter-buy-to-let-landlords

More landlords are using a letting agent

Published On: June 1, 2017 at 9:33 am

Author: Em Morley

Categories: Landlord News

Tags: agent fees,Buy-to-Let,investors,landlords,letting agents

A survey of property investors has uncovered that the number of landlords using a letting agent to assist them in managing their property has risen since the end of 2016.

61% of landlords said that they presently use a letting agent to manage their properties- an increase of 7% since the final quarter of last year. This rise goes against tradition, with the number of landlords using an agent normally more consistent in number.

Self-Managing Decrease

In addition, the research shows that the proportion of landlords choosing to self-manage their property has fallen by 7% in the last year – from 46% to 39%.

What’s more, more landlords in the North East were revealed to use an agent in comparison to any other region of England. This said, agent usage is greater in Scotland with 79%.

On the other hand, the North West is the region where landlords are least likely to use an agent, with falls of 5% since the end of 2016.

The news of landlords favouring the use of letting agents is interesting, given the proposed ban on charging fees to tenants.

More landlords are using a letting agent

Changing Trends

Richard Lambert, CEO at the National Landlords Association, observed: ‘As landlords plan ahead to compensate for the tax changes over the next few years we would expect to see the number who use an agent to slowly fall away, and for more to start considering whether they are able to manage their properties themselves.’[1]

‘However, this sudden spike, which is completely out of step with recent trends, completely turns this theory on its head. The big question is whether or not it’s a blip or if it will continue to rise,’ he added.[1]

Richard Price, Executive Director at UKALA, also stated: ‘There have been some regional fluctuations, but overall these findings show that an increasing proportion of landlords rely on agents at present, which is testament to the professional work undertaken by the vast majority of agents in the sector.’[1]

‘It’s an uncertain time for anyone who owns a buy-to-let property, so the steady hand of a reputable agent is exactly what many landlords are looking for right now.’[1]

[1] http://www.propertyreporter.co.uk/landlords/letting-agent-use-sees-sudden-spike-of-activity.html

Investors in Scotland enjoying higher returns

Published On: May 30, 2017 at 8:53 am

Author: Em Morley

Categories: Landlord News

Tags: buy-to-let landlords,investors,rental market,Scotland

Buy-to-let landlords in Scotland are enjoying better returns on their investment than their English counterparts, according to the most recent Scotland Buy to Let Index from Your Move.

The Index reveals that the average Scottish rental price increases by 6% during the year to April. As such, the typical Scottish rental property let for £574 per month, with all regions of the country seeing an increase in the average rental price.

Rises

Rental prices in the Edinburgh and Lothians region rose by 2% in the last 12 months to hit an average of £655pcm, according to the report.

The price growth here is being driven by a fall in suitable housing stock, particularly in the city centre, where demand is strong.

However, there was faster growth in the south of Scotland, where rental values increased by 7.1% in the 12 months to April to hit an average of £564pcm.

Investors in Scotland enjoying higher returns

Family Demand

In the East of Scotland, average rents rose by 2% to reach £655pcm – largely due to a rise in demand from families searching for three and four bedroom properties.

Inverness was another region to see an increase in demand for family properties.

Brian Moran, letting director of Your Move Scotland, said: ‘Demand continues to outstrip supply in Edinburgh, with this driving the price increases in all areas of the capital. The wider Lothians area remains very popular and any property with an EH postcode is in very high demand. Prices here continue to outstrip the rest of Scotland by some margin.’[1]

‘Yet Edinburgh wasn’t the area which had the fastest growth in the country. Prices in the south of Scotland have risen 7.1% in the last year, a stellar performance. Landlords across Scotland also continue to enjoy higher returns on their investment than their counterparts in England and Wales, with the typical property offering a 5% yield,’ Mr Moran added.[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2017/5/landlords-in-scotland-enjoy-higher-returns-on-their-investment

Who tops the Premier League table for rental yields?

Published On: May 26, 2017 at 10:12 am

Author: Em Morley

Categories: Landlord News

Tags: Buy-to-Let,Football,investors,Premier League

With the F.A Cup and Play Off finals set to bring the curtain down on another domestic football season, an interesting new-look Premier League table has been released.

The table, collated by North-East based sales and lettings firm KIS and deposit-free renting solution Dlighted, positions the 20 Premier League clubs on the strength of their local property market.

More specifically, the standings show positions if team were judged on average returns for buy-to-let let investors for two-bedroom properties in their local postcode area.

Mersey Pride

Merseyside took the title, with Everton pipping neighbours Liverpool to the crown by just 0.3%. Properties in L4 offer average returns to investors of 9%, in comparison to 8.7% in Anfield’s postcode region of L6.

The Champions League spots were taken by this years relegated sides Middlesbrough, Hull and Sunderland, where returns are 8.5% 7.1% and 7% respectively.

On the other hand, Premier League Champions Chelsea would be relegated in this table, alongside runners-up Tottenham and new Europa-League members Arsenal. Typical returns in these regions amount to 2.2%, 1.2% and 2.7%.

Manchester United survived the drop by the skin of their teeth, finishing 17^th with yields of 3.8%.

Who tops the Premier League table for rental yields?

North-East

Ajay Jagota, founder of Dlighted and KIS, observed: ‘It’s been a tough year for fans of the Premier League teams in our native North East and we’re glad that there’s at least one table where Sunderland and Middlesbrough are close to the top.’

“Even though this is all just a bit of fun and not a serious investment guide, we have inadvertently learned something very interesting about the state of the buy-to-let market in England and Wales.’

‘There is a theory in the industry that landlords are increasingly turning away from London and the South East and investing instead in other parts of the country. With no London club finishing higher than 14th and North East and North West clubs dominating the league, our table suggests that this could actually be a very wise move.’[1]

[1] http://www.propertyreporter.co.uk/property/everton-top-the-premier-league-of-renting.html