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Em Morley

Salford in top 5 student buy-to-let locations

Published On: December 12, 2016 at 2:55 pm

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New research has revealed that Salford is now in the top five university towns in England-ahead of Manchester, Leeds and London.

Data from the report from The Mistoria Group indicates that Salford is delivering an average rent of £750 per month, an annual yield of 6.8% and a typical house price of £131,863.

Top buy-to-let locations

Salford sits in 4th position in the latest results, behind Aston & Birmingham City, Teeside and Sunderland, which records annual yields of 10.6%.

According to The Mistoria Group, student landlords can enjoy returns of up to 7-10%, should they be savvy and purchase the correct property in the correct area.

Managing Director of The Mistoria Group, Mish Liyanage, noted: ‘Salford is a booming University City and is a great place to invest.  It offers good rail and road links, located near the M602 and the M60, together with a great bus and tram service. With a wide variety of bars, restaurants together with good sport facilities, three great retail parks and wide open spaces of parkland, Salford has something for everyone.’[1]

‘If landlords are savvy and carefully select where they invest, they can enjoy excellent gross annual leads. Rental income especially for HMOs can vary dramatically in Salford, depending on which postcode you look at. For example, Eades Street (M6 6PG), Seaford Road (M6 6DD), Blandford (M6 6BE), Welford Road (M6 6BB) are some of the most expensive areas in Salford, netting on average ££110 per room, per month as these streets/roads are very close to the university. However, generally, students pay up to £85-105 per room, per month including bills for high quality student accommodation,’ he continued.[1]

Salford in top 5 student buy-to-let locations

Salford in top 5 student buy-to-let locations

Considerations

Continuing, Liyanage said: ‘We know that the most important considerations for students when choosing rental accommodation is space, location and price. Our research shows that the majority of students in Salford want to live in high quality, shared accommodation, with good internet access and affordable bills.’[1]

‘Student accommodation can offer a number of attractive features to investors.  The yields are high, as students settle for less space than other tenants; occupancy is typically very good; and it is neatly counter-cyclical, as more people go to university during economic downturns.’[1]

[1] http://www.propertyreporter.co.uk/landlords/salford-makes-the-top-5-for-university-buy-to-let.html

 

UK rents catching up with those in London

Published On: December 12, 2016 at 11:22 am

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The most recent report from Countrywide has shown that the average London rent was 0.7% lower than last year in November. This was the largest fall seen since October of 2010, where rents stood at an average of £901 per month.

During the last year, London has moved from the region with the second largest rate of rental growth in the UK, to the slowest.

Closing Gap

Over the past five years, the gap between rents in London and the rest of the UK has grown substantially. By 2015, this gap had risen to a record £490 per month, an incredible rise from the £150 per month recorded in 2010.

However, rents in the capital are now growing at a slower rate than the rest of the UK, meaning that the gap between London and the rest has now closed. By November 2016, this gap had fallen, the first drop since 2010. Rents in London now stand 60% higher than in the rest of Great Britain.

This narrowing rent gap has been driven by a rise in the number of homes available to rent in the capital. During November 2016, there were 32% more homes to rent in London than at the same period in 2015. In addition, the number of would-be tenants increased by 9%. Average asking rents in London were down by 11%, more than double the proportion seen in 2015.

Across Britain, the cost of a new let increased by 2% in the last year-3.1% if London is excluded. Rental growth has been driven by the North, North East and North West of England, alongside Yorkshire and the Humber. 25% of tenants renewing their contract in the North of England saw their rent increase in November, up from 16% in the same month last year.

UK rents catching up with those in London

UK rents catching up with those in London

Boost

Johnny Morris, research director at Countrywide, noted: ‘Higher than usual numbers of homes available to rent has boosted tenants’ negotiating power.  Stock growth has outstripped that of tenants.  This is in part due to the hangover from the rush to beat the 3% stamp duty charge earlier in the year and a shift in stock from the sales market.  With more choice and facing stretched affordability, many tenants are using their new found negotiating power to agree lower rents than in 2015.’[1]

‘Since the gap between London rents and those in the rest of the country hit a high watermark in 2015, the gap has been gradually narrowing.  The pressure on affordability and number of homes coming onto the rental market in the capital means that rents are likely to lag behind the rest of the country in 2017,’ Morris added.[1]

[1] http://www.propertyreporter.co.uk/property/rest-of-uk-catching-up-with-london-rents.html

Rents set to increase by 15% by 2020?

Published On: December 12, 2016 at 10:17 am

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UK rents are expected to rise much faster than property prices over the next three years, according to the chief operating officer of one of Britain’s leading property franchises.

Dorian Gonsalves of Belvoir, suggests there will be a 15% increase in rents by 2020. This, he feels, is due to, ‘a raft of recent anti-landlord Government policies in the past year,’ though he notes the rent rises will vary depending on region.

Buy-to-let measures

New measures introduced, including the new 3% stamp duty rise and tougher mortgage lending criteria, could well see many landlords making a loss. Gonsalves also believes that the Government’s failure to improve the availability of social housing for rent has led to a shortage of quality rental accommodation in the private rental sector.

