Search Results For: buy to rent sector

Three-quarters of landlords feel arrears will remain steady

Published On: August 4, 2015 at 9:17 am

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Research has discovered that the majority of landlords believe that rental arrears will stay relatively steady during the next year.

A study conducted by Paragon Mortgages has revealed that 75% of landlords feel rental deficits will hold firm in the next twelve months.

Increase

Paragon’s latest Private Rented Sector Trends Survey results for quarter two of this year show a 4% increase in landlords that believed rental arrears would remain stable. This represented the third successive increase. Landlords reporting an expected increase remained at a low number, unchanged from the first quarter at 8%, whilst landlords expecting a decline stood at 6%.[1]

Data from the report also shows that 17% of landlords are looking to buy more rental properties in the coming three months. Terraced and semi-detached houses were most desirable, with 38% of respondents saying that they were looking for these particular property types. 35% said they were looking for apartments.[1]

Three-quarters of landlords feel arrears will remain steady

Three-quarters of landlords feel arrears will remain steady

John Heron, Director of Paragon Mortgages, commented, ‘landlords continue to experience strong tenant demand and are keen to add to their portfolios. The positive signals being picked up elsewhere around the economy also seem to have flowed through to the PRS with landlords experiencing low arrears and low, stable voids.’[1]

[1] http://www.propertyreporter.co.uk/landlords/75-of-landlords-believe-arrears-will-remain-st4ble.html

 

Prime Central London Sales Up but Down 32% Annually

Published On: August 4, 2015 at 8:59 am

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House sales in the prime central London market rose by 21% in the second quarter (Q2) of 2015 compared to Q1, but are down 32% annually, according to the latest quarterly report.

Prices have fallen slightly, by 0.6% over Q2 compared with the previous quarter, found recent prime central London data from real estate firm JLL.

Prime Central London Sales Up but Down 32% Annually

Prime Central London Sales Up but Down 32% Annually

However, the report says that the sales market remains resilient and although cautious, buyer demand has recovered since the drop before the general election in May.

Stamp Duty reform is still impacting the market though, and buyers and vendors are assessing the effect of these changes, especially in the £5m-£10m price range.

Meanwhile, the sub-£2m market has been the least affected by the election, Stamp Duty and mansion tax threats, with prices up 2.2% annually.

Sales Director at W.A.Ellis estate agents, part of JLL, Richard Barber, says: “While transaction levels remain low, particularly in the £3m-£7m sector of the prime central London market, there is undoubtedly a noticeable flight to quality.

“Affordability issues, in the face of increased Stamp Duty costs, have affected purchaser confidence, but high prices per square foot are still being achieved for the most exclusive properties.”1

The prime central London lettings market has experienced an increase in demand from private renters and supply levels have remained high throughout Q2, claims the report.

It adds that London’s improved economic conditions are causing growth in rent prices, up 1% compared to Q1 and 1.5% on last year.

Lettings transactions have risen by 4% overall in Q2, as election uncertainty caused some buyers to rent instead. Year-on-year, transactions are down 8%.

Letting Director and Head of Agency at W.A.Ellis, Lucy Morton, explains: “There has been an increase in rental stock available, mainly as a result of landlords awaiting the outcome of the general election and deciding now to let instead of sell, and these higher stock levels have meant that competition between landlords has increased, with properties in optimal condition letting first.

“This has also meant that the market has become very price sensitive with more people turning to the rental sector after being unable to secure finance or find the right property to buy.”1

The report concludes that the future of the prime central sales market is looking stable due to the majority Government and low interest rates. Prices are expected to rise by 1.5% during the rest of the year.

The lettings market is due to see rental values increase by around 3%, with more people preferring the flexibility of renting.

1 http://www.propertywire.com/news/europe/central-london-prime-property-2015080310817.html

 

The Problems with London’s Luxury Property Boom

Published On: July 31, 2015 at 4:49 pm

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Along the Thames in central London is what can only be described as a building site. The many luxury properties being built in the capital are said to bring money into the city, which trickles down to the general public, not just to the super rich.

In fact, this luxury property boom could have damaging effects on the rest of the country. A Global Witness investigation discovered that around one in ten properties in the City of Westminster (9.3%) and 7.3% of properties in Kensington and Chelsea are owned by investors registered in offshore firms.

The Problems with London's Luxury Property Boom

The Problems with London’s Luxury Property Boom

It is easier to invest stolen money in property than try to hide lumps of cash. The London property market is increasingly attractive to tax dodgers, secret overseas investors and criminal gangs.

As the housing crisis has continued, and continued, politicians have insisted that housing shortages, soaring house prices, eradication of social housing and the messy private rental sector are normal. Politicians have taken no blame for the state of the housing market, but expect the public to manage.

This is no surprise, as they are not the ones struggling. Families are being moved out of London and over half of the people hit by the benefit cap will find the whole of the South of England unaffordable to them.

However, the coalition government pushed through a change to planning rules that mean many developers do not have to build or pay for social housing when constructing large residential developments.

Luxury property developments will not solve the housing crisis. Public housing is where investment is needed.

Some argue that rent controls and regulation of private landlords will avoid more housing stock being sold off to the buy-to-let sector.

While politicians suggest that the problems will end, the situation for those struggling to keep a roof over their heads seems to be increasingly challenging.

Housing as a concept has moved from shelter to asset. When Labour proposed a mansion tax, critics focused on those that have supposedly earned their capital gains, rather than entered the market at a convenient time, leaving many now without a viable option.

