Search Results For: buy to rent sector

Landlords to benefit from second charge market?

Published On: September 8, 2015 at 4:54 pm

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New research has indicated that remortgage or further advance customers could benefit from taking out a second charge loan.

V Loans estimates that this could be the case for nearly 10% of consumers.

Opportunities

The secured-lending specialist believes a mix of record law interest rates in the second charge market, coupled with the strong growth of the sector from 2011 gives an indication of the benefits for customers, alongside opportunities for brokers.

In addition, landlords could also be set to benefit from further competition in the buy-to-let second charge market, which could lead to significant price reductions. What’s more, this could make second charge lending a more attractive alternative to remortgaging, which could allow landlords to benefit from the heightened equity within their current portfolio.

On course to hit £750m in lending this year, the second charge market has seen year-on-year growth since 2011. Rates have fallen to record low of 4.05% above base rates, making the case for lenders to take out a second charge, while not causing any detriment to their withstanding mortgage arrangements.

With this said, V Loans predicts that only 50% of advisors promote second charges to their clients and as such is urging advisors to think of the benefits of these loans.

Landlords to benefit from second charge market?

Landlords to benefit from second charge market?

Best interests

‘Remortgaging or taking a further advance is not always in the client’s best interest and therefore it’s essential that all options are considered,’ said Marie Grundy, Managing Director of V Loans. ‘Interest-only customers, those benefiting from lifetime trackers and low fixed rate deals or those who do not want to incur substantial early repayment charges by remortgaging, including landlords who wish to release trapped equity, could all stand to benefit from second charge finance.’[1]

‘The pending alignment of regulation for first and second charge markets will deliver huge opportunities and innovation to the market allowing advisers to provide better customer outcomes. Intermediaries should seriously consider including second charges within their scope of service ahead of the regulatory changes next year,’ Grundy added.[1]

[1] http://www.propertyreporter.co.uk/finance/could-landlords-benefit-from-the-second-charge-market.html

 

Green Party Co-Convener Calls for Fairer Housing in Scotland

Published On: September 8, 2015 at 4:47 pm

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Maggie Chapman is a co-convener of the Scottish Green Party. She is calling for a fairer housing system in the country in the wake of the Scottish Government’s announcement to legislate rent controls.

Chapman is “delighted” that Scotland will soon introduce rent controls. However, she urges that they must be “real and meaningful, and tackle the serious housing problem we face.”

Chapman explains her viewpoint: “Better housing is a fundamental part of a better society; it is hard to see how we can improve people’s health, better educate our children and have a fairer and more equal economy if we fail to offer people decent homes.”

Housing in Scotland has followed the general pattern of the UK, with many homes now being rented out by private landlords.

Wealthy property investors are experiencing “profits rising year-on-year,” says Chapman. For those renting from them, the costs of letting eats up “greater and greater amounts of people’s disposable income”.

Green Party Co-Convener Calls for Fairer Housing in Scotland

Green Party Co-Convener Calls for Fairer Housing in Scotland

The young and those on low incomes are being priced out of homeownership by spiralling prices. Renting in the private rental sector has become “the norm”. But Chapman notes, “all too often, the property for rent is cramped, expensive and low-quality”.

Scotland is now facing a housing crisis. Chapman observes that in cities such as Aberdeen, rents have surged, pricing all but the very wealthy out of the city and causing “social segregation”.

The HomeLet index shows that rents around the UK have increased by 12% in the last year. Chapman argues: “When it is cheaper than ever to borrow money, there is no excuse for this.”

She continues: “In a society where many people under the age of 35 find themselves priced out of buying a home, we risk creating a cohort of people permanently locked into high-cost housing.”

But those affected have reacted, with many running campaigns. The Living Rent movement has forced the issue up the agenda and is hoping for a serious response from the Scottish Government.

Although Chapman believes in the power of rent controls, she hopes that they are “effective”.

“That’s why I put forward a motion to the Scottish Green Party conference next month, calling for the introduction of a points-based system of rent controls,” she explains. “This would mean that rents are set at an affordable level, based on the quality, size, location and facilities in the property for rent.”

She adds: “I want increases to be limited so they don’t push tenants into poverty.”

Chapman is also addressing evictions. At present, there is a no fault ground for eviction, meaning that landlords can remove their tenants whatever their circumstances.

She says: “I want all evictions to be discretionary, so landlords must give grounds for removing someone from his or her home.”

Additionally, Chapman would like to see the regulation of letting agents.

She continues: “This boom sector mediates the market, producing a situation where they are demanding rent increases that not even the landlords want.

“In one case, I was approached by tenants whose letting agent was terminating their lease because they’d lived in the property for two years, and the agent was worried they would start treating it as a home. It turned out that the landlord didn’t want them removed. It was a ruse to put the rent up.”

