Written By Em

Em Morley

Buy-to-let lending levels after remortgaging surge

Published On: January 11, 2017 at 10:38 am

Tags: Buy-to-Let,landlords,Mortgage lending,remortgaging

The latest Mortgages for Business report shows that despite remortgaging activity still being most prominent in the buy-to-let market, purchase lending returned to higher levels in the final quarter of 2016.

Buy-to-let

Standard buy-to-let (vanilla) transactions increased from 28% in Q3 to 38% in Q4. In addition, lending for HMO properties rose to 26%. Despite this being below the level seen in Q2 2016, this sees the market return to levels seen before the changes to landlords’ tax relief in 2015.

David Whittaker, CEO of Mortgages for Business said: ‘It is encouraging to see that the share of lending for purchase in the buy to let mortgage market returned to normal in Q4 2016. Following a notable shift towards lending for remortgage in the third quarter, landlords showed they were once again willing to commit to new purchases. The outcome of the EU Referendum, and the subsequent macro-economic uncertainty dampened purchase lending in Q3, with many landlords initially opting for a cautious approach.’[1]

‘While changes to Stamp Duty on second properties and landlords’ tax relief mean that landlords need to approach their investments intelligently, there are still excellent returns to be had in the market – especially compared to other asset classes,’ he continued.[1]

Buy-to-let lending levels after remortgaging surge

Loan to Values

In addition, data from the report shows that the average loan to value (LTV) ratios for all products stayed fairly constant at 67% in Q4 of 2016.

Interestingly, there was a substantial upturn in both the values and loan size for the multi-block unit mortgage market. This was due to the rise in the number of mortgages being taken out on high-value multi-unit properties. 30% of these transactions in the period were for properties valued over £1m.

Concluding, Whittaker said: ‘There is clearly an appetite among investors for more valuable multi-unit blocks, with the lending share of million-pound plus blocks from growing under a fifth in Q3 to almost a third in Q4.’[1]

[1] http://www.propertyreporter.co.uk/landlords/btl-market-settles-after-remortgage-rush.html

How does Gumtree assist both landlords and renters?

Published On: January 11, 2017 at 9:54 am

Author: Em Morley

Categories: Landlord News

Tags: Buy-to-Let,finding properties on Gumtree,Gumtree,rental property,tenants

In this guest post, John Daniell, Commercial Strategy Lead at Gumtree Property, explains how the platform works to help both landlords and tenants alike:

In Celebration of Choice

Finding tenants has come a long way from placing ads in agent windows or putting your listing in the local paper. Time and simplicity have become precious commodities for landlords and would-be tenants. The advent of the internet has brought with it an ‘always on culture’, with people now expecting to do what they want, exactly when they want. With this also comes the desire for much greater choice – from types of coffee to mobile phones – consumers not only expect it, but demand it. Finding a home is no different, with would be tenants expecting to be able to search a huge range of property whenever they want.

Changing Tastes

Gumtree was launched on this premise, offering choice and giving people a free and easy way to buy and sell. As a business, we are committed to giving renters and landlords a platform that opens up the best opportunities the market has to offer. What people want from a home has changed over time, for example our own research earlier this year revealed that 86% of renters now would not pay for a living room in a rented property, and 37% would rather have an en-suite than a communal space. Using data allows us to identify what is important to renters, in turn giving landlords a unique insight into the best way to market their property, helping them work with prospective tenants and get the best deal for both parties.

An Industry Issue

With choice and opportunity, the internet has also brought higher instances of fraud and cybercrime, making trust and safety an issue for all e-commerce and digital companies. Property websites of all shapes and sizes have a responsibility to ensure their users stay safe. Our property section is used by millions of people every year to list both properties for rent and for sale, and if a user has a bad experience we encourage them to report the incident to us or the police.

How does Gumtree assist both landlords and renters?

Still Sharing

There is much discussion currently about the ‘sharing economy’, which refers to ‘a socio-economic ecosystem built around the sharing of human, physical and intellectual resources’. This is the model on which Gumtree established itself sixteen years ago. As a platform it has retained its founding principles such as no fees, little paperwork and minimal hassle which have ensured its continuing popularity. With tenants and landlords continuing to demand real choice and flexibility, finding and renting property on their own terms, Gumtree has proved its staying power, and strives to be there for our trusted users in the future.

How to get the best out of Gumtree as a Landlord:

Upload images of the main rooms inside the property, including the kitchen, reception room, bathroom and bedroom, as well as the property’s exterior to give renters a flavour of what they’re buying in to. Give as much written detail as you can on the property, to avoid wasting time with renters and yourself.

Check out the local competition and how other landlords are marketing their property. Search for similar properties and what the going rates are as a guideline.

Market your property in the correct region, as Gumtree is spilt up by location (major cities and counties). Make sure you create an advert for the correct region by selecting the area in which the property is located and providing the postcode.