Mr Gonsalves believes: ‘’Throughout 2017 Belvoir will continue to work with decision makers and we hope that some of the Government’s recent changes will either be reversed or incentives will be launched to help drive up the supply of rental properties. This would then bring down rents and benefit millions of tenants, making for a healthier rental sector.’[1]

The most recent rental index from the firm reveals that 88% of offices had recorded an increase in demand for properties to rent during Q3 of 2016. However, a huge 86% of tenants-around 6m households-had less than the £8,838 needed to secure a 5% deposit on the average home. This means that they are hugely unlikely to be able to buy a property.

Rents set to increase by 15% by 2020?

Rents set to increase by 15% by 2020?

Struggling

Continuing, Gonsalves said: ‘People from all walks of life, including students, migrant workers and professionals with families, are struggling to meet strigent lender affordability ratios.’[1]

‘When someone is not in a position to buy, they obviously start looking for somewhere to rent, but unfortunately, Government policies seem to lack any direction and have done nothing to benefit either landlords or tenants, so tenants could find it more difficult to find good quality suitable accommodation in 2017 and beyond,’ he concluded.[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2016/12/rents-predicted-to-increase-15-by-2020

 

Buy-to-Let Investment Plummets Following Government’s Attack on Landlords

Published On: December 9, 2016 at 11:33 am

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Buy-to-let investment has plummeted following the Government’s “attack on landlords”, according to a new report from estate agent haart.

The agent found that the number of buy-to-let transactions across England and Wales has dropped by 63.7% over the last 12 months, following the introduction of an array of measures that are putting many prospective investors off the private rental sector.

Buy-to-Let Investment Plummets Following Government's Attack on Landlords

Buy-to-Let Investment Plummets Following Government’s Attack on Landlords

The report claims that the volume of buy-to-let investment, which has fallen by 8.2% in the past month alone, is unlikely to increase any time soon, unless the Government reverses recent tax increases and regulations in the sector.

The CEO of haart, Paul Smith, says: “The scale of decline in buy-to-let in just 12 months is deeply worrying – landlords have clearly pulled out of the market and are unlikely to return any time soon. However, this is entirely the result of Government policy, with Theresa May now picking up George Osborne’s baton and proceeding to bash landlords with renewed vigour.”

It has been a difficult year for buy-to-let landlords. Alongside stricter lending criteria, a 3% Stamp Duty surcharge for additional properties was introduced in April, while the 10% Wear and Tear Allowance has been scrapped, leaving landlords only able to claim for the amount that they have actually spent.

In addition, mortgage interest tax relief is due to be reduced to the basic rate of tax from April 2017.

“The Government’s attack on investors adds up to a war on landlords and a buy-to-let market crippled by tax hikes and unnecessary regulation,” Smith adds. “The effect has been to more than halve the number of buy-to-let sales in England and Wales, and the inevitable consequence will be fewer properties available to renters next year and higher rents.”

A leading housing expert has warned that families may even lose their homes as a result of the changes: https://www.justlandlords.co.uk/news/families-lose-homes-landlord-tax-changes/

Rather than punish buy-to-let landlords for a property market that is not working for first time buyers or generation rent, Smith believes the Government should channel more investment into housebuilding and increasing the supply of much-needed rental homes.

He continues: “Tenants are stuck in an intensely competitive market where rents are often more expensive than mortgages, because there are simply not enough properties available for lettings, and many landlords now have no choice but to pass the extra costs onto tenants.

“It is time for the Government to end this damaging war on landlords and instead create a market that genuinely works for everyone. The Government is casting landlords as the pantomime villains of the property market, but we need a more grown-up and serious approach to policy-making, as well as a recognition of the contribution that landlords make.”

Have your buy-to-let investment habits changed following the Government’s so-called attack on landlords?

What to do if Your Property has been Sublet Online

Published On: December 9, 2016 at 10:15 am

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Airbnb is Backing Sadiq Khan’s Call for Short-Term Lets Register

As the Christmas season approaches, online student lettings platform StudentTenant.com highlights the growing problem of tenants – particularly students – subletting their homes through websites like Airbnb. So what can you do if your property has been sublet online?

With the high expenses of the Christmas period and students returning home to their families, many tenants are taking the opportunity to sublet their accommodation online to make up the costs of this expensive time of year.

What to do if Your Property has been Sublet Online

What to do if Your Property has been Sublet Online

While this might seem the perfect solution, there are many problems with subletting a property that you don’t own. The majority of tenancy agreements do not permit subletting without the consent of the landlord. As a result, the landlord must be notified and it becomes their decision.

However, many students will still sublet online without speaking to their landlord. Over the past year, StudentTenant has detected an increase among landlords that have seen their property on Airbnb or a similar platform, or found that the tenant has sublet online without any prior knowledge or discussion.

Tenants are reminded that it can be extremely dangerous to let a stranger into your home, despite the simple verification process involved in setting up an Airbnb account. Your roommates, neighbours and belongings must all be considered.