Chapman concludes: “Ultimately, housing is the cornerstone of a good society. While Thatcherites may delight in the rich profiting from an unprecedented transfer of wealth from the poor, we cannot allow neo-liberal dogma to condemn the young and the poor to expensive, low-quality housing.

“We need rent controls, an end to unfair evictions, and a radical overhaul of the housing system. This decision is just the start.”1

1 http://www.theguardian.com/housing-network/2015/sep/07/rent-controls-scotland-fairer-society-nicola-sturgeon

 

 

Remortgaging activity up in August

Published On: September 8, 2015 at 12:57 pm

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Remortgaging activity in August was higher than all other areas of the housing market, according to a new investigation.

Research from Connells Survey and Valuation shows that remortgaging activity rose by 25% during the last month, in comparison to July. What’s more, the number of remortgage valuations is up by 102% compared to August 2014.[1]

Increases

Total valuation activity was actually more muted in the last month, with the number of valuations across all sectors rising by 7% from July.

‘Concern and media attention about an interest rate rise in the near future is the key driver of this surge,’ said John Bagshaw, corporate services director of Connells Survey and Valuation. ‘Due to the very low Bank of England base rate, there are currently some very appealing remortgaging deals on offer from lenders. But homeowners have been influenced by a powerful perception that these deals will not last.’[1]

‘Underneath the short-term surge, remortgaging is also driven by a longer term shift,’ Bagshaw continued. ‘People are increasingly looking to upgrade their home rather than trade-and so, for a slightly different purpose, are also keen to take advantage of cheaper mortgage deals.’[1]

Bagshaw believes that, ‘the wider picture looks encouraging stable,’ and that, first-time buyers and home-owners are far more optimistic about the housing market now than they were at this point in 2014.’ He feels that this is evident, ‘from the strong, steady growth we’ve been seeing throughout 2015.’[1]

Existing owners

The number of valuations for already existing owner-occupiers who are searching for a new home has risen by 3% since July. Home mover activity is up by 30% in comparison to August 2014. Similarly, the number of first-time buyer valuations in August rose by 1% month-on-month and by 30% year-on-year.[1]

‘Home mover and first-time buyer activity has been sizeable and speedy growth over the last six month, so a period of more stable growth is a sign of consolidation,’ observes Bagshaw. ‘It shows that these sectors command long-term momentum and demonstrates a more stable optimism from households about the future.’[1]

Remortgaging activity up in August

Remortgaging activity up in August

‘For those moving up the ladder, low mortgage rates are combining with property price growth as a basis for their next purchase. Meanwhile, first time buyers don’t have the benefit of this natural deposit, but are showing remarkable fortitude in the face of price rises-buoyed by a jobs market that is increasingly showing real wage growth.’[1]

The only part of the market to see a fall in activity during August was valuations for buy-to-let purposes, which fell by 5% month-on-month. However, the total number of valuations carried out for buy-to-let investors increased by 29% year-on-year.[1]

Popular

Mr Bagshaw believes that, ‘buy-to-let has retained its winning popularity with investors. The slight slowdown the sector experienced this month is likely due to some investors taking a step back to calculate the cost of the Chancellor scrapping certain tax exemptions for buy-to-let landlords in the Summer Budget.

‘However, the fundamentals of the rental market remain very strong, driven by tenant demand. Even buy-to-let-once a rollercoaster sector in terms of growth-is showing signs of settling into a positive pattern of strong and steady growth, a pattern replicated across many other sectors of the mort

[1] http://www.propertyreporter.co.uk/property/remortgaging-activity-soars-in-august.html

 

Remortgaging Activity Surged in August

Published On: September 8, 2015 at 11:43 am

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Remortgaging activity outperformed all other sectors of the housing market in August, according to new research from Connells Survey & Valuation.

The number of valuations for remortgaging increased by 25% in August compared with July. As a result, the amount of remortgage valuations grew by 102% over the last 12 months.

Total valuation activity was slower in August. The number of valuations across all sectors, including remortgaging, rose by 7% monthly. Activity increased by 48% compared with August 2014, mostly driven by remortgaging.

Corporate Services Director of Connells Survey & Valuation, John Bagshaw, says: “Concern and media attention about an interest rate rise in the near future is the key driver of this surge.

Remortgaging Activity Surged in August

Remortgaging Activity Surged in August

“Due to the very low Bank of England base rate, there are currently some very appealing remortgaging deals on offer from lenders. But homeowners have been influenced by a powerful perception that these deals will not last.

“Underneath the short-term surge, remortgaging is also driven by a longer term shift. People are increasingly looking to upgrade their home rather than trade, and so, for a slightly different purpose, are also keen to take advantage of cheaper mortgage deals.

“Meanwhile, the wider picture looks encouragingly stable. First time buyers and homeowners are far more optimistic about the housing market now than they were at this point in 2014, and this is evident from the strong, steady growth we’ve been seeing throughout 2015.”

