Search Results For: buy to rent sector

Two New Custodial Deposit Schemes and Rogue Landlord Fund Announced

Published On: November 11, 2015 at 10:04 am

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Two New Custodial Deposit Schemes and Rogue Landlord Fund Announced

Two New Custodial Deposit Schemes and Rogue Landlord Fund Announced

The Department for Communities and Local Government has announced new measures for tackling rogue landlords and two new custodial deposit protection schemes.

The Deposit Protection Service (DPS) has been awarded a new license and from next year, there will be two new custodial schemes in England and Wales.

One will be operated by the Tenancy Deposit Scheme (TDS) and the other by My Deposits, both of which currently run insurance-based schemes.

The Department for Communities and Local Government also announced a £5m fund to assist up to 65 councils in combating criminal landlords. It believes that 3,000 rogue landlords could now face further enforcement action or prosecution.

Greg Clark, the Communities Secretary, claims the fund will help councils with a large proportion of their private rental housing stock, particularly beds in sheds.

Councils will be able to use the funds to increase inspections of properties, conduct more raids, bring more prosecutions and demolish illegal buildings.

Clark states: “We’re determined to keep the country building and increase the supply of good quality homes that families want, both to buy and for rent.

“Key to this is rooting out the minority of landlords in the private rented sector that let out poorly-maintained and unsafe properties to vulnerable tenants, making their lives a misery.”1 

According to the Department for Communities and Local Government, there are currently over 4.4m households renting privately.

Since 2013, almost 40,000 inspections have been conducted and more than 3,000 landlords are now facing further enforcement action or prosecution.

1 http://www.propertyindustryeye.com/two-new-custodial-tenancy-deposit-protection-schemes-announced/

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research shows the growth of the PRS in UK

Published On: November 9, 2015 at 12:34 pm

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Interesting new research shows that in excess of two million homes have changed their tenure during the last decade, when taking into account the total number of property sales between owner occupiers and landlords.

The research, conducted by Countrywide plc, indicates that some 1.5million homes have changed from being lived in by their owner to be lived in by their tenant. 550,000 have switched the other way, moving from the private rental sector into owner occupation.

As a result, one million extra homes have been occupied by tenants, which is equivalent to the number of households in the North East of England.

Transferring

Homes that were transferred from owner occupation into the private rented sector made up half of the growth in the total number of rented homes during the same period. In addition, the investigation found that 700,000 new homes that have been built since 2005 have come into the private rented sector. The remaining homes that have changed tenure came from residential conversions and social housing.

First-time purchasers bought 65% of the homes that left the Private Rental Sector and during the last year, 45,000 first time buyers purchased a property from their previous landlord. This equated to 15% of those who got onto the housing ladder for the first time.

Given that the private rented sector is largest in London and the South East, these areas are where first timers are most likely to purchase a home from their landlord.

In these two regions, the difference between what new buyers paid when purchasing from a landlord and those that didn’t is highest. Those buying from a landlord spent on average 8% less than those that didn’t.

Research shows the growth of the PRS in UK

Research shows the growth of the PRS in UK

Growth

Johnny Morris, director of research at Countrywide, said, ‘the rapid growth of the private rented sector has to come from somewhere, while the tenure may change, the physical home remains.’[1]

‘The sector has been growing since 2005 but the number of home owners has fallen in each of the last 10 years,’ Morris continued. ‘The scale of shift in tenure shows that the current push from the Government to increase the number of homeowners is unlikely to be enough to reverse the decline.’[1]

Morris notes that, ‘although landlords and first-time buyers might not appear natural bedfellows, because they tend to look for similar types of homes they do end up selling to each other.’ He says, ‘many landlords face a choice 10 to 15 years after buying a home, between refurbishing the property or selling it. Those landlords who choose to sell up offer an opportunity to first time buyers willing to put some work into their first home, often adding to its value.’[1]

‘Rents grew by 4.8% over the year, supported by the imbalance between growing tenant demand and constrained supply of homes to rent. The usual seasonal factors are seeing small month on month falls as the summer rush continues to subside,’ he concluded.[1]

[1] http://www.propertywire.com/news/europe/uk-rented-property-sector-2015110911179.html

 

Beware! Low Mortgage Rates Have Frightening Fees

Published On: October 29, 2015 at 2:51 pm

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Categories: Finance News

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As if we need more fear-inducing facts at this time of year! Moneyfacts.co.uk has revealed that the true cost of low rate mortgages is frightening.

