There has been a notable rise in the amount of over-65s investing in buy-to-let property, according to figures from Commercial Trust.
The mortgage broker has seen borrowers aged between 65-75 increase their share of buy-to-let mortgage applications by 5.43% in 2018, owed in part to the fact that a number of mortgage lenders have recently raised their maximum age at the end of the mortgage term criteria from 75 to 85-years-old, while also pushing up their maximum mortgage terms.
The data from Commercial Trust shows a 4% increase in the proportion of buy-to-let purchases and remortgages from over-55s, who now account for 39% of all buy-to-let mortgage activity.
For purchase-only applications, over-55s were responsible for almost a third (29.7%) of all business in 2018, which is up by 8% year-on-year.
Andrew Turner, the Chief Executive of Commercial Trust, says: “Our look at the age demographics for 2018 buy-to-let mortgage activity suggests that increasing numbers of older people are recognising the potential of buy-to-let investments.
“Our data indicates that many people reaching retirement are choosing to invest in bricks and mortar and the rental market, as a means to fund their retirement years.”
He adds: “Investing in property has the potential to deliver attractive rental yields and achieve capital growth, despite industry changes. I fully expect that the returns fare better than many other forms of investment.”
Are you an older investor who has decided to take the leap into the property market? Let us know what has encouraged you to enter the buy-to-let industry and why you’ve chosen to put money into the private rental sector.
We remind all landlords, whether you’re new to the industry or not, to stay up to date with the latest changes to lettings law, so that you provide safe and comfortable homes for your tenants.
Almost one in three Scottish tenants have no plans to ever buy their own homes, mainly because they are happy living in private rental housing, a new study has found.
The Tenant Research Survey, conducted by SafeDeposits Scotland, found that around 30% of Scottish tenants do not plan to ever own a property.
The research asked tenants about their experiences in the private rental sector and their expectations for the future.
Responses showed that, as well as many not aiming to buy their own homes, 71% said that they see themselves renting for the foreseeable future.
Victoria Smith, the Chief Operating Officer of SafeDeposits Scotland, says: “What this survey makes clear is that tenants cannot be characterised as a single group of people of a certain age, background or other profile.
“People of all ages and from all walks of life rent for a number of reasons. The responses the survey received revealed that some tenants rent because it works for their educational and professional needs, and is flexible – not just because they can’t afford to buy, as is a common generalisation.”
She continues: “Of course, for some people that is the case, but by no means for all.
“Whether tenancy is an active choice, a long-term or short-term necessity on the way to owning a property, it’s important that tenants understand their rights and responsibilities. The private rented sector in Scotland is diverse and growing. We want to help all parties in the sector to raise standards and ensure that it works for everyone.”
Smith adds: “These survey responses and the interest shown in our Tenant Conference indicate that tenants are becoming increasingly engaged in the private rented sector.”
Are you a Scottish tenant? If so, let us know what you like about living in the private rental sector and whether you think the new rules work for both parties.
Brexit uncertainty is failing to hinder the Scottish rental market, according to the latest Quarterly Report from letting portal Citylets, covering the first quarter (Q1) of the year.
Rent prices in the Scottish rental market continued to edge upwards in Q1, despite the political landscape, which has affected markets in other sectors. The average home to let in Scotland now costs £793 per month, following a 1.7% rise.
One and two-bedroom properties charted a familiar course, both recording positive annual growth in rent prices. However, mixed signals at the local level were recorded, especially in Scotland’s central belt.
Overall, the market operated at the same speed as in Q1 2018, with the average property taking 37 days to let.
Gillian Semmler, the Communications Manager for Citylets, comments: “Scotland’s private rented sector operated broadly to expectation against the underlying political chaos defining the Q1 period. There have been indications of a slower moving market, especially in Edinburgh, but certainly not as marked as in other property or, indeed, business sectors. More choice for tenants in the capital sees more tenants taking time to view multiple properties before committing. As a result, average time to let has increased by three days.”
