Posts with tag: buy to let investors

Letting agent refutes one in four tax quit claim

Published On: November 18, 2016 at 2:57 pm

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This week saw a concerning report stating that up to 25% of buy-to-let investors could be driven from the sector, as a result of existing and proposed tax changes.

However, a leading letting agent has moved to quash this prediction from the Residential Landlords Association.

Misleading

Ajay Jagota, head of North East lettings and sales firm KIS, feels the data is misleading and incomplete. He argues that it does not take into account regional variations.

Mr Jagota said: ‘I’m not disputing that these tax changes will affect landlords and that the ultimate losers will in all likelihood be the tenants whose rents go up to cover those costs – but this poll is less accurate than the polls which missed Brexit and the election of Trump.’[1]

‘We work with a similar amount of landlords to the total number who took part in the survey, and not one of them has even hinted to me at any point this entire year that they are thinking of selling up. Other major agents I’ve spoken to have said the same thing. So where are these one in four landlords who are packing in?’[1]

Letting agent refutes one in four quit claim

Letting agent refutes one in four quit claim

‘Self-selecting’

Continuing, Jagota said that the survey reflects, ‘1,000 probably self-selecting landlords,’ who in reality do not show the thoughts of the majority of investors.

‘There’s a wider issue here that some eye-catching headline figures are once again failing to accurately reflect reality on the ground. It happened in the 2015 election, it happened in the EU referendum, it happened in the US presidential election – but it also happens in housing,’ Jagota noted.[1]

Concluding, he said: ‘As a local agent you know the micro details about community you serve which will be missed by – even the Office of National Statistics would miss. You can even see when an individual street is on the up. But you are then told that statistics show how things are entirely different from what you’ve seen with your own eyes.’[1]

[1] https://www.lettingagenttoday.co.uk/breaking-news/2016/11/letting-agent-rips-into-landlord-survey-of-buy-to-let-quitters

 

Conveyancing Comparison Service for Buy-to-Let Investors

Published On: November 16, 2016 at 11:50 am

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When an investor finds that ideal investment, they have probably spent hours searching and viewing many properties, together with visiting several management agents to fully understand what financial returns they can expect after all the costs of getting the property upgraded to a safe standard. They focus on net yield.

Impartial conveyancers

Duncan Pattinson knows all about buy-to-let investment, as he used to be MD of a large buy-to-let business. He realised that what buy-to-let investors needed was a conveyancing comparison and solicitor-finder service. So many property developers and sellers of stock were stipluating that the investor had to use their nominated solicitor – hardly impartial!

Conveyancing Comparison Service for Buy-to-Let Investors

Conveyancing Comparison Service for Buy-to-Let Investors

We Help You Too Ltd manages the Homebuyer Conveyancing panel, a panel that has grown over the past three years. Some 120-plus conveyancing solicitors are members, with additional solicitors joining each week.

Online conveyancing quotes

Buy-to-let investors can budget for their conveyancing costs by going online to the Homebuyer Conveyancing comparison website: http://www.homebuyerconveyancing.com. They can view and compare conveyancing quotes in just one search, without entering any personal details. They can filter their search by price, location and by mortgage lender. When ready, they can take a conveyancing quote away and book a timed call from their chosen conveyancing solicitor or licensed conveyancer to discuss their quote – straightforward, efficient and without obligation to instruct.

The conveyancing quotes fully detail their conveyancing fees and disbursements costs, and detail any applicable Stamp Duty Land Tax due to the investor buying an additional property.

Where experience matters

What is special about this particular service is that each purchase quote uses a comprehensive search pack that is under £200 and covers England and Wales. This enables investors to compare conveyancing quotes with no hidden fees or costs. They can even choose an option to add Exchange Insurance within their conveyancing quotes. If the investor is buying a new build, then a new build search pack is used, which is considerably cheaper. The savings are simply passed on to the investor.

The solicitors order the search pack from Onesearch Direct. Where Experience Matters is its strap-line. It also has a suite of other searches that can fast-track the search process if required.

Customer charter

It pays to compare competitive national conveyancing quotes from a conveyancing panel that is focused on the customer. Cheaper pricing is due to where the solicitor is located and is not a reflection of service. Each Homebuyer Conveyancing member is signed up to a customer charter.

Improving the conveyancing process

Duncan has a backgroung in improving process and, as such, this determination is self-evident, with a few additional improvements coming soon. The software and panel provides the much needed hands-off service that a buy-to-let investor needs when finding an independent solicitor at a price they can afford.

We Help You Too Ltd manages the Homebuyer Conveyancing panel.

Turning the complex into the understandable

Where in London can you achieve the best yields?

Published On: November 2, 2016 at 11:39 am

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An investigation from Simply Business has indicated that more than 70% of buy-to-let investors prioritise rents over capital gains when making purchase decisions.

Taking this into account, London based residential agent Portico has revealed which capital locations command the greatest rental yields.

