Posts with tag: buy-to-let landlords

Tenants could pay more if told they can decorate

Published On: November 18, 2015 at 10:23 am

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Tenants could be willing to pay more if they are allowed to decorate their rental accommodation, according to a new report.

Research from insurance provider Endsleigh found that on average, tenants would be happy to fork out an extra £149.52 a year, if landlords gave them the green light to personalise their home.

Increased revenue

At present, two million landlords let out five million homes in Britain. Endsleigh calculates that there is potentially an extra £530m in revenue to be had for landlords who promote the fact they are happy for tenants to decorate their property.

43% of tenants were found to be willing to pay more rent, with only 29% of those surveyed saying they had the freedom to decorate their home. It also showed that 20% said they would be very reluctant to invite friends or relatives into their property due to being embarrassed about the décor.

19% expressed a desire to paint the walls the colour of their choice, while 17% wanted to hang pictures or mirrors up. 10% said they wished to put wallpaper up in their rental property. In addition, the research revealed that 9% of tenants questioned wish to use blu-tack to put things up, with another 9% wishing to mount a television onto the wall.

Tenants could pay more if told they can decorate

Tenants could pay more if told they can decorate

Reluctance

However, many tenants are reluctant to ask their landlord for permission to go ahead with interior alterations. Just 28% said that they would ask for the go ahead to decorate. Encouragingly, of those that did ask, 76% said that their landlord agreed to the request, despite it going against the terms of their tenancy agreement.

David Hadden, manager for landlords and lettings at Endsleigh, noted, ‘with it being so difficult to get on to the property ladder, people are now renting for longer, so naturally they are going to want to decorate the property they are living in long term.’[1]

‘Landlords who allow tenants to personalise their property could be favoured over those who don’t and may be able to command a higher rental price. If tenants feel at home in their property they may also have longer tenancies,’ he added.[1]

[1] http://www.propertywire.com/news/europe/uk-tenants-landlords-decor-2015111811218.html

 

 

Properties in South sell more often

Published On: November 16, 2015 at 12:50 pm

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Properties in London, the South East and South West of England sell more often than those in other regions of the country, according to new research.

A report from conveyancing services firm My Home Move shows that properties are held by the same owner for just 16 years in the South East and for 17 years in London and the South West. In contrast, homeowners in the North East keep their properties for the longest, with homes changing hands every 22 years on average.

Turnover

The investigation states that, ‘a higher rate of property, ‘turnover’ between owners is an indication of a healthy housing market. My Home Move’s chief executive officer Doug Crawford, noted, ‘homes in healthy property markets change hands often, as people move up the housing ladder or move to new areas for jobs or a change of lifestyle. Our research reveals that the stronger job market and higher incomes in the South mean that people buy and sell home more often than in the North.’[1]

‘Interestingly, it’s not just the South East that has a relatively healthy number of homes changing hands as the West Country is also thriving. Regional towns like Exeter, Bath and Bristol have vibrant housing markets and the region as a whole also benefits from people moving there from other parts of England for a slice of the good life,’ Crawford continued.[1]

Properties in South sell more often

Properties in South sell more often

Time lapse

In addition, the research found that the amount of time taken between house sales has dropped significantly over the past five years, down by 24% across England as a whole from once every 25 years to once every 19 years.

The largest change was recorded in the Yorkshire and Humberside region, which saw the average time between sales drop from once every 28 years to once every 19 years. This was followed by the East Midlands, where average time fell from 25 to 18 years.

Mr Crawford thinks that it is reassuring to see that homes are changing hands on a more common basis than 5 years ago. He feels that, ‘this has been a period of economic growth and the house market has been improving hand in hand with the economy. The combination of low inflation, reduced unemployment and improving wages means that people feel confident in their prospects and are more enthusiastic about moving to a new home.’[1]

‘At the same time, improving mortgage availability and low interest costs have made it easier for consumers to finance a home purchase. With interest rates set to stay low for longer, according to the latest Bank of England predictions, the next 12 months could see a further improvement in the housing market across the country,’ he concluded.[1]

[1] http://www.propertywire.com/news/europe/uk-home-sales-research-2015111611207.html

 

 

 

Are you ready for Right to Rent?

Published On: November 13, 2015 at 12:44 pm

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Categories: Landlord News

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Last month, MP’s decided to back the controversial ‘Right to Rent’ legislation as part of the second reading of the Immigration Bill in Parliament. This means that the scheme is moving ever closer to being rolled out across the whole of England, following a prolonged trial period in the West Midlands.

Concerns

However, this trial has uncovered some serious issues for tenants and landlords alike. Research from the pilot scheme shows that some landlords were guilty of discriminating against some tenants purely on the basis of their background. Others were said to turn away some would-be tenants purely because they had a foreign accent.