In addition, there are liabilities with insurance as well, particularly if the landlord is unaware that a person who is not on the lease is staying in the property.

Airbnb gives tenants advice on how to speak to their landlord about becoming a host, and what issues need to be addressed before putting the property online. It recommends looking at the lease, speaking with neighbours, and learning the rules of the building. Although the site does offer a £600,000 Host Guarantee, it does not act as homeowner’s or tenant’s insurance, and has a list of limitations depending on what country the home is located in.

The Managing Director of StudentTenant, Danielle Cullen, comments: “Students can be strapped for cash, and it doesn’t help during this busy season, but subletting a rental property is not the solution. Not only can it be a liability for your roommates and your belongings, but it can lead to serious insurance problems for your landlord, especially if they don’t know about the person renting. It also goes against most leases, which is a breach of a legal document.

“Of course, we can sympathise with the students, but we must emphasise that it is neither a safe nor legal route to take when trying to make a few extra pounds.”

So what can landlords do if their property has been sublet online?

“In the case of a landlord discovering that a tenant is subletting their rented space, there is a three-step process that needs to be addressed,” she explains.

“The first is to speak directly with the tenant. It could be as simple as not understanding that the tenancy terms are being broken. If the advertisement remains active, the next step is to speak with the sub-tenants or the subletting platform in order to seek further action. Finally, if nothing changes, the landlord may only be left with legal action against the tenant, and should seek advice.”

Property Experts Reveal Their Housing Market Forecasts for 2017

Published On: December 9, 2016 at 9:40 am

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Number of UK buy-to-let businesses increases 2.1%

Reuters has released its housing market forecasts for 2017, highlighting opinions from leading property experts.

Online estate agent eMoov.co.uk joined Nationwide, Knight Frank, Allianz Global Investors and many more across the industry to contribute to the report. The poll covers subjects from national and London house price growth, the cost of UK property, the impact of Brexit and the consequences of the recent Autumn Statement.

The questions and results, including comment from the CEO of eMoov, Russell Quirk, can be found below:

Forecasts for full year change in UK house prices

The median prediction for UK house price growth for this year was 4.7%, with most experts believing this would slow to 2% in 2017.

“I think 4.7% is about right in terms of where the market will finish in 2016. I think the outlook for 2017 is far more optimistic than a 2% increase. The market is in good condition heading into the New Year, and prices could grow by as much as 4% next year.”

Forecasts for full year change in London house prices

Predictions for the London market in 2016 weren’t much brighter, with the median growth forecast at 5% for this year, dropping to a decline of 0.5% in 2017, but recovering by 2% the following year.

“The outlook for London, on the other hand, isn’t as rosy, and a melting pot of detrimental events during 2016 could see London prices fall by as much as 4% in 2017.”

Property Experts Reveal Their Housing Market Forecasts for 2017

Property Experts Reveal Their Housing Market Forecasts for 2017

What best describes the level of UK house prices?

Each property expert was then asked on a scale of one to ten how the current market is priced. The median score was five – priced right.

“For all its negatives, I think the majority of the UK market is currently priced fairly, but London is probably too inflated, despite the additional factors that make it one of the most desirable markets in the world.”

What best describes the level of London house prices?

With London house prices in a league of their own, it’s no surprise that the answer leant more towards ten (extremely expensive), with a median score of eight.

How are the risks to your house price forecast skewed?

Quirk was the only property expert included in the poll to believe the future of the housing market looks positive for homeowners, with others predicting a more pessimistic view.

“Low money costs and low housing supply necessitate that, in the medium to long-term, demand tension wins in pushing prices up in general – great for homeowners and the general market, not so great if you are a struggling would-be buyer.”

How has your opinion changed of the future of the UK housing market since the vote to leave the EU?

Of the experts asked, no one believed their opinion of the market had changed for the better. 40% said there was no change, with the majority believing the future of the market had got worse.

“No surprise that many believe the EU vote to have been detrimental, whether that be due to scaremongering across the industry or because it suits personal agendas. Structurally, nothing has changed, and so I believe there has been little change to the market and this will continue for the time being.”

How about the future of the London market? 

70% of those asked also believed the future of the London market was worse off as a result of leaving the EU.

“I do believe the London market is a lot softer now, but the Brexit vote has only had a minor contributing factor to this. The real killer blows of 2016 where London is concerned have been the changes to Stamp Duty for second homes, and the overheating of prices from prior years giving London buyers house price heat stroke.”

What kind of impact will the measures announced in the Autumn Statement have on the UK housing market? 

Finally, the experts were asked what impact the measures announced in the Autumn Statement would have on the market. The empty promises that the Government pledges regarding housebuilding seem to have been recognised across the industry, with 60% believing there will be no impact, and the rest saying there would only be minimal impact.

“As is always the case, there will be very little impact, if any, as a result of the Autumn Statement. The 40,000 homes pledged are affordable and so will not impact the general market. Despite the rhetoric, the Government will fail to build the 100,000 additional homes needed, which, if they did, would, in turn, necessitate a balancing of supply versus demand and lower price appreciation.”

Do you agree with the experts’ housing market forecasts for next year?