The current problem of a lack of supply and growing demand is deep-rooted in a housing system that has simply not been building enough homes.

Housing is now considered a profitable pursuit and central London showcases exactly that. It is no longer a liveable space for many people.

Luxury developments are not solving the problems that those in unstable situations, or even homelessness, are facing.

Paragon report high profit increase

Published On: July 31, 2015 at 10:47 am

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The Paragon Group of Companies, parent firm to Paragon Mortgages, has today announced its financial results for the second quarter of 2015.

Profits

Encouragingly, the groups total operating profits amounted to £98m in the nine months to 30th June 2015, an 11% increase on the same period last year. In addition, Paragon Mortgages record completions totalling £370.3m in the quarter, representing a 98% increase on the same quarter last year. In the year as a whole, buy-to-let finishes totalled 816.5m.[1]

New business secured stood at a cumulative total of £864.9m at the end of the quarter, in comparison to £352.7m at the same time in 2014.

Paying dividends

Managing director of Paragon Mortgages, John Heron, commented, ‘we have seen a substantial increase in market share over the last year as our strategy to diversify funding has started to pay dividends.’ Heron said this was the case,’ against a background of strong and sustained tenant demand in a private rented sector that has doubled in scale in the last ten years and now accounts for 4.9m homes.’[1]

Paragon report high profit increase

Paragon report high profit increase

‘Buy-to-let plays an important role in supporting the sector and making sure the market can respond to this continued increase in demand for rented homes, ‘Heron added.[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2015/7/paragons-buy-to-let-business-doubles

 

 

Sales of High Price Homes Halt

Published On: July 28, 2015 at 9:56 am

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The amount of sales of homes worth over £1.5m is expected to drop for the first time in two years due to Stamp Duty reform.

Jackson-Stops & Staff estate agent says that sales have been affected, halting and potentially reversing the 36% annual growth witnessed between 2012-14.

Sales of High Price Homes Halt

Sales of High Price Homes Halt

Nick Leeming, Chairman of Jackson Stops & Staff, which has 44 offices nationwide, says: “The wider UK residential property markets are reasonably buoyant now.

“However, the revision to Stamp Duty rates late last year has contributed to the widespread stagnation of the higher valued markets in 2015, both in London and the country, where many properties are finding it difficult to attract buyers.

“Sale volumes have plateaued across the country in response to high transaction costs, reflecting the fact that the UK has one of the highest taxed property sectors in the world.”

The reform means that buyers of properties worth between £925,001-£1.5m must pay an extra 10% in Stamp Duty, and those buying homes worth over £1.5m now have a further 12% to pay.

Leeming continues: “We have an ageing house-owner population with too few younger entrants onto the property ladder.

“Mortgage funding is difficult to raise for people in their 40s, even if they have been previous house-owners, irrespective of their credit history.

“We need to encourage trading down so that larger houses are released to families needing more space.”1

Director of Jackson-Stops & Staff in Sevenoaks, Kent, Alastair Hancock, adds: “Over a third of our available stock is priced in excess of £1.5m and this is no wonder given what little incentive there is for buyers at the mid to high end of the market currently.

“Since the Stamp Duty hike last December, we have seen a significant decline in volume of sales at this level.”1

1 http://www.propertyindustryeye.com/sales-of-higher-value-homes-at-stagnation-point/

Aldermore Updates BTL Mortgages

Published On: July 24, 2015 at 4:51 pm

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Aldermore has updated its whole range of buy-to-let mortgages, launching new standard and specialist products for simple and complex cases.

The products are aimed at all types of brokers and landlords, including limited companies.

Aldermore Updates BTL Mortgages

Aldermore Updates BTL Mortgages

The main aim of the overhaul is to put Aldermore’s residential and commercial buy-to-let products under one scheme. Now residential mortgage brokers and landlords will have access to a wider range of products, from the standard selection for individuals with one property, to the specialist collection for limited companies, Houses in Multiple Occupation (HMOs) and multi-freeholds.

Likewise, commercial mortgage brokers and landlords can now benefit from the standard range, including two, three and five-year fixed rates from 4.18%. The maximum loan-to-value (LTV) available is now 80%, up from 75%. These deals were previously unavailable to commercial mortgage consumers.

The specialist selection allows residential mortgage customers to access a different range of products, aimed at more complex cases. These include two, three and five-year fixes from 5.18% and variable rates from 4.93%.

A recent study by Aldermore revealed that 84% of intermediaries believe that lenders should be more innovative in an effort to meet the varied needs of landlords.

In the survey of 323 intermediaries, Aldermore found that 63% of respondents think that landlords are faced with too many restrictions from lenders.

Additionally, 29% of intermediaries said that lenders seem reluctant to lend to landlords and 53% believe that lenders don’t do enough to support the needs of the changing buy-to-let sector.

Group Managing Director of Mortgages at Aldermore, Charles Haresnape, comments: “The revamp we have introduced today across our entire buy-to-let mortgage range clearly demonstrates our commitment to the buy-to-let market and shows we will not sit still.

“Our new range covers the full and broad spectrum of buy-to-let, from the simple to complex, catering for all types of broker and landlord, including those companies that own buy-to-let property, which is a feature that may be more attractive to some borrowers post the recent Budget changes.

“These changes have been introduced in response to feedback from our broker and landlord customers. As a relatively new entrant to the banking sector, it is imperative that we listen to our customers’ needs and we are constantly looking at ways to innovate and evolve.”1 

1 https://www.landlordtoday.co.uk/breaking-news/2015/7/aldermore-revamps-btl-mortgage-range