Beware! Low Mortgage Rates Have Frightening Fees

Beware! Low Mortgage Rates Have Frightening Fees

New research from the website found that too many borrowers opt into low rate products mistakenly believing that they will save them money.

However, the study shows that many would be better off choosing a deal with no arrangement fee over a lower rate deal.

Finance Expert at Moneyfacts, Charlotte Nelson, explains why: “Whilst these low deals look great on paper, they are often compensated by high fees that can scare even the most seasoned borrower.

“With fees on mortgages ranging from nothing all the way up to £2,794, with the average mortgage fee sitting at £939, it is easy to see why it can be a costly mistake to opt for the wrong deal.”

She states that low rate high fee products favour borrowers buying properties at the high end of the market.

She continues: “However, large fees can turn what appears to be a cheap deal into a costly one for the majority.

“For example, by opting for the lowest two-year fixed rate mortgage at 60% LTV with no fee will mean borrowers will be around £1,500 better off a year compared to the lowest option in that sector.

“Arrangement fees allow providers to have greater flexibility in what rate they offer, however, the set up costs are not greatly different between mortgages, so many will question what this is actually for.”

Nelson reports that the size of the arrangement fee is particularly important on two-year fixed rate deals, due to the short-term nature of the product: “Borrowers will have to remortgage relatively soon and could again pay yet another fee.”

She urges borrowers to calculate the true cost of their loan: “There are deals out there with no arrangement fee, so borrowers will have to decide whether they choose a trick or treat when picking a mortgage.”1

Don’t be caught out by high fees, make sure you work out how much the loan will actually cost you.

1 https://www.introducertoday.co.uk/breaking-news/2015/10/cheap-mortgages-come-with-frightening-costs

Investment in student housing rises

Published On: October 21, 2015 at 11:47 am

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New figures suggest that investment in the British student housing market rose sharply in the first half of this year.

Data from The Mistoria Group, a leading student property investment firm, reports that investment in this sector hit £3.98bn earlier this year, well more than the £2.35bn recorded in the whole of 2014.[1]

Increases

In the first half of 2015, London saw a new record-high of £1.98bn of transactions. This was a reflection of the number of investors buying into the potential yields of a well-maintained student home, as opposed to buy-to-let or commercial property.

Investment in the student sector in the North West has risen by 66% over the last 12 months, with the South East (65%) also showing considerable improvements.

Mish Liyanage, Managing Director of the The Mistoria Group, noted, ‘in some parts of the UK, student housing is limited in numbers and of poor quality, with only student pools and tatty HMOs available.’[1]

Investment in student housing rises

Investment in student housing rises

Opportunity

Liyanage believes that, ‘investors have a great opportunity to invest in Universtiy towns where there is short supply of quality, affordable student property. We have seen some investors divert a significant amount of their funds from traditional buy-to-let student property. For as little as £150,000, an investor can buy a four bed HMO in the North West, in a good location for students and professionals, fully refurbished, furnished and tenanted for the coming year.’[1]

‘A key driver for the rise in demand for HMO student property is down to the huge growth in student numbers over the last few years,’ Liyanage continued. ‘According to UCAS, the number of university applicants has reached a record high, as demand for higher education courses continues to rise. Figures published earlier this month reveal that overall there has been a three per cent increase in the number of applications, compared with the same point last year, he added.[1]

Concluding, Mr Liyanage said, ‘Investing in student accommodation offers an excellent long-term investment option.  Typical rents are significantly higher for student properties, than a comparable buy-to-let property in the same city and student property is highly likely to be in constant demand throughout the calendar year.’[1]

[1] http://www.propertyreporter.co.uk/landlords/student-housing-market-hits-%C3%A3%C2%A2398bn.html

 

 

HMRC’s Landlord Tax Campaign Brings In Over £50m

Published On: October 16, 2015 at 3:07 pm

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HMRC's Landlord Tax Campaign Brings In Over £50m

HMRC’s Landlord Tax Campaign Brings In Over £50m

A HM Revenue & Customs (HMRC) campaign, aimed at helping buy-to-let landlords get their taxes in order, has brought in over £50m since its launch.

The Let Property Campaign, introduced in September 2013, is one of the tax authority’s most successful voluntary disclosure opportunities.

