Posts with tag: investors

Where are 2017’s buy-to-let hotspots?

Published On: January 16, 2017 at 10:45 am

Tags: Buy-to-Let,buy-to-let hotspots,investors,landlords

A new investigation has revealed the latest UK buy-to-let hotspots, which include Manchester, Leeds, Cardiff and Liverpool.

Of course, the key to buy-to-let investment is to secure a solid rental yield and potential for capital growth through increased house price values.

Hotspots

Data from Aspen Wolf has revealed the latest buy-to-let hotspots to be in these locations. Oliver Ramsden, founder and director of Aspen Wolf, noted: ‘The UK property market stayed strong in 2016 despite a turbulent year, with confidence remaining in the buy-to-let sector in particular.’[1]

‘Rental growth increased but at a slower rate than 2015; this was to be expected however, notably due to the unexpected Brexit result stalling market movement for a short period,’ he continued.[1]

Mr Ramsden went on to say: ‘House prices should start to increase above the 3% mark again in 2017, especially in buy-to-let hotspots which we have identified.’[1]

The top-ten best buy-to-let postcodes were found to be:

Postcode Area	Area	Average value of property	Number of sales in the last 12 months	Current average asking price	Current average rental price (pcm)	Buy to let yield (%)
M	Manchester	£177,686	11625	£202,484	£1,339	7.94
CF	Cardiff	£187,337	12356	£173,850	£1,054	7.28
LS	Leeds	£225,551	10339	£204,072	£1,217	7.16
L	Liverpool	£164,590	6859	£175,641	£1,027	7.02
WS	Walsall	£195,383	4995	£193,944	£1,106	6.84
NE	Newcastle upon Tyne	£184,224	12850	£173,666	£873	6.03
S	Sheffield	£194,673	6693	£180,126	£888	5.92
G	Glasgow	£182,716	16454	£165,046	£786	5.71
B	Birmingham	£189,898	10396	£203,990	£921	5.42
SR	Sunderland	£134,891	2282	£133,028	£587	5.3

Where are 2017’s buy-to-let hotspots?

Weak

On the other hand, London’s letting market slowed last year, with rents peaking during April.

Ramsden observed: ‘We forecast this trend to continue, especially within prime central London hence have identified West Central London or the WC postcode, as the top UK location to avoid in 2017.’[1]

The worst locations in terms of rental yields were found to be:

Postcode Area	Area	Average value of property	Number of sales in the last 12 months	Current average asking price	Current average rental price (pcm)	Buy to let yield (%)
WC	Western Central London	£936,660	Not available	£1,486,208	£2,877	2.32
BR	Bromley	£547,661	4121	£633,812	£1,287	2.44
LD	Llandrindod Wells	£215,894	556	£247,659	£514	2.49
WD	Watford	£563,462	3147	£678,837	£1,452	2.57
SG	Stevenage	£414,561	5972	£476,816	£1,053	2.65
HR	Hereford	£267,871	2217	£306,503	£692	2.71
AL	St Albans	£595,386	3271	£667,922	£1,521	2.73
CB	Cambridge	£416,239	5322	£446,454	£1,020	2.74
EX	Exeter	£290,770	9139	£315,125	£736	2.8
WR	Worcester	£281,073	4254	£288,729	£674	2.8

[1] https://www.landlordtoday.co.uk/breaking-news/2017/1/the-best-and-worst-postcodes-for-buy-to-let-returns-unveiled

Number of buy-to-let products at lowest for 8 years

Published On: January 9, 2017 at 3:04 pm

Author: Em Morley

Categories: Finance News

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

Data released by Moneyfacts has revealed that there has been a substantial fall in buy-to-let product numbers. According to the report, there have been 74 deals taken from the market in the last month.

The report indicates that the total number of live buy-to-let products stood at 1,482 in December, but has slipped to 1,408 this month. Particularly affected was the 75% LTV sector, which saw the total number of products fall from 606 to 540 during the same period.

This said, the number of products is still higher than the 1,256 seen in January.