The amount of valuations for existing owner-occupiers looking to move house has increased by 3% since July. As a result, activity on behalf of home movers rose by 30% from August 2014.

First time buyer activity was similar. The number of valuations conducted in August for those looking to buy their first home rose by 1% monthly and 31% year-on-year.

Bagshaw continues: “Home mover and first time buyer activity has been sizeable and speedy growth over the last six months, so a period of more stable growth is a sign of consolidation.

“It shows that these sectors command long-term momentum and demonstrates a more stable optimism from households about the future.

“For those moving up the ladder, low mortgage rates are combining with property price growth as a basis for their next purchase. Meanwhile, first time buyers don’t have the benefit of this natural deposit, but are showing remarkable fortitude in the face of price rises – buoyed by a jobs market that is increasingly showing real wage growth.”

The only sector to see a fall in August activity was buy-to-let, in which valuations dropped by 5% on July. Despite this, the total number of valuations carried out for buy-to-let investors increased by 29% compared to last year.

He concludes: “Buy-to-let has retained its winning popularity with investors. The slight slowdown the sector experienced this month is likely due to some investors taking a step back to calculate the cost of the Chancellor scrapping certain tax exemptions for buy-to-let landlords in the summer Budget.

“However, the fundamentals of the rental market remain very strong, driven by tenant demand. Even buy-to-let – once a rollercoaster sector in terms of growth – is showing signs of settling into a positive pattern of strong and steady growth, a pattern replicated across many other sectors of the mortgage market.”1

1 http://www.propertyreporter.co.uk/property/remortgaging-activity-soars-in-august.html

eMoov Raises Half of Crowdfunding Target Within Hours

Published On: September 1, 2015 at 12:17 pm

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Online estate agent eMoov is marching towards its £1m crowdfunding target, hitting the halfway mark yesterday after its launch on Friday evening.

The fundraising effort had hit £507,380 yesterday afternoon, from 51 investors, with the highest single investment of £250,000.

eMoov will give 5% of equity in return for the £1m it is hoping for, valuing the firm at £20m.

eMoov Raises Half of Crowdfunding Target Within Hours

eMoov Raises Half of Crowdfunding Target Within Hours

Its business plan states that the company has the potential to be valued at £128m. However, it is currently losing money.

In its Crowdcube pitch, eMoov says that it made pre-tax losses last year of £751,941 and expects pre-tax losses this year of £2,003,377.

Next year, it is predicting pre-tax losses of £2,246,717, which will slow to losses of £442,909. In 2018, it forecasts pre-tax profits of £10,681,744.

The pitch states that eMoov was founded to “disrupt a broken, anti-consumer property industry” and expects online market share to hit 50% by 2020.

It says that in July, 341 properties received 533 offers, leading to 246 sales. It also claims that 48% of leads convert into listings.

The firm hopes to grow listings from a current 3,529 to 40,768 by 2018.

The business plan says that within the top 30 online agents, eMoov is a market leader, with a 16% share of all online listings.

It notes that Purplebricks has achieved five star ratings from 85% of its customers, but HouseSimple has poor customer reviews and weak technology.

It describes Tepilo as offering “poor customer service”. Estates Direct apparently has “very poor ranking and listing volumes, they have also priced themselves out of the market”.

Allegedly, Hatched has “problems with senior management, no SEO, very poor tech and lack of automation, mainly lettings focused”.1

In the pitch, eMoov reveals plans to expand into the lettings sector within the next two years, hoping to double the size of the business.

Its exit strategy states that the company will either float on the stock market or sell to a trade buyer within three to five years.

1 http://www.propertyindustryeye.com/money-rush-online-agent-emoov-raises-thousands-within-hours/

Scottish PRS Almost Triples as Homeownership Drops

Scottish PRS Almost Triples as Homeownership Drops

Scottish PRS Almost Triples as Homeownership Drops

Declines in homeownership and social housing have caused the private rental sector to boom in Scotland.

The new Scottish Household Survey 2014 reveals that the social rental sector dropped from 32% of all households in 1999 to 24% last year.

Over the same period, the proportion of households in the private rental sector almost tripled from 5% to 14%.

In 1999, 61% of Scottish households were owner-occupiers. This hit 66% in 2007, but has now dropped to 60%.

The total number of households in Scotland has increased by 11% since 1999, to 2.42m last year.

Homes for Scotland, a builders trade body, claims that the fall in homeownership is the result of a change in circumstance and not a change in aspiration.

Chief Executive of Homes for Scotland, Philip Hogg, says: “Those in the squeezed middle have been left with little option other than to rent privately following a more than 40% fall in home building activity since 2007, coupled with the difficulty many who wish to buy still face in terms of getting large mortgage deposits together.”1

The report can be found here: http://www.gov.scot/Publications/2015/08/3720

1 http://www.propertyindustryeye.com/private-rented-sector-in-scotland-triples-as-home-ownership-falls/