Written By Em

Em Morley

Build to Rent could provide 240,000 new homes by 2030

Published On: February 9, 2017 at 3:07 pm

Tags: build to rent,landlords,private rental sector,tenants,White Paper

A new report from the British Property Federation and real estate firm Savills suggests that Build to Rent is now prominent in the UK housing sector.

The investigation indicates that this scheme could deliver 240,000 homes by 2030.

White Paper

Acknowledging that Build to Rent’s ability to increase the amount of homes will be prominent in the Government’s White Paper, which was released this week.

The report looks at the progress of the sector, alongside looking at its potential. Overall, it concludes that on large urban sites, Build to Rent can motor house building three fold.

Data was produced in conjunction with the London School of Economics and explains that if this can be achieved in just 20% of sites currently being built, supply will increase by 6%.

Comparing this to the 164,000 new homes completed in England during 2015.16, this equates to 10,000 homes per year.

Planning

Of paramount importance to the future of the sector, the report suggests, is better recognition of planning. It calls for a preferred planning approach, with a better definition of what Build to Rent is and acceptance that discounted market rent could work better than other types of affordable housing.

Build to Rent could provide 240,000 new homes by 2030

Ian Fletcher, director of policy at the British Property Federation, noted: ‘Build to Rent is a relatively new phenomenon in the UK, but already has a significant development pipeline, which will see it deliver thousands of homes over this Parliament. By measuring Build to Rent’s growth and the other benefits it delivers and what gets in its way, we want to show to Government the sector can be an important partner to its ambitions to build more homes, on this most important of days for housing policy.’[1]

Jacqui Daly, director of Savills residential investment research and strategy, also said: ‘There is no doubt that we need to boost house building significantly to address years of undersupply and begin to impact housing affordability. Build to Rent holds the key to getting institutions back into the housing market and increasing the supply of good quality, well-managed homes.’[1]

‘We hope that this report will give local authorities a deeper understanding of the benefits of Build to Rent and the tools they need to have a meaningful dialogue with developers and housebuilders and thereby secure long term institutional funding.’[1]

[1] http://www.propertywire.com/news/uk/build-rent-deliver-240000-new-homes-uk-2030/

Strong end to 2016 for the rental market

Published On: February 9, 2017 at 2:09 pm

Author: Em Morley

Categories: Landlord News

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

After a turbulent year, average UK rents ended 2016 greater than they started it, according to the latest Your Move England & Wales Buy to Let Index.

The Index reveals that the average property was let for £811per month during December. In January 2016, the average rent stood at £790.

Eastern Rises

Rents rose across most regions during last year, with the East of England seeing the most prominent.

However, demand for properties in London has fallen, with more would-be renters looking outside of the capital for options. The East saw rental rises of 6.1% over the year, closely followed by the South East, where average rent has grown by 4.4% since December 2015 to hit £877 per month.

Only two regions saw average rents fall on a yearly basis during 2016. In the South West, homes let for an average of £660 per month-1.4% lower than twelve months previously.

The North East saw a less prominent fall, with prices down by 0.2% year-on-year. This region remains the cheapest place to rent a property in the whole of England and Wales, with average totals of £543 per calendar month.

At the other end of the scale, London remained the most expensive place in which to rent. The typical property in the capital commanded a rent of £1,291 in December.

Strong end to 2016 for the rental market

Strong Finish

Valerie Bannister, letting director at Your Move, noted: ‘The rental market in England and Wales has ended the year strongly, with all key indicators looking positive. Rents ended the year higher than they started in most areas, yet tenant arrears have remained broadly at the same level.’[1]

It comes as little surprise to learn that London offered the lowest rental yields. Homes in the capital returned 3.3% on investment during December.

In contrast, landlords in the North East saw the strongest yields, with the average property returning 5.3% in the same month.

Concluding, Bannister added: ‘Rents ended the year higher than they started in most areas, yet tenant arrears have remained broadly at the same level.’[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2017/2/rental-market-in-england-and-wales-ended-2016-strongly-latest-index-shows

Buy-to-let rates slide to record lows

Published On: February 9, 2017 at 11:52 am

Author: Em Morley

Categories: Finance News

Tags: Buy-to-Let,buy-to-let mortgage products,buy-to-let rates,landlords,Mortgages for Business

The most recent data released by Mortgages for Business has revealed that average buy-to-let rates for two and three year products have dropped to their lowest levels on record.

