Posts with tag: investors

Lending to property developers falls post-Brexit

Published On: February 13, 2017 at 10:59 am

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Categories: Finance News

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A new report from peer-to-peer lending platform Saving Stream has revealed that amount lent by banks to property developers slipped in the month leading to the Brexit vote.

What’s more, it appears that this has also struggled to recover as banks cut lending to the sector as a whole.

Lending Falls

Data from the investigation shows that the amount lent by banks to developers has slipped by 7% year-on-year, from £16bn outstanding in December 2015 to £14.8bn in December last year.

Saving Stream said that the value of loans outstanding in the sector fell substantially in the run up to the Brexit vote. Values fell from £16bn in December 2015 to £14.8bn in June, with figures not recovering in the last seven months.

This fall in lending to developers is reflective of the on-going uncertainty around the Brexit decision and its subsequent impact on the UK property market.

Some economists have forecasted that consumer spending will fall later this later, with business confidence also waning. As a result, the willingness of banks to lend to developers has slipped.

Lending to property developers falls post-Brexit

Lending to property developers falls post-Brexit

Opportunities

The reluctance of traditional banks to lend is subsequently leading to more opportunities for alternative lenders, such as peer-to-peer platforms. This alternative platform is allowing investors and developers to invest in new asset purchases through liquidity.

Liam Brooke, Co-Founder of Saving Stream, noted: ‘Brexit uncertainty has hit property developers hard over the last year as traditional sources of funding tighten their belts.’[1]

‘There is a wealth of good investment opportunities out there and although banks may be paring down lending in the sector, it’s business as usual for alternative finance providers. Despite Brexit, the advantages of investing in UK property remain in place. Interest rates are likely to stay low, whilst the UK’s housing shortage is unlikely to be resolved any time soon,’ Brooke added.[1]

 

 

 

[1] http://www.propertyreporter.co.uk/finance/lending-to-property-developers-struggles-to-recover-post-brexit.htm

North East property prices see slow start to the year

Published On: February 2, 2017 at 11:20 am

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Categories: Property News

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Latest data released by KIS Housing has shown that North East property prices have had a rocky start to 2017. Prices in the region have fallen by 3.1% in the first four weeks of the year.

This means that the average costs of a home in the North East currently stands £5,200 less than at the beginning of 2017.

North-East Prices

At present, a home in the North East will set you back £163,591, which is 5% higher than the £158,755 recorded in January 2016. Interestingly, the price fall recorded last year is identical to the one seen last month.

The most prominent falls were found in Houghton-le-Spring (-6%), Killingworth (-5.5%) and Morpeth (-5.1%).

Properties in Killingworth have performed best over the period, currently 6.4% higher than those seen in January 2016.

Rental Rises

Rents in the North East increased to £584 in January, £32 or 5% higher than the same time last year.

Despite house prices falling, rental yields rose slightly by 0.1%, increasing the average North East rental yield to 4.3%.

The cheapest place to rent in the North East is Jarrow, while Durham City is the most expensive.

Peterlee offers the highest yields, with investors enjoying an average return of 6.1%. Other good performers were Newcastle (5.7%), Gateshead (5.6%) and Seaham (4.9%).

North East property prices see slow start to the year

North East property prices see slow start to the year

January Blues

Ajay Jagota, founder and MD of KIS Group, noted: ‘January is the time when people tend to view a lot of properties, having made a New Year Resolution to move home, but the actually buying tends to come later. As such we would expect to see house prices fall back at this time of year – not least as they fell by exactly the same amount in January last year!’[1]

‘It’s also been a particularly cold and dark month, which has doubtless discouraged a lot of people from house-hunting. The long-term trend for property values in the North East is incremental, sustainable growth – as shown by the year-on-year rise in values of 5%, which in places like Killingworth and Cramlington has added close to £1000 a month to house prices. There’s increasing evidence that investors are turning away from London and looking north. Increased investor demand may increasingly impact on North East property prices in 2017, for the first time since the early 2000s,’ he added.[1]

Concluding, Jagota said: ‘It’s been claimed this week that demand for rental properties is at a two-year low, but that’s not something we’ve much evidence of in the North East, where rising rents and returns for investors indicate strong demand. Certainly the most eye-catching fact about the state of the residential renting market in the North East is the fact that for the first time landlords in Newcastle are currently getting a better return on their investment than those in Gateshead.’[1]

[1] http://www.propertyreporter.co.uk/property/north-east-property-sees-a-bumpy-start-to-2017.html

 

BTL investors seemingly undeterred by Stamp Duty

Published On: February 1, 2017 at 12:38 pm

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Categories: Landlord News

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New data released from the Council of Mortgage Lenders indicates that the number of homes eligible to pay stamp duty rose to 62,800 in Q4 of 2016.