Edinburgh
It now costs a record high of £1,115 per month to rent a home in Edinburgh, with a backdrop of lengthening time to let. This is consistent with anecdotal evidence from local agents of tenants shopping around and taking advantage of the increase choice in the market.
Q1 2019 saw properties take an average of 30 days to let – three days longer than in the same quarter of last year.
Rent price growth of 5% will once again cheer landlords and concern tenants, however, this is a lower rate of growth than previous quarters, with the time to let hinting at a possibly softening market, after more than nine years of annual growth each quarter.
Glasgow
Tenants in Glasgow have also been reportedly shopping around before committing to a rental home. Nonetheless, the figures for Scotland’s largest city remain stable, with rents up by a modest 2.9%, to an average of £771 per month, while the typical time to let was unchanged on last year, at 31 days.
Rents on three-bed properties rose by a significant 8.6% on Q1 2018, whereas four-beds fell, by 7.1%. Volatility in the data for larger properties, however, is not uncommon, given the lower volumes reported each quarter.
Glasgow’s main one and two-bed property markets continued to record strong rent price growth, at 5.3% and 3.0% respectively. 58% of all Glasgow properties are currently let within one month.
Aberdeen
Falls in rent were reported for all property types in Aberdeen in Q1 2019, however, at -3.5%, the rate of decline continues to ease. With re-let times continuing to reduce, it is fair to view the figures for Q1 as positive overall for landlords.
One-bed homes fared best over the period, with rent price growth of -2.5%, an average time to let of 49 days and 41% of properties let within one month.
A typical property in Aberdeen now costs £710 per month and takes 54 days to let – four days faster than in Q1 2018.
Dundee
Dundee started 2019 where it left off, as rents continued to move upwards, albeit at a modest 1% rise over the past year. The average property costs £620 per month and takes around a month-and-a-half to let, at 43 days.
As with other cities, the market data for Dundee was conflicting, recording declining rents for one and two-bed homes, but improved re-let periods. Rent prices for three and four-bed properties continued to climb annually.
West Lothian
Rental properties in West Lothian continue to enjoy strong demand, seeing average prices rise once again – by 3.5% in the year to Q1, to reach £710 a month.
The signs for this popular commuter belt region look positive for landlords, with the time to secure tenants falling notably, to just over a month, at an average of 34 days.
Andrew Meehan, of estate agent Rettie & Co., assesses the Scottish rental market: “The rental markets in Scotland’s two largest cities continue to experience high levels of demand, driving continued growth in achievable rental values at the start of 2019. Over the first quarter of the year, despite increasing stock levels in both markets, enquiry levels, especially in city centre locations, continue to outstrip supply, fostering market competition and supporting values.
“In the rural rental market in Central Scotland, demand from families, who in recent years have been increasingly considering renting over buying, have continued to seek out the right family home for longer tenancies.”
Although many reports are pointing the finger at Brexit for causing delays in the property market, London is starting to show some positive signs, becoming a buyers’ market for buy-to-let investors, new data shows.
Ongoing political uncertainty is clearly causing some buyers and sellers to adopt a wait-and-see approach towards property sales. However, with Brexit uncertainty continuing to hit house prices, a growing number of buy-to-let landlords are starting to see it as a good time to purchase.
New figures from specialist buy-to-let broker Commercial Trust Limited reveal that London regained its position as the leading region for buy-to-let business applications during the first quarter (Q1) of the year.
The number of submitted purchase mortgage applications for the capital in the 12 months to April rose by 4% on the previous quarter, to hit 15.8% of overall business. The South East was close behind, at 14.5%.
In Q4 2018, the South East had overtaken London for the first time.
Commercial Trust’s data ties in with a recent report from London estate agent Chestertons, which claimed that London is starting to offer improved rental yields, as the market shows signs of bottoming out.
The East of England and North West also enjoyed an increase in the proportion of buy-to-let applications submitted during Q1, with this type of business accounting for 12.5% of all applications in both regions.
The same two regions shared the top spot for buy-to-let completions over the quarter, with both contributing 13% of overall completions.