An investigation conducted by The Joint Council for the Welfare of Immigrants of tenants and landlords in the trial area also found that some tenants were being charged an extra £100 in administration costs. What’s more, some landlords were found to be reluctant to offer viewings to potential tenants who would need more time to provide paperwork, suggesting many migrants could be turned down.

Tips

In light of these problems, buy-to-let landlords should follow these helpful tips in order to be confident and vigilant in conducting Right to Rent checks:

  • Establish who will be living in the property

Landlords should consider if the number of occupiers looking to rent is reasonable for the size, type and condition of the property. All enquiries and responses should be recorded

  • Source original versions of documentation

All agents and landlords should obtain original copies of documentation required that proves a potential tenants’ immigration status. These include passports, visas and national identity cards. Checks must be made up to 28 days before a tenancy agreement can be started.

  • Check in the presence of the holder

It is important that landlord conduct validity checks in the presence of the potential tenant(s). Landlords or agents must be sure that the documents belong to the person(s) in question and pay attention to information such as DOB’s, to ensure they are consistent throughout all documentation.

Are you ready for Right to Rent?

Are you ready for Right to Rent?

  • Make copies and date them

Documents should be copied and retain with the date that they were checked. Copies should be made in a manner in which they cannot be edited at a later date. These in turn should be securely retained, either electronically or by hard copy.

  • Conduct follow-up checks on time

These should be carried out in the same manner as initial checks. If someone is found to no longer have the Right to Rent, the owner does not need to evict. Instead, they should inform the Home Office by phone or email.

  • Get help with proof

If a potential tenant cannot prove their immigration status because of ongoing issues, agents or landlords can request a check from the Home Office. An answer will be sent within two working days.

  • Remember that some properties are excluded

Tied accommodation, local authority tenants and leases of seven years or more are excluded from the checks. In addition, students nominated by a higher educational institution are also exempt.

Hard  

Jane Morris, Managing Director of PropertyLetByUs.com, said, ‘the research shows that some legitimate tenants who cannot easily identify themselves using a British or EU passport are finding it harder to secure somewhere to live.’[1]

‘Under the pilot scheme, would-be tenants have to produce evidence from a checklist of documents that they have permission to be in the UK and landlords have to take a copy for their records. Before dismissing a prospective tenant, it is important that landlords make all the necessary checks.  The legislation requires landlords to carry out extensive checks to ensure a tenant has British, EEA or Swiss nationality.  If the prospective tenant is of a different nationality, their visa or passport will have to be checked to see if they have a right to rent. Landlords are also required to notify the home office if the tenant’s visa expires,’ she added.[2]

[1] http://www.propertyreporter.co.uk/landlords/top-tips-for-landlords-on-conducting-right-to-rent-checks.html

 

 

 

Rent arrears and repossession fall in Q3

Published On: November 12, 2015 at 12:48 pm

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Encouraging data released by the Council of Mortgage Lenders has shown that there has been a continual drop in rent arrears and repossessions during the third quarter of 2015.

In fact, the quarterly repossession and arrears rates are at the lowest since the Council of Mortgage Lenders quarterly records began and are sure to boost landlords.

Fall

There were 2,500 properties taken into possession during the third quarter of the year, roughly the same number as in the second. However, this was 50% down on the third quarter of 2014.

At the end of September, there were 104,600 loans with arrears representing over 2.5% of the mortgage balance. This was 14% lower than at the same period in 2014 and almost 2% lower than the second quarter of this year.

The total number of loans in all arrears bands was down, with the exception of the most serious band of 10% or more. In this category, the number rose slightly from the last quarter, rising to 23,700 from 23,300. However, this was still 7% lower than the 25,400 noted at the end of September last year.

Rent arrears and repossession fall in Q3

Rent arrears and repossession fall in Q3

Stable

Council of Mortgage Lenders director general Paul Smee said, ‘supported by low interest rates and an improving jobs market, mortgage arrears continue to fall and repossessions are stable. Lenders are committed to working with borrowers to resolve their financial difficulties rather than take possession wherever this is realistic.’[1]

‘Looking ahead, there is possibly a risk that people will postpone thinking about the prospect of higher payments as the timing of rate rises continues to stretch beyond previous expectations. But we would urge all borrowers to plan ahead, as prevention is better than cure,’ he added.[2]

[1] http://www.propertyreporter.co.uk/property/mortgage-arrears-continue-to-tumble-in-q3.html

 

 

 

Mortgage Lending rises in Q3 of 2015

Published On: November 11, 2015 at 12:20 pm

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Mortgage lending is rising and is in the middle of an, ‘upward trajectory,’ according to the latest report from the Council of Mortgage Lenders.

After a slow start to 2015, lending to first-time buyers and home movers increased during the third quarter of the year, in comparison to the second. In addition, there was also an annual rise from the same period twelve months ago.

