Search Results For: buy to rent sector

Landlords increasing rents and reviewing portfolio sizes

Published On: August 30, 2017 at 8:57 am

A rising number of landlords are selling off their properties and raising their rents in response to regulatory alterations and political uncertainty. These actions are in a direct response to the Brexit and General Election results.

19% of landlords with 20 or more rental properties has reduced the size of their rental property, according to a new survey from BDRC Continental – on behalf of Foundation Home Loans.

Portfolio Reduction

38% of landlords quizzed said that they had reviewed the size portfolios to make sure they could withstand rising costs. 7% said that they have sold off their properties, in order to reduce portfolio sizes or to diversify.

Apart from political uncertainty, a number of landlords have been deterred by recent tax alterations, including the 3% Stamp Duty surcharge and changes to mortgage interest tax relief.

The percentage of UK landlords who reviewed their portfolio size by region following the results were:

UK	38%
East of England	40%
East Midlands	50%
London (Central)	45%
London (Outer)	40%
North East	43%
North West	34%
Scotland	35%
South East	40%
South West	38%
Wales	32%
West Midlands	35%
Yorkshire	28%

Rent Rises

Landlords in the East Midlands were found to have raised rents the most, with 41% here choosing to do so, more than the total average of 30%.

By region, the largest rent rises were recorded in:

UK	30%
East of England	33%
East Midlands	41%
London (Central)	24%
London (Outer)	24%
North East	23%
North West	35%
Scotland	15%
South East	33%
South West	31%
Wales	23%
West Midlands	31%
Yorkshire	31%

Landlords increasing rents and reviewing portfolio sizes

Nearly three quarters (71%) of landlords said they had seen a fall in confidence.

Jeff Knight, Marketing Director at Foundation Home Loans, noted: ‘Landlords have been met with a raft of changes, from stamp duty charges to shifts in tax policy, and the lack of certainty on the political front has clouded the picture somewhat. The response has been to ‘batten down the hatches’, streamlining larger portfolios and protecting income by increasing rents – decisions that can be reviewed once the buy to let market is more accommodating.’

‘The fact remains that, whether it’s as a stepping stone to home ownership or a longer term lifestyle decision for tenants, the rental sector is an increasingly important part of the housing mix. This will ultimately be best served by a wide choice of property, and good landlords who can have confidence in decent returns.’[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2017/8/landlords-batten-down-the-hatches-and-increase-rents

£2.3bn of rental payments to be funded by Bank of Mum and Dad

Published On: August 29, 2017 at 9:00 am

Author: Em Morley

Categories: Property News

Tags: bank of mum and dad,rental market,renters,tenants

An interesting new report has revealed that ‘the Bank of Mum and Dad’ is to fund 2.3bn of rental payments during 2017.

Research from Legal & General and Cebr suggests that the Bank of Mum and Dad will pay out £415 each time a rental payment is made.

Assistance

Data from the report shows show 9% of renters have financial assistance from their parents.

Previous research from Legal & General and Cebr suggested that the Bank of Mum and Dad will support £6.5bn of lending to first-time buyers, in order to help them get onto the ladder.

This means that the Bank of Mum and Dad will fund some £8.8bn during 2017, to help children either rent or buy a property.

Concerning

Dan Batterton, Fund Manager, Build to Rent at LGIM Real Assets, noted: ‘Legal & General has been tracking the role of The Bank of Mum and Dad for some years now – but this is the first time we’ve looked at its role in the rental market and the results are concerning. It is a real challenge for young people who are reliant on parental handouts just to make the rent. The intergenerational inequality that creates the demand for BoMaD funding continues to widen and now it’s affecting renters too. The lack of affordable housing, low wage growth relative to inflation and burdens of student debt mean that many kids can’t even rent somewhere without significant contributions from their family. Parents want to help their kids get on in life, and the Bank of Mum and Dad is a testament to their generosity, but it is also a symptom of our broken housing market.’

Coins and bank notes built into a house.

£2.3bn of rental payments to be funded by bank of Mum and Dad

‘The UK is experiencing a supply-side crisis in the rental sector. We need more professional, affordable tenures and more choice for renters. We need to build more homes for the young, old and families alike – more quickly and cost effectively. Renters are currently facing not only expensive rental payments but moving costs, agent fees and deposits which are reducing flexibility – something that should be a benefit of renting.