Capital rental gains

The agent’s Interactive Yield Map has shown that the top-ten areas in London for highest rental yields are:

  • Elm Park, Havering-Highest yield 8.5%

London’s greatest yield can be found in Elm Park in the east London borough of Havering. With rents increasing in the capital, a number of people are moving out of the city to the outskirts, in search of more affordable places to stay. Havering has seen a double-digit growth in the last year.

  • Chadwell Heath, Barking & Dagenham –Highest yield 8%

Again in East London, Chadwell Heath offers a very good yield and prospects of growth. What’s more, it shares the honour of the only place alongside Havering to achieve double-digit growth in the last year.

The Crossrail will be ready for arrival at Chadwell Heath railway station in May 2017, driving a number of commuters to the region.

  • Creekmouth, Barking & Dagenham-Highest Yield 6.8%

Despite being an industrial region, a yield of 6.8% is certainly not to be sniffed at. Creekmouth attracts tenants searching for convenience and value for money, despite not having its own Tube.

  • Little Heath, Redbridge-Highest yield 6.6%

This region is not far away from Chadwell Heath and is attractive to renters looking for great schools, greenery and period housing. In addition, the Crossrail will also increase Little Heath’s desirability.

Where in London can you achieve the best yields?

Where in London can you achieve the best yields?

  • Yarnton Way, Abbey Wood-Highest yield 6.6%

The Crossrail scheme has led to regeneration work in Abbey Wood, which is scheduled for arrival in 2018. Savvy investors are already purchasing in the area.

  • Barking-Highest Yield 6.5% 

Barking has been in the public eye since the 2012 London Olympics, where it was host borough. A number of projects have served to renovate the area since then, including building shops, homes and leisure facilities.

  • Cranbrook, Ilford-Highest Yield 6.1%

Ilford is set to become another region to highly benefit from the Crossrail scheme, when it appears on the Tube map next year. Homebuyers and investors will be attracted to a quick commute into the city, alongside cheaper prices.

  • East Ham-Highest Yield 6.1% 

East Ham has benefitted hugely from the investment in the Olympics. It is a very popular location for first-time buyers with a strict budget. Now, it is attracting a number of tenants, due to its good transport links and bustling high street.

  • Romford-Highest Yield 5.9%

Property values in Romford have risen sharply in recent years, but the region remains affordable compared to the rest of London. As such, it is still a popular location for investors and tenants.

     Chigwell-Highest Yield-5.8% 

Chigwell now benefits from the Night Tube, attracting a number of young professionals to the area. Landlords and investors can expect yields to remain strong and even grow in the long-term.

 

 

 

 

 

 

 

 

 

Buy-to-Let Remains an Attractive Investment Opportunity, Insists Together

Published On: October 24, 2016 at 10:13 am

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Buy-to-let property remains an attractive investment opportunity at a time of low savings rates and stock market volatility, insists specialist lender Together.

Buy-to-Let Remains an Attractive Investment Opportunity, Insists Together

Buy-to-Let Remains an Attractive Investment Opportunity, Insists Together

Despite a Government crackdown on buy-to-let landlords, including the 3% Stamp Duty surcharge on additional properties, the abolition of the automatic 10% Wear and Tear Allowance, and the forthcoming reduction in mortgage interest tax relief, Together reports that investors continue to be drawn to the buy-to-let market, as the returns regularly outperform those of other investments.

The firm’s Commercial CEO, Marc Goldberg, explains: “Buy-to-let has proved to be a resilient sector this year, despite the tax changes introduced by the Government.

“Buy-to-let lending continues to perform well for us here at Together, and we’ve been able to grow whilst maintaining a high quality customer base. Given this growth, we want to ensure that we offer a variety of products to meet the continued demand.”

Together has recently introduced a new five-year, fixed rate buy-to-let mortgage to meet the demand from this growing market, with the maximum loan size increased to £500,000, while offering landlords the opportunity to fix their costs.

Goldberg comments: “Our new fixed rate product, as well as bigger loan sizes, will help us deliver more funding to property investors through our network of broker partners.

“We offer both interest-only and repayment options, with loan-to-values of up to 75%, and we’ll accept projected rental incomes, so landlords don’t need to have a tenancy already in place to secure the funding needed.”

He adds: “We also lend to limited companies and have seen an increase in applications from limited companies for buy-to-let funding as a result of the various tax hikes.”

Under the forthcoming changes to mortgage interest tax relief, limited company landlords will not be affected; only individual investors will face a reduction in the amount of mortgage interest that they can offset against tax. The Government has a guide on how the cut will work: /government-guide-tax-relief-changes-residential-landlords/

Together recently announced record trading results, with annual new lending for the year to 30th June 2016 surpassing £1 billion for the first time in the firm’s 42-year history. Its current loan book exceeds £1.8 billion.