More than 10,000 landlords have disclosed tax on previously undeclared income through the scheme.

To further assist landlords, HMRC has announced that it will be hosting a Twitter Q&A on Tuesday 20th October 2015 from 6pm to 9pm.

The session will be run in partnership with several landlord groups. Each organisation will have 30 minutes to answer questions concerning many aspects of renting out homes, offering essential advice for investors.

HMRC’s section on tax is from 6pm to 7pm on @HMRCcustomers.

Head of Campaigns at HMRC, Caroline Addison, says: “The Let Property Campaign bringing in more than £50m is further proof that our campaigns approach works. HMRC’s 20 campaigns have now together generated over £1 billion across a variety of sectors.

“We want to help educate landlords, so the Twitter evening will give people a chance to get their questions answered by a group of expert organisations.”1 

Throughout the campaign, HMRC has written to over 80,000 landlords and more than 50,000 customers have used its online educational services.

If you have any questions, remember to be online for the session and follow us on Twitter @NewsLandlords

1 https://www.landlordtoday.co.uk/breaking-news/2015/10/hmrcs-landlord-campaign-brings-in-more-than-50-million

UK residential market in 6 month activity high

Published On: October 14, 2015 at 1:01 pm

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Encouraging new data indicates that UK housing market activity climbed to its highest level in the last six months. In addition, last month saw the second highest monthly level on record, according to research from Connells Survey & Valuation.

September also saw 0.5% property valuations carried out than in March 2015, which saw the highest recorded figure.

Activity increase

Annually, total valuation activity rose by 29%, following a 23% month on month rebound since August of 2015.

John Bagshaw, Corporate Services Director at Connells, feels that,’ Britain’s housing market is going from strength to strength.’ He said that,’ against a brightening economic background, players in all parts of the market are feeling more confident about their prospects. Valuation activity is growing beyond the seasonal pick-up at the end of August, with year-on-year growth gathering momentum.’[1]

Further data from the report shows that the total number of valuations carried of specifically for first-time buyers increased by 25% in September in comparison to August. There was also an 18% increase compared to September 2014.[1]

Valuation activity amongst existing home movers performed to a higher rate, increasing 26% month-on-month and by 23% year-on-year. ‘First-time buyers aren’t just feeling more confident, they are now following this up with real action and contributing a good portion of growth in the UK housing market,’ noted Bagshaw. ‘There are no signs yet that schemes such as Help to Buy are going to be phased out, helping to suppress the barriers to setting a first foot on the ladder,’ he added.[1]

First-time acceleration

‘Meanwhile, wages are growing faster than inflation and purchase prices have cooled a little in recent months, all contributing a good portion of growth in the UK housing market,’ Bagshaw continued. ‘Moreover, the latest focus from the government on starter homes is a promising sign there is at least a strong intention to maintain support at the bottom of the ladder.’[1]

Bagshaw also noted, ‘home movers have also been buoyed by the same trends. Rising real term wages combined with steadily increasing property values mean that many of those who are already fortunate enough to have a place of their own feel it’s a great time to buy.’[1]

UK residential market in 6 month activity high

UK residential market in 6 month activity high

The report also shows that remortgaging also experienced another positive month. Total valuations for those looking to take out a new mortgage against the value of their current home increased by 16% month-on-month and by 49% year-on-year.[1]

Buy-to-let stability

Furthermore, the buy-to-let sector has seen more steady growth, with the total number of valuations increasing by 13% since September of last year. Monthly, valuations carried out by on behalf of would-be buy-to-let investors increased by 21%.[1]

Mr Bagshaw believes, ‘the remortgaging sector is continuing to power ahead with plenty of people still opting to improve rather than move. High demand in this sector is still being driven by the large number of good mortgage deals out there, as homeowners rush to capitalise on the value of their home, while it’s still relatively cheap to do so.’[1]

‘Meanwhile landlords are proving resilient. Many thought the buy to let market might be in full retreat after a Summer Budget aimed at clamping down on the sector. But most investors’ panic was short lived as they realised that the fundamentals of buy to let’s profitability, namely large demand from tenants and low mortgage rates, were still in place. Far from being a drag, the sector capped off what has been a very good month for total valuations,’ Bagshaw concluded.[1]

[1] http://www.propertywire.com/news/europe/uk-property-activity-report-2015101311084.html