Concluding, Mr Batterton said: ‘The Build to Rent sector is only going to become more important in the UK’s housing mix. We need to be able to offer young people a good selection of affordable options for rental properties – either for the long term or as a step to buying their own home. Institutions like Legal & General can regenerate not just residential housing, but the towns and cities in which the homes are built. Infrastructure, jobs and local economic growth are all key to creating thriving communities where people want to live.’[1]

[1] http://www.propertyreporter.co.uk/finance/bank-of-mum-and-dad-to-fund-23bn-of-rental-payments-in-2017.html

London’s Buy-to-Let Pain Becoming Manchester’s Gain, Expert Insists

Published On: August 23, 2017 at 9:18 am

Author: Em Morley

Categories: Landlord News

Tags: buy-to-let sector,London,Manchester,property investment

As London’s buy-to-let and property markets begin to dampen, it seems to be Manchester that’s emerging as the winner for investment.

That’s the opinion of one property expert, who notes that uncertainty has been the order of the day in the buy-to-let market for the past year, at the hands of the Government.

London’s Buy-to-Let Pain Becoming Manchester’s Gain, Expert Insists

2016’s shock Brexit vote, followed by a hung Parliament this year, combined with Stamp Duty hikes, the reduction in mortgage interest tax relief, and imminent introduction of tougher lending criteria for portfolio landlords has created an aura of uncertainty and caution in the buy-to-let market.

Surprisingly, the ever-shining star of London even seems to be fading, with house prices down by an average of 0.6%, while private rent prices sit behind the national 12-month growth rate.

So, have the past 12 months permanently dampened the appeal of the UK’s buy-to-let sector? Should buyers be investing their funds elsewhere? Critics are divided.

Jean Liggett, the CEO of Properties of the World, gives her thoughts: “The uncertainty that the UK buy-to-let market has experienced over the past year has undeniably impacted investor confidence, but it seems to be primarily aimed at London.

“With interest rates remaining so low, investors still see the merit in purchasing bricks and mortar, but those seeking maximum returns in 2017 are increasingly looking at other areas than the capital.”

She believes: “By keeping an eye on regeneration plans and new transport links, it is still possible to find great areas to invest in.”

Indeed, despite splutters in the London buy-to-let market, buoyant activity is still being witnessed in other parts of the UK.

Greater Manchester has become a key destination for property investors and, thanks to its high demand from buyers and tenants alike, the city continues to register a strong house price growth rate of 6.7%.

Liggett adds: “As we have seen the capital’s market decline, other UK cities have stepped up and taken its place. London’s buy-to-let pain has become Manchester’s gain!”

Due to its proximity to both MediaCityUK and Manchester city centre, Salford Quays in particular is leading the way when it comes to buy-to-let growth.

2017 marks ten years since major transformation began in the area, kick-started by the BBC’s decision to move many of its jobs from London to Salford Quays. This £650m regeneration project has boosted the area’s credentials for buy-to-let investment, while Manchester has ascended to one of the top ten buy-to-let locations in the UK.

The latest Land Registry data paints a positive picture for Salford, with an average 5.9% increase in house prices over the past year.

Meanwhile, savvy investors will be watching with glee as news of more top class office space being snapped up is announced, suggesting a thriving local economy and growing rental housing demand.

It looks like Manchester is the place to be! Will you move investment there?

New survey suggests landlords remain confident in the sector

Published On: August 11, 2017 at 8:51 am

Author: Em Morley

Categories: Landlord News

Tags: Buy-to-Let,landlords,landlords confidence,tenants

The Government’s implementation of a number of regulation changes aimed at curbing the rise of private landlords has left many concerned that buy-to-let investment could fizzle out.

As a result of the changes, the number of people investing in the sector has slipped over recent months, with experts forecasting that more landlords will exist the market in the near future.

Confidence

Despite the tax assault on the private rental sector, the fact remains that bricks and mortar provide a safe long-term investment for savvy landlords.

A new survey of 500 buy-to-let landlords from Knight Knox reveals that 59% are still confident in renting out buy-to-let property. Surprisingly, only 11% said they had lost confidence in buy-to-let, while 30% are unsure.

In addition, half of respondents to the survey said that they intend on adding to their portfolio in the next five years.

New survey suggests landlords remain confident in the sector

Andy Phillips, Commercial Director at Knight Knox, noted: ‘The results of our survey would suggest that, despite ostensibly damaging changes to the market over the last few years, landlords remain positive about the returns this asset class can generate. Bricks and mortar is likely to remain one of the most stable investment options and has so far weathered the changes brought in by new legislation.’

