Posts with tag: buy-to-let landlords

Buy-to-let rates set to increase in 2017

Published On: January 25, 2017 at 10:10 am

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A leading mortgage expert has predicted that an increase in swap rates is likely to be passed on to buy-to-let landlords during 2017.

This was despite buy-to-let mortgage rates being largely unaffected by a significant increase in rates during the final quarter of 2016.

Bank Rate Lows

The Q4 results of Mortgages for Business’ Buy-to-Let Mortgage Costs Index showed that while swap rates rose, the record low Bank Rate of 0.25% saw buy-to-let mortgage headline rates largely unchanged.

David Whittaker, chief executive of Mortgages for Business, feels that lenders will be left with no choice but to introduce higher rates. This, he feels, would be particularly prominent for buy-to-let landlords who have chosen to incorporate.

Mr Whittaker said: ‘With demand in the buy-to-let sector already under pressure from both fiscal and regulatory changes, it is good to see that lenders have not further burdened landlords by increasing interest rates.’[1]

‘However, with rising swap rates this situation cannot continue forever and we would expect to see increases at some point in 2017 as lenders factor in the additional time spent on deeper background checks and assessing affordability, particularly from landlords borrowing in a limited company capacity,’ he added.[1]

Buy-to-let rates set to increase in 2017

Buy-to-let rates set to increase in 2017

Vigilant

Continuing, Whittaker observed: ‘Whether increases happen before 1st October when lenders will be obliged to be extra vigilant while assessing applications from portfolio landlords remains to be seen, but we will be watching the market closely in this respect.’[1]

Percentage-based fees products accounted for 41% of buy-to-let mortgages in Q4. Fee-free products also gained in market share, making up 16% overall.

Products with flat fees fell for the third successive quarter. Their average price is now £1,397, in comparison to £1,556 at the start of 2016.

[1] https://www.landlordtoday.co.uk/breaking-news/2017/1/buy-to-let-rates-set-to-rise

 

Buy-to-let market sees strong start to 2017

Published On: January 20, 2017 at 9:58 am

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Categories: Landlord News

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It is widely acknowledged that 2016 was not the best for buy-to-let landlords, The raft of changes impacting on the sector, including the additional Stamp Duty surcharge and Right to Rent, saw many investors deterred from purchasing more properties.

However, 2017 seems to have started more positively, with more landlords looking to add to their property portfolios.

Surge

The latest mortgage lending figures from Fleet Mortgages indicate that there has been a surge in demand from buy-to-let landlords trying to add to their existing properties. There were 21,000 buy-to-let loans issued during November, up 13% on October, with this trend expected to continue.

Bob Young, chief executive of Fleet Mortgages, said: ‘Overall, the market has kicked off strongly at the start of 2017 and we’ve seen a considerable amount of demand and interest from advisors on behalf of buy-to-let investors.’[1]

‘We’ve seen over the course of the last 12 months the increase in demand for limited company products, particularly when it comes to new purchases, however many landlord borrowers continue to hold their existing properties in their individual names and it’s therefore important that we continue to offer competitive products in this space,’ he continued.[1]

Demand

In order to meet growing demand, Fleet Mortgages has moved to launch five products across both its individual and limited company buy-to-let ranges.

For limited companies, the lender has launched an 80% LTV 2 year fix at 4.39%. In addition, there are two lifetimes trackers at 4.2% to 75% LTV and 4% to 65% LTV. These products also come with a 1.5% fee.

Individual products include a 2 year fix at 3.79% to 80% LTV and 4% 75% LTV tracker, both requiring a 1% fee.

Buy-to-let market sees strong to 2017

Buy-to-let market sees strong to 2017

Tougher

Despite the rise in demand for buy-to-let properties, Mr Young feels there is growing frustration at the Bank of England’s Financial Policy Committee’s decision to bring in harder mortgage affordability tests.

‘One thing we are aware of however is the increased frustration around many lenders’ rent to income calculations, their ever-changing criteria, plus major difficulties when it comes to finding products on sourcing systems and being able to compare like-for-like,’ Young concluded.[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2017/1/strong-start-to-the-year-for-buy-to-let-market

Landlords should be offered more support, claims peers

Published On: January 12, 2017 at 10:38 am

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Categories: Landlord News

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The Government must do more in order to support buy-to-let landlords, starting by changing tax increases, according to industry peers.

Since the 3% stamp duty increases, alterations to mortgage interest tax relief and other changes, there has been a substantial drop in the number of buy-to-let transactions. A number of would-be investors have been deterred by the alterations.

Concerns

Jenny Mayes, of Simple Landlords Insurance has called on the Chancellor Philip Hammond to listen to the concerns of landlords.

She noted: ‘Landlords should be supported and recognised for their contributions in providing affordable housing, rather than burdened with unfair tax measures that will see them having to take considerable cuts to their income and being forced to pass some of this to their tenants.’[1]

A survey conducted by Simple Landlords this month discovered that landlords’ biggest wish for the New Year is for the Government to alter its stance on buy-to-let tax relief on mortgage interest payments.

Landlords should be offered more support, claims peers

Landlords should be offered more support, claims peers

Impact

Bevan Smith, director of BPM Estates, observed: ‘2017 is going to be an interesting year and I think we are yet to really see how potential changes are going to impact the rental market. Brexit and the US elections aside, it is likely to be changes to landlord taxes and mortgages that will really influence the market place.’[1]

‘Investing in residential property is becoming increasingly expensive and I wouldn’t be surprised if we see landlords sell parts of their portfolio. This could be good news for the buyer-occupier market, but will likely mean less supply for the rental market, which could in turn lead to higher rents,’ she added.[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2017/1/landlords-should-be-supported-rather-than-burdened-with-unfair-tax-measures

Could home staging be a simple way of improving yields?