Low rates

A lot of borrowers are seeing the benefits of low costs, due to the continuing record low in the Bank Rate. Mark Harris, chief executive of mortgage broker SPF Private Clients, said that,’ with summer out of the way, lenders have an eye on year-end targets and with the Bank of England hinting that interest rates might not rise next year, there are some very competitive deals to tempt borrowers.’[1]

The Council of Mortgage Lenders stated that gross mortgage lending amounted to £61.4bn during the third quarter of 2015. This was a rise of 18% on the previous quarter and a 12% rise on the same period in 2014.

In addition, the value of homeowner loans for property purchases made up 57% of gross lending. Remortgage activity made up 24%, with buy-to-let accounting for 18%.

Pick up

‘After a slight lull in August, monthly mortgage lending picked back up in September,’ said Brian Murphy, Head of Lending at the Mortgage Advice Bureau. ‘Lending is now at similar levels to those seen in June and July, which represented a post-recession high. Remortgage lending had a significant role to play in this growth, with both the volume and value of remortgage loans up substantially month-on-month. In contrast, the value of loans for house purchases saw a slight decline while the volume remained static,’ he continued.[2]

Mortgage Lending rises in Q3 of 2015

Mortgage Lending rises in Q3 of 2015

Paul Smee, Director General of the Council of Mortgage Lenders, also noted that, ‘the market was a slow starter this year, but this quarter shows it is now firmly on an upward trajectory. With competitive rates and high levels of product choice currently available, alongside generally improving economic conditions, we expect this to continue as we head into the new year.’[2]

‘Buy-to-let continues its growth this period, but at 18% of new lending in September remains the fourth largest lending type behind first-time buyers, home movers and remortgage. There were five times as many house purchase loans to home-owners as buy-to-let landlords in September, and the growth in buy-to-let lending largely continues to reflect its more belated recovery from recession,’ he concluded.[2]

Buy-to-let increases

Andrew Turner, director at Commercial Trust, echoed the positive sentiment surrounding buy-to-let lending. Turner said, ‘It is positive to learn that during September, gross lending of buy-to-let, buy-to-let house purchasing and buy-to-let mortgaging have all seen strong increases from the same time the previous year, indicating favourable lending conditions across all tenures.’

‘It is clear that buy-to-let is continuing to show real improvement, growing far more quickly than any other type of lending and continuing its trend of being the strongest UK mortgage market in the years since the recession. Though the bulk  of both gross activity and yearly growth was remortgage loans, property purchase loans have also seen a more than modest climb – despite the continuously changing legislative environment in which landlords operate and the threat of increased buy to let regulation, both from pan-European legislation and the Bank of England itself.’[2]

Turner concluded by warning against a return to previous lending conditions. He noted that, ‘if the past few years have shown us anything, it is that buy-to-let has been the biggest driver of the housing market recovery and instrumental in servicing the housing needs of the UK. Whilst it is crucial that we do not return to the risky lending conditions seen prior to the recession, it is equally crucial that we do not stifle landlords’ ability to continue to invest and provide homes we desperately need.’[2]

[1] http://www.bbc.co.uk/news/business-34786105

[2] http://www.propertyreporter.co.uk/finance/18-rise-in-lending-sees-market-moving-in-right-direction.html

 

Estate Agents Urged to Stick with Buy-to-Let

Published On: November 3, 2015 at 12:08 pm

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Estate Agents Urged to Stick with Buy-to-Let

Estate Agents Urged to Stick with Buy-to-Let

Some estate agents have started avoiding buy-to-let property sales due to recent Government clampdowns on the sector. However, one expert believes that agencies risk missing our on their share of £1.5 billion of fee income.

Martin Wilkinson, the founder of property investment portal Buy2Let.com, says that despite recent proposals for tax relief cuts and mortgage restrictions, the sector still provides a healthy stream of income for estate agents.

He reports that about 70% of buy-to-let investments are cash purchases, so will not be affected by mortgage accessibility changes. He also found that the sector generates around £100 billion worth of transactions every year, producing typical fee income of £1.5 billion each year – “that’s the equivalent of £60,000 for every agency branch,” Wilkinson states.

He continues: “We know that some agents and investors have been put off buy-to-let by these recent changes, but for many landlords, it’s business as usual. A buoyant rental market is producing some fantastic yields, and rising property prices mean that investors continue to build up equity too, in addition to their rental income.

“There are actually very few asset classes, including bonds or annuities, which offer the same levels of returns as a buy-to-let portfolio, so the sector will continue to attract savvy cash investors who are looking for long-term investments with decent returns.”1

What are your plans for your buy-to-let business in the future? And are these affected by the Government’s proposals?

1 https://www.lettingagenttoday.co.uk/breaking-news/2015/11/estate-agents-urged-not-to-be-deterred-from-seeking-buy-to-let-instructions