In total, remortgage buy-to-let applications continued to dominate in Q1, with 60% of business coming from landlords looking to refinance.
Andrew Turner, the Chief Executive of Commercial Trust, says: “The effects of Brexit have been keenly felt in London, and, perhaps, the stalling of house price growth has to some extent created a buyers’ market for buy-to-let.”
He believes that the firm’s latest figures underline the importance of London and the South East within the buy-to-let sector.
Turner explains: “For Q1 2019, these two regions contributed over 30% of our buy-to-let purchase applications, an increase from the 26% recorded in Q4 2018.
“Whilst it is good news to see increased activity in London, movement is not restricted to that area, and both the North West and East Anglia have also increased their proportion of overall purchase business during the quarter.”
He is positive about the future: “With Brexit now pushed back to later in the year, the combination of low interest rates, a wide variety of mortgage product choice, stalling house prices and soaring tenant demand, many investors are of a mind to invest in the private rental sector.”
ARLA Propertymark has issued its March Private Rented Sector (PRS) report, showing an increase in rental stock availability.
Rental stock supply and tenant demand
The available supply has risen to 203 properties per member branch during March, up from 196 in February. This is the highest ARLA Propertymark has reported since records began in 2015.
The year-on-year results show that supply is up 13%, compared to 179 per branch in March 2018. The demand from prospective tenants has also seen an increase, with the number of those registering per branch rising to an average of 67, compared to 65 in February.
Rent prices
Rent rises have fallen marginally in March for tenants, with 30% of agents reporting an increase by landlords. This is compared to 34% in February.
Year-on-year, ARLA Propertymark have reported this figure to be up 30%, from 23% in March 2018:
Landlords looking to sell
The number of landlords looking to sell their buy-to-let property and exit the market in March has remained at four per branch. This is up from three per branch last year.
David Cox, ARLA Propertymark Chief Executive, said: “Whilst its really positive that the number of properties available per branch hit a record high last month, this may be the first signs of the industry consolidating ahead of the tenant fees ban as agents either sell-up or merge.
“This, coupled with landlords exiting the market and rent costs continuing to rise, means the overall picture is far from positive for renters.
“The full effects of the tenant fees ban have not yet been felt, and now the Government is introducing yet more new legislation which will deter new landlords from entering the market, such as abolishing Section 21.
Buy-to-let lending for property purchases dropped again in
February, continuing the recent trend of declining investment in the sector,
according to the latest Lending Trends report from UK Finance.
In February, 4,800 new buy-to-let property purchase mortgages
completed, which is down by 7.7% on the same month of 2018.
However, 14,400 remortgages were completed in the buy-to-let
sector in February – up by 2.1% annually.
While buy-to-let lending for property purchases continue to
contract, due to tax and regulatory changes, buy-to-let remortgaging has
increased, as borrowers move from fixed rate mortgages and lock into attractive
rates.
In the wider property market, 24,880 new first time buyer
mortgages completed in February 2019 – 4.1% more than in the same month of the
previous year.
23,660 home mover mortgages were completed in the month,
which is up by just 0.1% year-on-year. While home movers are at the same levels
they were at this time last year, this is the fifth consecutive month of annual
growth in first time buyer figures.
At the same time, 18,200 new remortgages with additional
borrowing were recorded in February, which is up by 10% on the same month of
last year. For these remortgages, the average amount borrowed in the month was
£52,000.
Additionally, 18,360 pound-for-pound remortgages (with no
additional borrowing) were recorded – 7.8% more year-on-year.
The average loan-to-value (LTV) ratio in the remortgaging
market was 57%, while the typical loan-to-income (LTI) ration was 2.74. This is
considerably lower than mortgages for home purchases, which showed an average
LTV of 72% and LTI of 3.37. Customer engagement in the remortgaging market
remains high, with borrowers able to access a wide range of competitive
products.
Landlords, are you moving away from investing in new
buy-to-let properties and looking for attractive deals for your current
mortgages instead? It looks like this trend will continue in the sector.