Rates for these products stand at 2.92% and 3.76% respectively.

Low Fees

However the report also shows that five-year fixed rates rose for the second month in succession, standing at an average of 3.77%, This is more than the average price of a three-year fixed rate for the first time since January 2015.

In addition, the Index found that January was a good month for short-term tracker products. Two-year buy-to-let tracker rates stayed at an average of just 2.81%-unchanged from December.

Buy-to-let rates slide to record lows

David Whittaker, CEO of Mortgages for Business, observed: ‘Longer term swaps in particular have risen in recent months, so it’s no surprise that pricing for five-year fixed rates have started to creep up. However, when looking at the bigger picture, these rates are still, on average, less than 1% more than their shorter term counterparts. As such, we continue to recommend them to customers as they not only provide a longer period of security against rate rises in an uncertain market, they can also save landlords the time and money it costs in remortgaging more often.’ [1]

‘At the very least, landlords should consider having some properties mortgaged on longer term fixes to spread risk. The fact that these rates are beginning to rise now should prompt landlords to take action sooner rather than later,’ Mr Whittaker added.[1]

[1] http://www.propertyreporter.co.uk/landlords/btl-rates-fall-to-record-lows.html

Foreign Investors Snapping Up Rental Properties in the North West

Published On: February 9, 2017 at 11:04 am

Author: Em Morley

Categories: Property News

Tags: foreign investors,North West,property investment,property investors,rental properties,rental yields

Foreign investors are snapping up rental properties in the North West of England, according to new research from The Mistoria Group, a specialist in high-yielding property investment.

Foreign Investors Snapping Up Rental Properties in the North West

The firm believes that foreign investors are taking advantage of the weak pound, high yields and excellent occupancy rates in the region’s university towns and cities.

The study found that there has been a surge in foreign investors purchasing student properties in Liverpool and Salford, up by 42% year-on-year. The vast majority of investors are from China and Hong Kong, followed by the UAE, Russia and Singapore.

Chinese buyers are especially keen on apartments and Houses in Multiple Occupation (HMOs), says The Mistoria Group, many of which have high rental yields. The Government’s ambition to create a Northern Powerhouse is also helping to drive foreign investors to the North West, the firm believes.

Mish Liyanage, the Managing Director of The Mistoria Group, comments: “The Brexit vote reduction in the value of sterling against the dollar and the yuan has boosted Chinese investment in the likes of Salford and Liverpool.

“The Chinese are not alone in their enthusiasm for newly-affordable UK bricks and mortar. The Brexit effect means that British property is 20% cheaper for many foreign investors, and there are no signs that this is likely to be reversed in the near future.”

He continues: “Many foreign investors buy student accommodation in the North West for their children who are studying at university. Indeed, foreign investors need to look no further than Salford and Liverpool for great investment opportunities, with yields far exceeding those found in London and the South East. Investors enjoy lower property prices and minimal void periods in many towns and cities in the North West. Both in Salford and Liverpool, we have already achieved over 80% occupancy for 2017/18 academic year with more than six months still left in this year to fill up the rest of the rooms.

“Last year, we were only at 55% at this time of the year. This clearly shows the keen interest students show in going for high quality refurbished properties, managed by a reputed student management company.”

He concludes: “Both Salford and Liverpool are undergoing a significant redevelopment, and this is providing jobs and boosting tenant demand. Investors can acquire a high quality three-bed HMO which will house four students from £120,000 onwards. The return on investment is very attractive too, with 13% (8% cash rental and 5% capital growth).”

What Does the Housing White Paper Mean for the Student Rental Market?

Published On: February 9, 2017 at 9:14 am

Author: Em Morley

Categories: Property News

Tags: Housing White Paper,student accommodation,student landlords,student property

Since the Government released the Housing White Paper on Tuesday, many industry experts have rushed to respond to its content. But what does the controversial document mean for the student rental market?