This was a rise from 56,200 in Q3 and 30,400 in Q2 and suggests that people are still believing in the buy-to-let sector.

Stamp Duty rises

The introduction of the 3% increase in Stamp Duty during April of last year was widely expected to deter many investors from purchasing. However, the lure of high yields, low void periods and capital appreciation is still proving high for a number of people.

Many investors are still adding to their portfolios , reflected in rise in the amount that buy-to-let investors borrowed to invest in property during the final stages of the year.

Landlords borrowed £3.2bn in November 2016, up by 10% month-on-month, the greatest amount since the stamp duty changes were introduced.

The Treasury made £1.19m from the additional surcharge on second homes since the second quarter of last year.

BTL investors seemingly undeterred by Stamp Duty

BTL investors seemingly undeterred by Stamp Duty

Windfall

Nick Leeming, chairman Jackson-Stops & Staff chairman, said: ‘So far £1.19m worth of stamp duty receipts are estimated to be attributable to the additional 3% element payable on second homes, a significant windfall for Treasury coffers.’[1]

‘Between Q2 and Q3 the number of second homes liable for the 3% surcharge nearly doubled. This increase is understandable as many buy-to-let investors would likely have rushed to make purchases before April 1st, but the number of liable second home transactions is up again in Q4 to 62,800. The data suggests that buy-to-let investors are not being deterred by the new tax which is supposed to be dampening demand from this group to the benefit of first-time buyers. We will see the true impact of this policy in time, but my fear is that additional costs will be passed on to tenants,’ he continued.[1]

Concluding, Leeming noted: ‘The better solution is a real concerted drive to build more homes, rather than targeting buy-to-let investors – I hope the upcoming Housing White Paper contains a real blueprint for change in this regard.’[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2017/1/buy-to-let-landlords-undeterred-by-stamp-duty-surcharge

How have property prices performed in last Chinese zodiac cycle?

Published On: January 27, 2017 at 12:56 pm

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Categories: Property News

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With the Chinese New Year arriving this weekend, Knight Frank has investigated how UK house prices have performed over the Chinese zodiac cycle of the last 12 years.

Research from the firm indicates that average house price growth was greatest during the Year of the Dog, between 2006-07. Here, property values rose by 9.26% on average, making it the luckiest animal sign for property owners and investors during the last twelve months.

Good Signs

Other profitable years were that of the Ox, Snake and Horse, with prices rising by 8.72%, 8.66% and 6.66% per year respectively.

At the other end of the scale, the Year of the Rat, between 2008-09, saw average property prices plummet -16.55% year-on-year. This was obviously due to the fact the financial crash occurred between this period.

Other poor years included the Year of the Tiger, Dragon and Rabbit, with prices ranging from -1.37, -0.08% and 0.59% in these periods.

How have property prices performed in last Chinese zodiac cycle?

How have property prices performed in last Chinese zodiac cycle?

The full list of how property prices have performed during the Chinese zodiac cycle of the last 12 years reads:

Position Start End Year Annual Price Growth (%)
1 2006 January 29 2007 February 17 Dog 9.26
2 2009 January 26 2010 February 13 Ox 8.72
3 2013 February 10 2014 January 30 Snake 8.66
4 2014 January 31 2015 February 18 Horse 6.66
5 2016 February 8 2017 January 27 Monkey 4.4*
6 2015 February 19 2016 February 7 Goat 4.37
7 2005 February 9 2006 January 28 Rooster 4.36
8 2007 February 18 2008 February 6 Boar 4.21
9 2011 February 3 2012 January 22 Rabbit 0.59
10 2012 January 23 2013 February 9 Dragon -0.08
11 2010 February 14 2011 February 2 Tiger -1.37
12 2008 February 7 2009 January 25 Rat -16.55

[1]

[1] http://www.propertyreporter.co.uk/property/which-chinese-year-has-been-the-luckiest-for-uk-house-price-growth.html

 

 

Buy-to-let market sees strong start to 2017

Published On: January 20, 2017 at 9:58 am

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Categories: Landlord News

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It is widely acknowledged that 2016 was not the best for buy-to-let landlords, The raft of changes impacting on the sector, including the additional Stamp Duty surcharge and Right to Rent, saw many investors deterred from purchasing more properties.