Published On: January 10, 2017 at 10:34 am

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Categories: Landlord News

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Could home staging be this year’s simple way to make a property more desirable and deliver a higher rental yield?

Home staging goes past interior design to become a marketing tool to ensure that their rental property appeals to a bigger audience as possible.

There are a lot of measures that can be taken in order to improve the internal makeup of a property: Think furniture, lighting and bedding for example. Making your rental property appear more homely and effectively utilising space will attract more would-be tenants.

Furnishings

However, the furnishing of rental properties has been an afterthought for buy-to-let investors for a number of years. That is the view of Robert Walker, founder and managing director of Alexander James Interiors.

Mr Walker notes: ‘Often let unfurnished or at best, let with the bare minimum of items collected on a quick dash to Ikea, soulless properties have been presented to prospective tenants with the expectation of securing a tenancy.’[1]

Could home staging be a simple way of improving yields?

Could home staging be a simple way of improving yields?

‘With more people than ever living within the private rented sector, the expectations of tenants have never been higher-and that includes not only a safe and functioning home but an appealing interior also,’ he continued.[1]

Walker said that 2017 has been predicted to be an ‘annus horribilis’ for buy-to-let investors, given changes to mortgage interest tax relief and tougher mortgage lending criteria. He feels that savvy landlords should be taking whatever simple steps they can in order to maximise their yields.

Lucrative

‘From a landlords perspective, dressing a rental property can also prove lucrative,’ Walker added. ‘Alexander James Interiors has seen a significant rise in demand from landlords, both individual or accidental landlords and professional, multi-unit landlords, for the furnishing of rental properties over the last 18 months as property owners seek to increase their yields.’[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2017/1/dress-to-impress-to-achieve-a-higher-rental-yield

Number of buy-to-let products at lowest for 8 years

Published On: January 9, 2017 at 3:04 pm

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Categories: Finance News

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Data released by Moneyfacts has revealed that there has been a substantial fall in buy-to-let product numbers. According to the report, there have been 74 deals taken from the market in the last month.

The report indicates that the total number of live buy-to-let products stood at 1,482 in December, but has slipped to 1,408 this month. Particularly affected was the 75% LTV sector, which saw the total number of products fall from 606 to 540 during the same period.

This said, the number of products is still higher than the 1,256 seen in January.

Number of buy-to-let products at lowest for 8 years

Number of buy-to-let products at lowest for 8 years

Hit

Charlotte Nelson, Finance Expert at Moneyfacts, observed: ‘The BTL mortgage market took a hit last month, seeing the largest reduction in product numbers since March 2009. Usually, the month of December is quiet, with providers gearing up for the holidays. This time, however, the BTL market has seen a surge of activity, with the number of BTL products falling back to July 2016’s levels. Withdrawals have not been limited to just a few providers, either, with the reductions having been spread across the board.’[1]

‘Alongside tougher affordability, major changes to the way in which income from property rentals is taxed will be coming in April. Lenders are perhaps withdrawing products to get back to just their ‘core’ range in an attempt to wait and see what other providers will be doing in the run up to April. 2017 is set to be an uncertain year, which could be a lethal cocktail for landlords, particularly now there are less products on the market. Anyone unsure about their options should seek out a financial adviser,’ she added.[1]

[1] http://www.propertyreporter.co.uk/landlords/btl-market-sees-the-largest-fall-in-products-in-8-years.html

 

What resolutions do landlords want the Government to make in 2017?

Published On: January 9, 2017 at 11:20 am

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Categories: Landlord News

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A new poll from Landlord Voice on behalf of Simple Landlords Insurance has uncovered what landlords want to see from the Government during 2017.

Number one on landlords’ wish lists for the new year is for the Government to re-think their stance on buy-to-let tax relief for mortgage interest payments.

Tax concerns

Data from the report reveals that the planned tax increases are the major concern for buy-to-let landlords in 2017. 47% of respondents cited these changes as their most prominent worry.

Second on landlords’ wish list would be an end to stamp duty changes, while a reduction in capital gains tax came third.

From April, tax relief on mortgage interest will be gradually phased out and will be fully eradicated by 2020. By then, landlords will be taxed on their income-meaning some will be moved into a higher rate tax bracket.

This said, a separate poll from the Council of Mortgage Lenders revealed that half owned their properties outright and will not be impacted by the changes.

What resolutions do landlords want the Government to make in 2017?

What resolutions do landlords want the Government to make in 2017?

Optimism?

Landlords are undoubtedly under pressure but many are still optimistic about the future. 36% of people questioned said that their confidence level for the year ahead is 8 out of 10 or higher.

88% said they plan to continue as landlords in 2017, with one third planning to increase their portfolios.

Jenny Mayes, of Simple Landlords Insurance, said: ‘We strongly urge Chancellor Philip Hammond to listen to landlords’ concerns. Landlords should be supported and recognised for their contributions in providing affordable housing, rather than burdened with unfair tax measures that will see them having to take considerable cuts to their income and being forced to pass some of this to their tenants.’[1]

[1] http://www.propertyreporter.co.uk/landlords/what-new-year%E2%80%99s-resolution-should-the-government-make.html