Number of buy-to-let products at lowest for 8 years

Hit

Charlotte Nelson, Finance Expert at Moneyfacts, observed: ‘The BTL mortgage market took a hit last month, seeing the largest reduction in product numbers since March 2009. Usually, the month of December is quiet, with providers gearing up for the holidays. This time, however, the BTL market has seen a surge of activity, with the number of BTL products falling back to July 2016’s levels. Withdrawals have not been limited to just a few providers, either, with the reductions having been spread across the board.’[1]

‘Alongside tougher affordability, major changes to the way in which income from property rentals is taxed will be coming in April. Lenders are perhaps withdrawing products to get back to just their ‘core’ range in an attempt to wait and see what other providers will be doing in the run up to April. 2017 is set to be an uncertain year, which could be a lethal cocktail for landlords, particularly now there are less products on the market. Anyone unsure about their options should seek out a financial adviser,’ she added.[1]

[1] http://www.propertyreporter.co.uk/landlords/btl-market-sees-the-largest-fall-in-products-in-8-years.html

Investors remain active ahead of festive period

Published On: December 20, 2016 at 3:40 pm

Author: Em Morley

Categories: Landlord News

Tags: auction,investment,investors,sales,UK housing market

It is currently a time of cooling off for the UK housing market as Christmas approaches. However, there are still some signs that investors are remaining highly active.

A clear sign of this was the outcome of Cheffins’ auction in Cambridge last week, where £1.65m worth of sales was achieved across 13 lots. This represented a sales rate of 77%.

Activity

Ian Kitson, associate at Cheffins, said: ‘December sales often feature slightly smaller catalogues than the rest of the year, but there was good interest in a range of the lots throughout the marketing period, suggesting that buyers remain motivated regardless of the looming festive period.’[1]

‘We saw a good turnout on the day and achieved strong prices across the board. The sale of 77% appears strong compared to some of the results being reported nationally and we can attribute this to the quality of lots on offer, as well as the popularity of our region,’ he continued.[1]

Investors remain active ahead of festive period

Renovation

It appears that investment properties offering good opportunities of redevelopment attracted the most interest, with bidding and results well over guide prices across multiple lots.

The lot fetching the highest value offer on the day was a development site of 0.2 acres in Westfield Road, near Cambridge. This site had planning permission for the demolition of an existing bungalow, with the creation of two detached houses. This lot eventually sold for £419,000.

Mr Kitson also noted: ‘Renovation projects and investment opportunities were definitely the most sought-after lots of the day at this month’s auction. Previously the mainstay of property developers, we are actually seeing a shift in the types of person who look to purchase renovation projects, with a larger number of owner-occupiers entering the bidding.’[1]

[1] https://www.propertyinvestortoday.co.uk/breaking-news/2016/12/investors-remain-motivated-regardless-of-the-looming-festive-period

UK Auction market activity slows during November

Published On: December 16, 2016 at 2:29 pm

Author: Em Morley

Categories: Property News

Tags: auction,Buy-to-Let,buy-to-let landlords,investors

The UK auction market has experienced another quiet month, according to new figures released for November.

Usually, the auction process, with no property chain and buyers and sellers entering an immediate contract, is attractive to investors.

However, the most recent data released from the Essential Information Group (EIG) indicates that auctioneers saw a fall in lots sold during the last month.

Fall in auction sales

Results show that the number of property auction lots offered fell by 7.6% during November, from 2,341 to 2,163 lots. In addition, lots sold slipped by over 10% to 1,591 lots from 1,774 in November 2015.

Despite this fall in sales, further data from EIG shows that auctioneers recorded increased revenues of 2% from £272m to £277m.

Taking the residential auction sector as a whole, there was a fall of 1.1% in lots offered during the last month, from 1,990 to 1,969. In terms of lots sold, this number fell from 4.7% to 1,508 to 1,437. Residential revenues were up from 7% to £239m to £255m.