Buy-to-Let Investors Return to the Property Market

Published On: October 12, 2016 at 10:29 am

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Number of UK buy-to-let businesses increases 2.1%

Buy-to-let investors have returned to the property market, following the post-Stamp Duty deadline lull in April, according to Rightmove.

The property portal’s Rental Trends Tracker for the third quarter (Q3) of the year found that buyer enquiries from potential landlords and buy-to-let investors were up by 30% on May, following a short-

Buy-to-Let Investors Return to the Property Market

Buy-to-Let Investors Return to the Property Market

term dip after the 3% Stamp Duty surcharge for second homes was introduced on 1st April.

New rental listings on Rightmove were 6% higher in Q3 than the same period of 2015, found the report.

In addition, the research revealed that the average rent is up by 0.5% on a quarterly basis, and 3.2% on the year, to stand at £779 per month. This is down from quarterly growth of 2.7% and a yearly rise of 4.1% in Q2.

Rents continue to drop in London, by 0.7% on Q2 and 1.5% annually, to an average of £1,885 a month.

The most in-demand area outside of London for rental properties was Ashton-Under-Lyne in Greater Manchester, where the average rent on a two-bedroom property was £524 per month. This was followed by Wellingborough in Northamptonshire, where the typical rent stands at £660.

Rightmove also analysed the returns that landlords making last-minute purchases before 1st April would have received, by looking at capital price growth and average rent prices since the Stamp Duty changes.

The best returns for buy-to-let investors were found in Southend, Essex, where house prices rose from £187,515 in Q1 to £210,353 in Q3, and the average rent was £4,816, giving a total return on investment of 14.7%.

In London, the highest returns were found in East Croydon (13.8%) and Greenford (13.4%).

The Head of Lettings at Rightmove, Sam Mitchell, comments: “Investor activity has bounced back following the Stamp Duty changes, though some agents report that many investors are looking to knock sellers down on their asking prices to make up for the additional Stamp Duty they now need to pay.”

She adds: “New rental supply has held up, despite concerns that the Stamp Duty changes would lead to less fresh stock.”

Have you purchased a buy-to-let property since the Stamp Duty change was introduced?

Britain’s Biggest Landlord Sells Half of His Buy-to-Let Portfolio

Published On: September 14, 2016 at 8:31 am

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Britain’s biggest landlord has sold around half of his buy-to-let portfolio in the past year, claiming that the age of the amateur landlord is coming to its end.

The Financial Times reports that Fergus Wilson and his wife Judith, who are both former maths teachers, have sold about 400 of their 900 buy-to-let properties in Kent, with most sold to overseas buyers and around 50 to their tenants.

When the buy-to-let mortgage launched in the mid-1990s, the Wilsons were able to expand their portfolio, as high loan-to-value (LTV), interest-only loans were incredibly easy to acquire.

Britain's Biggest Landlord Sells Half of His Buy-to-Let Portfolio

Britain’s Biggest Landlord Sells Half of His Buy-to-Let Portfolio

However, the notorious property investor believes the age of the amateur landlord is “over”, as lending criteria has become tougher.

“If you were an amateur landlord in those days, as long as you could spell your name, you would get a mortgage,” he explains. “No one appeared to check anything. I wouldn’t say it is impossible, but it is much tougher. Some [banks] are offering LTV of only 60%.”

He adds: “Is it the wrong time to be an amateur landlord? Yes. Some people will succeed, but on the whole, too many amateurs walk into pitfalls… The day of the amateur landlord is over.”

Over the past few months, a number of banks have tightened their buy-to-let lending criteria.

OneSavings Bank, for example, has put its focus on professional buy-to-let investors following the Brexit vote, as they are “better positioned to withstand market volatility”. The Kent-based bank has also tightened conditions for smaller landlords.

Ray Boulger, of mortgage broker John Charcol, agrees that it has become much harder for amateur landlords to operate, following changes to the tax system and regulations.

He comments: “For lower yielding parts of the country with higher prices, like London and the South East, it will become impossible to get a high LTV mortgage, unless properties are put into a limited company. LTV will be limited to about 55-60%. New landlords will have to save a bigger deposit.”

Mr. Wilson, 68, who announced his plans to sell his £250m buy-to-let portfolio in 2015, says he is still waiting for a number of sales to complete.

Last year, he revealed that he needed to repay around £45m to 14 lenders, but he hopes to emerge with a £200m profit.

Wilson believes that June’s Brexit vote will ultimately boost the selling process: “I think foreign buyers are saying at the moment that Brexit helps, as it is cheaper [to buy UK property] in their money [following the fall in sterling]. Many are trophy hunters – they want to impress their friends with a photo of the house they own in Britain.”

Additionally, he claims that UK house prices will be supported by the shortage of housing in the long term: “All the time there is a shortage of houses, the prices will continue to go up. It is impossible for the developers to deliver the number of houses required for the next 15 years.”

However, the latest official house price figures show that the property market has cooled over recent months: /property-market-cools-wont-crash-claim-experts/