Refresh your advert as frequently as possible in order to get the most exposure, as Gumtree’s search results are displayed in order of freshness.

Just 31 Illegal Migrants Removed from the UK Through Right to Rent Rules

Published On: January 11, 2017 at 9:33 am

Author: Em Morley

Categories: Landlord News

Tags: illegal migrants,landlord law,Right to Rent,right to rent scheme,rogue landlords

Just 31 illegal migrants have been removed from the UK through Right to Rent rules, according to statements made by Government ministers.

Following controversy over how effective the Right to Rent scheme will be at removing illegal migrants from the country, Labour’s Baroness Lister of Burtersett questioned the Government on how many landlords and tenants have been investigated under Right to Rent rules in the past year.

The Right to Rent scheme was introduced on 1^st February 2016 in a bid to prevent illegal migrants’ access to the private rental sector.

Many landlords have struggled to understand their responsibilities concerning the rules, with recent research suggesting that the scheme is causing a great deal of worry to investors.

Just 31 Illegal Migrants Removed from the UK Through Right to Rent Rules

In fact, the Government has confirmed that it has received almost 8,000 calls to its landlord helpline in the past year. If you are having difficulty with your obligations, you can access support on 0300 069 9799.

While landlords can now be imprisoned for failing to comply with Right to Rent rules, it appears that the scheme may not be proving as effective as the Government may have hoped.

Responding to Baroness Lister’s request on how many illegal migrants have been identified and removed from the UK through the scheme, the Minister of State for the Home Department, Baroness Williams of Trafford, explained that the Home Office does not hold information about the overall number of illegal migrants found living in private rental accommodation.

However, she did present some figures on how many illegal migrants have been identified through enforcement action.

She explained: “Our records show that between the start of the scheme and 30^th September 2016, 654 individuals were either named on a Civil Penalty Referral Notice served on a landlord, or encountered on an enforcement visit during which such a Notice was served, or encountered as a result of information provided through the Landlords Checking Service, or encountered as a result of other intelligence provided about property let to illegal migrants.

“Of these individuals, 31 were removed from the UK over the same period. Other cases may be being progressed to removal, or have been made subject to reporting restrictions, or have sought to regularise their stay, or have left the UK voluntarily.”

Baroness Williams then went on to defend the scheme: “The Right to Rent scheme is designed to restrict access to the private rented sector for illegal migrants in order to encourage voluntary departure from the UK and discourage illegal migration. The Home Office will always investigate information it receives about illegal migrants and take appropriate enforcement action according to the information available and the circumstances of the case. It is not always possible to attribute a return or other enforcement activity to the application of a sanction earlier in the case or to the route through which a particular individual was brought to the attention of the Home Office.”

So has the scheme proved successful in rooting out landlords that knowingly let to illegal migrants?

Between 1^st November 2015 and 31^st October 2016, when failure to comply with Right to Rent rules was still a civil offence, 75 initial civil penalties were issued to individual landlords.

It appears that the Government’s attempts to deny illegal migrants access to housing in the UK may in fact be more effective at uncovering rogue landlords that provide rental housing to those unlawfully living in the country.

Do you believe that the scheme is a necessary measure, considering how few illegal migrants have been discovered?

Southern Rail Drama Causes House Price Growth to Slow Across the Network

Published On: January 10, 2017 at 11:28 am

Author: Em Morley

Categories: Property News

Tags: commuting,homeowners,house prices,Southern Rail

House price growth has slowed across the Southern Rail network when compared to England as a whole, as the firm faces yet more controversy.

A year ago this month, Southern Rail was voted one of the top three worst rail providers by commuters. Since then, it has undoubtedly become the country’s most hated train service, with commuters subject to nine months of chaos.

Southern Rail Drama Causes House Price Growth to Slow Across the Network

Some employers have even refused applicants using the Southern Rail service, as they fear that workers will too often arrive late. But not only are commuters’ professionals lives being affected, house prices along the network are also suffering.

Using data from Zoopla, online estate agent eMoov has analysed the average price paid and value change of properties around each station on all nine of the Southern Rail network lines. The study assessed the price growth recorded over the last 12 months, as well as the last six, comparing each line to price growth across England during the same periods.

The agent found that house prices across England rose by an average of 7.6% in the past year. For those living across the Southern Rail network, price growth reached just 6.5% in the same timeframe.

More notable, however, is the difference in growth over the past six months.

Across England, house prices rose by an average of 3%. For those unfortunate enough to live within the Southern Rail network, prices increased by just 1.4%.

To make matters worse, living within the network isn’t cheap. With an average value of £447,539, homeowners are paying over the odds for their properties, only for its potential for capital growth to be blighted by the train operator’s service.

The worst affected line is Mainline West, where prices have risen by just 5.4% in the past year and 0.2% in the last six months.

There is hope, however, for those on the Redhill line, as prices have increased by more than the average seen in England both in the last year (7.9%) and past six months (3.1%).