UK Auction market activity slows during November

David Sandeman of EIG, said: ‘These results are indicative of the market’s form over the last six to nine months and are perhaps unsurprising given that the economic and political backdrop has changed markedly during this period.’[1]

‘It would be a brave man to predict what the future holds in 2017, but one can be sure that auctions will continue to provide a quick, transparent and effective means of buying and selling property,’ he added.[1]

[1] https://www.propertyinvestortoday.co.uk/breaking-news/2016/12/uks-property-auctions-market-softens

Policy changes to increase costs for buy-to-let landlords

Published On: December 13, 2016 at 12:40 pm

Author: Em Morley

Categories: Finance News

Tags: buy-to-let landlords,investors,tax,tax changes

Undoubtedly, the current market is a tough one in which to be a buy-to-let let landlord. The number of measures aimed at curbing the market have led to many concerns that investors with lower profit margins could well end up making a loss.

Some could well be pushed out of the market completely.

Challenging changes

The introduction of the 3% stamp duty surcharge, alterations to mortgage interest tax relief and Right to Rent checks are just some of the measures that have impacted on landlords over the last year.

Now, the Bank of England’s Financial Policy Committee has been granted increased powers over the buy-to-let market.

John Heron, director of mortgages at Paragon, believes, ‘it is clear that this will need to be reflected in lender affordability assessments.’[1]

‘Government policy towards the private rented sector will increase costs for landlords. The Prudential Regulation Authority’s supervisory statement released in September this year is helpful in ensuring that lenders approach this in a consistent fashion,’ he continued.[1]

Policy changes to increase costs for buy-to-let landlords

Affordability concerns

Paragon is the latest lender to make changes to its affordability assessment for buy-to-let mortgages, to take into account the increase in costs that some landlords will face as a result of the alterations in mortgage interest rate relief.

The lender is bringing in graduated interest coverage ratio, in order to tailor to each individual landlord’s tax status.

Landlords paying a basic rate of income tax will carry on being assessed at a ratio of 125%. However, landlords paying a greater rate of tax will be assessed with an interest coverage ratio of 140%.

Concluding, Heron said: ‘The changes that we’re announcing are designed to tailor affordability to each landlord’s individual circumstances, whilst keeping the application process straightforward for brokers and their customers.’[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2016/12/government-policy-towards-the-prs-will-increase-costs-for-landlords

Number of landlords still unaware of Stamp Duty surcharge

Published On: December 2, 2016 at 2:47 pm

Author: Em Morley

Categories: Landlord News

Tags: buy-to-let landlords,investors,Stamp Duty

A Liverpool-based law firm has suggested that a number of buy-to-let landlords are somehow still unaware that they are liable to pay the additional 3% stamp duty surcharge, introduced in April.

Jasper Dawson, of Kirwans said he is seeing an increased number of cases where investors are only finding out about the charge at the last minute. He said he is concerned that many will see less returns than expected, as a result of the charge.

Stamp duty surcharges

Those most affected are those changing their property’s use from residential to commercial, buy-to-let landlords and smaller scale developers.

The Treasury is expected to raise an extra £3.1bn in tax as a result of the Stamp Duty reforms.

Surprisingly, according to Dawson many investors are not aware they are subjected to the additional costs. As such, they are forced to seek urgent legal advice to assess if there is any way of them legally avoiding paying the tax.

Number of landlords still unaware of Stamp Duty surcharge

Unaware

Mr Dawson said: ‘Since the 3% stamp duty was introduced in April, we have dealt with a number of clients who have discovered that the residential property they were planning to buy, perhaps to turn into offices or to regenerate and re-sell, is subject to this tax.’[1]

‘Often, these purchasers have been unaware right up until the last minute that this tax affects them, as many assume it only affects those buying second homes for personal use. The range of properties that this charge covers is vast; even off-plan purchases can fall into this bracket,’ he added.[1]

[1] https://www.propertyinvestortoday.co.uk/breaking-news/2016/11/novice-property-investors-failing-to-spot-3-stamp-duty-surcharge