‘Close to six million properties in the UK are now in the private rented sector, with this expected to rise to 7.2 million by 2025, which is the equivalent of a quarter of all homes. With this sort of opportunity, and with property prices continuing to rise, investors could potentially benefit from both regular rental income over the years and capital appreciation when the time comes to sell.’[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2017/8/landlords-remain-positive-about-buy-to-let-market

More people coming to rely on private rental sector

Published On: August 10, 2017 at 8:52 am

Author: Em Morley

Categories: Property News

Tags: Buy-to-Let,Generation Rent,government,renters,tenants

A new investigation has revealed that a generation could be priced out of the housing market, with homeownership levels set to slide further out of reach for younger people.

The survey of 2,000 UK adults from LetBritain indicates that 39% of UK adults lack the sufficient finances required in order to obtain the type of property that they currently want. As a result, they are forced into the rental market.

For those in London, this figure rises to 49%.

Generation Rent

The majority of renters questioned said that they blame the Government for not showing enough support to their efforts to get onto the property ladder. 61% said they felt the Government wasn’t doing enough to support Generation Rent, with 64% saying that they feel life will get worse for renters during the next five years.

In order to combat this, 27% of tenants said that they have plans to invest in the buy-to-let sector, by investing in a cheaper property in an alternative location from where they wish to live.

This was particularly common amongst Londoners, with 42% of people in the capital stating they would buy a property in another part of the UK, in order to benefit from another rental income.

More people coming to rely on private rental sector

Reliance

Fareed Nabir, CEO of LetBritain, observed: ‘With more and more people across the UK coming to rely on the private rental sector, the results of the research are concerning. Whilst many renters are working hard to enter the property market, they clearly do not feel the government understands the issues faced by tenants.’

‘Interestingly, the findings show that Generation Rent is now increasingly looking to buy properties outside of their chosen place of residence so they can still get onto the property ladder without having to sacrifice the location or quality of the property they wish to live in,’ Nabir added.[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2017/8/a-growing-number-of-people-are-coming-to-rely-on-the-private-rental-sector

Leeds Building Society Reveals its Buy-to-Let Portfolio Plans

Published On: August 8, 2017 at 8:56 am

Author: Em Morley

Categories: Finance News

Tags: finance,mortgages,portfolio landlords,Prudential Regulation Authority

Leeds Building Society is the latest lender to reveal its buy-to-let portfolio plans ahead of next month’s lending rule changes.

From 30^th September 2017, the building society will expect landlords with four or more buy-to-let properties (portfolio landlords) to provide details of assets and liabilities, and declare future investment property intentions.

Leeds Building Society Reveals its Buy-to-Let Portfolio Plans

Additional information, such as cashflow, will only be required in more complex cases.

Leeds will also increase its maximum portfolio size from eight to ten, as well as raise the maximum number of holiday lets permitted to a third (33%).

However, the building society will not alter its core criteria of loan-to-value (LTV), maximum loan size, interest coverage ratio or stress tests.

The Director of Product and Distribution at Leeds Building Society, Jaedon Green, says: “We’re committed to supporting landlords and the buy-to-let market, so will continue to accept mortgage applications from portfolio landlords after 30^th September.

“We’ve also increased the maximum number of holiday lets by 33%, which provides intermediaries with greater flexibility to mix and match, using the Leeds Building Society for up to four properties, whether buy-to-let, holiday let or a mixture.”

Under the Prudential Regulation Authority’s (PRA) buy-to-let portfolio plans, lenders will be required to conduct more in-depth portfolio and affordability assessments on investors.

Both Paragon and Aldermore have already revealed their stance on the buy-to-let portfolio plans.

Last week, Leeds Building Society reduced rates on its fixed rate buy-to-let deals by up to 0.25%.

New products include a 2.09% two-year fixed rate deal for purchase only, at up to 70% LTV, and a two-year fix for remortgage only, available at up to 60% LTV.

The products come with a 1% discount for three years following the end of their terms and a £999 completion fee.

Remortgage customers have the option of fees-assisted legal services or £250 cashback.

Green comments: “We’ve made reductions across our range of two and five-year fixed rate deals for buy-to-let borrowers.

“In addition to the reduced rates, we offer different fee and incentive combinations across the range, including cashback, as part of our ongoing efforts to improve our buy-to-let proposition.”

He adds: “Earlier changes we’ve made, such as simplifying criteria and removing the minimum income requirement, have been well-received by brokers. We continue to work closely with our intermediary partners to better meet their needs, and those of their clients, in this important sector.”

Will you be affected by the buy-to-let portfolio plans?