The Founder and CEO of eMoov, Russell Quirk, responds to the findings: “This research really highlights the impact external factors can have on a property’s value in the market. Often, the close proximity of good commuter links into London, in particular, can help increase the asking price of a property.

“In this instance, strike action, poor service, cancelled trains and long delays have had the reverse effect to property prices on the Southern Rail network. It is worrying to think that something outside of your control can not only be detrimental to your work life, but can also spill over into your personal life as well.”

He adds: “Southern Rail staff must forgive UK homeowners for remaining unsympathetic to their cause, when their selfish actions are inadvertently depreciating the most expensive asset they are ever likely to own.”

Has the drama affected any plans you had to buy or sell across the network?

Could home staging be a simple way of improving yields?

Published On: January 10, 2017 at 10:34 am

Author: Em Morley

Categories: Landlord News

Tags: Buy-to-Let,buy-to-let landlords,home staging,rental yield,tenants

Could home staging be this year’s simple way to make a property more desirable and deliver a higher rental yield?

Home staging goes past interior design to become a marketing tool to ensure that their rental property appeals to a bigger audience as possible.

There are a lot of measures that can be taken in order to improve the internal makeup of a property: Think furniture, lighting and bedding for example. Making your rental property appear more homely and effectively utilising space will attract more would-be tenants.

Furnishings

However, the furnishing of rental properties has been an afterthought for buy-to-let investors for a number of years. That is the view of Robert Walker, founder and managing director of Alexander James Interiors.

Mr Walker notes: ‘Often let unfurnished or at best, let with the bare minimum of items collected on a quick dash to Ikea, soulless properties have been presented to prospective tenants with the expectation of securing a tenancy.’[1]

Could home staging be a simple way of improving yields?

‘With more people than ever living within the private rented sector, the expectations of tenants have never been higher-and that includes not only a safe and functioning home but an appealing interior also,’ he continued.[1]

Walker said that 2017 has been predicted to be an ‘annus horribilis’ for buy-to-let investors, given changes to mortgage interest tax relief and tougher mortgage lending criteria. He feels that savvy landlords should be taking whatever simple steps they can in order to maximise their yields.

Lucrative

‘From a landlords perspective, dressing a rental property can also prove lucrative,’ Walker added. ‘Alexander James Interiors has seen a significant rise in demand from landlords, both individual or accidental landlords and professional, multi-unit landlords, for the furnishing of rental properties over the last 18 months as property owners seek to increase their yields.’[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2017/1/dress-to-impress-to-achieve-a-higher-rental-yield

Just Four London Boroughs Offer Average House Prices Below £400,000

Published On: January 10, 2017 at 10:18 am

Author: Em Morley

Categories: Property News

Tags: affordable homes,house prices,London,London property market

Just four London boroughs offer an average house price below £400,000, according to recent statistics from Rightmove. The property portal found that east London’s Barking and Dagenham, Bexley, Newham and Havering are the only parts of the capital where the average home sells for less than £400,000.

Just Four London Boroughs Offer Average House Prices Below £400,000

However, rising demand in these London boroughs is leading to rapid house price growth. If you’re a landlord looking to purchase a buy-to-let property this year, get in there quick before prices become out of reach.

Havering has enjoyed the greatest annual increase over the past year, with the average house price soaring by over £40,000 to an average of £392,000 – more than £200,000 cheaper than the London average of £616,000. Landlords will be pleased to learn that a new Crossrail station is promised in the main town of Romford by the end of 2018, which is likely to push prices up once more, ensuring strong capital growth.

Rightmove’s House Price Index for December shows that priced out buyers are widening their search in a bid to find a bargain, with increased demand pushing prices up on outer edges of the capital. Tenants will also be seeking lower rent prices in outer London boroughs, which is yet more of an incentive for landlords to snap up properties in these locations.

Meanwhile, sharp drops in house prices continue to affect the prime London market. Camden in the north suffered the greatest annual decline, of almost 18%, with the average house price now standing at £994,000. Prices also fell by more than 5.5% in west London’s Hammersmith & Fulham, Wandsworth and Kingston. Properties in these boroughs now sell for an average of £1.03m, £757,000 and £598,000 respectively.

Landlords with properties in the upmarket Kensington and Chelsea will be disappointed to learn that house prices dropped by nearly 15% over the year, taking the average value to £2.13m.

Increasing demand for boroughs beyond Zone 2 is a result of the growing affordability gap caused by years of house prices rising faster than wages, claims Rightmove.

The portal’s co-founder, Miles Shipside, comments: “London’s desperate need for affordable housing has moved to outer London, and we forecast that will lead to further modest price growth in 2017.”

If you’re seeking to avoid the stagnation seen in London’s property market over the past year, caused by Brexit uncertainty and Stamp Duty changes, look to these four boroughs for lower prices, high tenant demand and potential for strong capital growth.