However, 2017 seems to have started more positively, with more landlords looking to add to their property portfolios.

Surge

The latest mortgage lending figures from Fleet Mortgages indicate that there has been a surge in demand from buy-to-let landlords trying to add to their existing properties. There were 21,000 buy-to-let loans issued during November, up 13% on October, with this trend expected to continue.

Bob Young, chief executive of Fleet Mortgages, said: ‘Overall, the market has kicked off strongly at the start of 2017 and we’ve seen a considerable amount of demand and interest from advisors on behalf of buy-to-let investors.’[1]

‘We’ve seen over the course of the last 12 months the increase in demand for limited company products, particularly when it comes to new purchases, however many landlord borrowers continue to hold their existing properties in their individual names and it’s therefore important that we continue to offer competitive products in this space,’ he continued.[1]

Demand

In order to meet growing demand, Fleet Mortgages has moved to launch five products across both its individual and limited company buy-to-let ranges.

For limited companies, the lender has launched an 80% LTV 2 year fix at 4.39%. In addition, there are two lifetimes trackers at 4.2% to 75% LTV and 4% to 65% LTV. These products also come with a 1.5% fee.

Individual products include a 2 year fix at 3.79% to 80% LTV and 4% 75% LTV tracker, both requiring a 1% fee.

Buy-to-let market sees strong to 2017

Buy-to-let market sees strong to 2017

Tougher

Despite the rise in demand for buy-to-let properties, Mr Young feels there is growing frustration at the Bank of England’s Financial Policy Committee’s decision to bring in harder mortgage affordability tests.

‘One thing we are aware of however is the increased frustration around many lenders’ rent to income calculations, their ever-changing criteria, plus major difficulties when it comes to finding products on sourcing systems and being able to compare like-for-like,’ Young concluded.[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2017/1/strong-start-to-the-year-for-buy-to-let-market

Rightmove sees improved traffic to start the year

Published On: January 16, 2017 at 1:05 pm

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Categories: Property News

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New data has revealed that the traffic to Rightmove’s website between Boxing Day and the end of the last week was up by 5% in comparison to the same period one year ago.

Full results will be provided when the firm reports to shareholders on its full year activity on February 24th.

Optimism

The portal states that the surge in activity from Boxing Day bodes well for 2017 as a whole, with factors such as Brexit to come.

‘This increase in search activity is notable given that a year ago market activity was buoyed by the November announcement that second home stamp duty would apply from April 2016,’ the portal said.[1]

In all, there was a 0.4% rise in the typical asking price of a property coming onto the market during the last month. This is equivalent to a rise of £1,086. Meanwhile, asking prices improved by 3.2% over the whole of 2016.

Rightmove sees improved traffic to start the year

Rightmove sees improved traffic to start the year

Momentum

Miles Shipside, Rightmove Director and housing market analyst, observed that the increases, ‘are indicators of the continued market momentum from the Autumn. Demand for a suitable home is such that visits to the Rightmove website are still up by 5% year-on-year, despite being compared to a period that was boosted by high demand from buy-to-let investors rushing to beat the stamp duty deadline.’[1]

Yearly comparisons for the first three months of 2017, when available, will allow for the distortion caused by April’s stamp duty deadline. Here, transactions were up by 40%, as investors rushed to beat the deadline.

Shipside went on to say: ‘Those planning to buy their first home in 2017 have more choice and less competition from other buyers than their counterparts a year ago. It’s a possible learning point for aspiring first-time buyers that a year ago, buy to let purchasers acted more quickly and closed deals at a faster rate, appearing not to take a Christmas break.’[1]

[1] https://www.estateagenttoday.co.uk/breaking-news/2017/1/rightmove-traffic-since-christmas-up-5-on-same-period-last-year