What Does the Housing White Paper Mean for the Student Rental Market?

On Tuesday, the Government unveiled new plans that it hopes will stimulate the housing market, encouraging more property development and making renting a more affordable option.

In the White Paper, titled Fixing Our Broken Housing Market, the Government set out its plans to boost the supply of new homes in the UK and make renting cheaper for the country’s tenants.

One measure, to introduce three-year tenancies, has been met with open arms from some in the industry, while other industry bodies believe that the Government has not shown enough support for individual landlords, who make up the bulk of the private rental sector.

Indeed, the document has been met with mixed feelings from experts in the property industry, with some believing that renters will actually be worse off following the announcement.

StudentTenant.com, which deals with the student rental market, acknowledges that the Government has taken a radical approach towards fixing the housing market.

Some of the key promises from the Housing White Paper are to support and speed up the process of developing properties, providing access to households who are currently priced out of the housing market with the Affordable Homes Programme, and making renting a more viable long-term option for private tenants.

Danielle Cullen, the Managing Director of StudentTenant.com, agrees: “We do need to protect those who are renting more, as there has long been a crisis of a lack of supply of affordable rental stock. Governments have always focused on ownership, with schemes like Help to Buy, but have seemingly always left the rental market out in the cold.

“It’s encouraging to see the Government is finally putting in place structured policies to benefit the rental market, offering people a chance to save money whilst renting. Over recent years, it’s become a trend for those who rent properties to spend around half their income on renting a property alone – and that’s without bills. Demand has significantly outgrown supply in many places in the UK, which benefitted everyone except renters, so hopefully we will finally see changes to make it a fairer market for everyone.”

But will the changes make the student rental market fairer?

Cullen explains: “This does, however, leave an area of uncertainty in how this could impact the student rental market and investment into student letting properties. We could see an increase in buy-to-let properties in the UK, but landlords could be more inclined to privately rent to families and professional couples rather than students. We’re not sure what this means for the future of student rental properties. The Government could be fixing the rental market in general, but at the expense of student housing, where we know there is already a distinct shortage in a number of areas.”

Do you invest in the student rental market? Make sure to keep up to date with any future announcements concerning the sector at LandlordNews.co.uk.

Confusion over timescale of letting agent fees ban

Published On: February 8, 2017 at 2:28 pm

Author: Em Morley

Categories: Landlord News,Tenant Fees Ban

Tags: ban on agent fees,Buy-to-Let,letting agent fees,White Paper

Yesterday saw the publication of the long-awaited Housing White Paper, which included pledges on fixing the ‘broken’ housing market.

These included introducing longer tenancies and building more affordable housing for first-time buyers.

However, the Paper still remained vague on the subject of the banning of letting agents’ fees in England.

Banning of Fees

The measure to ban letting agent fees was introduced during last year’s Autumn Statement, but as yet there is little in the way of a specific timeframe for the changes to be implemented.

In the White Paper, the Government says the following on the ban:

‘Where there are concerns, these tend to focus on affordability and security. In the long term, building more homes will help with affordability, but renters often face upfront costs including fees charged by letting agents to tenants.’

‘Tenants have no control over these fees because the agent is appointed by and works for the landlord. This is wrong.’

‘The government has already introduced transparency on fees. We will consult early this year, ahead of bringing forward legislation as soon as Parliamentary time allows, to ban letting agent fees to tenants. This will improve competition in the market and give renters greater clarity and control over what they pay.’[1]

Confusion over timescale of letting agent fees ban

Implementation

The Royal Institution of Chartered Surveyors has suggested that the timeframe for the ban on fees will follow one of two routes.

First, full consultation and primary legislation, which could take until 2018 to complete.

Alternatively, there could be, ‘curtailed consultation and secondary legislation under existing statute,’ which could be completed this year.

Uncertainty surrounding the timetable, coupled with the on-going Brexit debacle, suggests that a ban on agent fees is unlikely until next year.

[1] https://www.lettingagenttoday.co.uk/breaking-news/2017/2/letting-fees-ban-still-unlikely-to-be-introduced-until-2018