Posts with tag: buy to let market

Property price growth in key UK cities is slowing

Published On: December 21, 2016 at 10:16 am


Categories: Property News

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House price growth in some of the UK’s key cities is continuing to increase, in all but one region, according to the latest report from Hometrack.

In addition, the firm suggests that property prices in these locations will rise by 4% during 2017.

Slowing Growth

Despite the growth in property prices, these increases are at a slower rate than in previous months. Cambridge for example has seen its rate of growth slip from 12.5% to 2.5% over the last year. London has seen growth fall from 7.6% to 3%-the lowest level of growth seen in the capital for over 3 years.

These two cities, alongside Oxford, Bournemouth and Bristol have seen the largest rate of growth of UK cities in the last five years, but are now experiencing a slowdown.

More steady growth has been recorded in Birmingham, Manchester, Leeds, Leicester and Nottingham. These particular cities have seen house price growth between 5% and 8% per annum during the last year.

Aberdeen is the only city to see year-on-year falls, with values 6.4% down.

Property price growth in key UK cities is slowing

Property price growth in key UK cities is slowing


For all sales, cities covered by the index saw between a 50%-60% rise in sales volumes in the last five years. In cities where property price growth has been high and affordability levels most stretched, volumes of sales have dropped off during the last two years.

Looking to 2017, Hometrack suggests that weaker growth in real household incomes and worries over Brexit will impact on housing market sentiment.

The Hometrack report states: ‘While the economy is projected to grow in 2017, levels of employment are forecast to grow more slowly although mortgage rates are expected to remain low by historic standards. Given the current projections for the economy, we do not believe that any of the cities covered by the index will be registering year on year price falls at the end of 2017.’[1]

‘However, we do expect the rate of city level house price growth to slow over the next 12 months led by weaker growth in cities across southern England. This is where affordability pressures on home owners are most extended and where previously buoyant investor demand has been impacted by fiscal changes and by tougher underwriting standards for mortgaged borrowers,’ it continues.[1]


Moving on, the report says: ‘While we expect some moderation in the rate of house price growth from current levels in larger UK regional cities, such as Birmingham and Manchester, we believe the underlying fundamentals in these markets remain attractive and there is potential for further price appreciation over 2017.’[1]

‘We expect our London index to register nominal growth of 2% in 2017. This will equate to a fall in real terms. A harder landing for house prices could drag the headline rate lower. While house prices are registering small, single digit price falls in central London areas, a lack of forced sellers is expected to minimise the scale of price falls,’ the statement concludes.[1]



How to get the most from your student property investment

Published On: November 29, 2016 at 11:15 am


Categories: Landlord News

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Landlord News spoke to Benjamin Hodds, the Managing Director of YourNest to share some of his top tips for investors, specifically in the student property market. This particular sector is known for high yields and high risks and here, Mr Hodds shares his experience of how to be successful in this market:

‘The property market is bouncing back, however we are seeing more and more barriers with taxes taking its toll on the buy to let market. With an increase in stamp duty, property prices back on the up and the ever-increasing costs of owning a buy to let property we must be creative to make our investments more profitable.

YourNest properties are on the forefront of these changes, working with landlords to manage their properties with many landlords requiring support to adapt their nest eggs in order to remain profitable in today’s market.


Student properties are often at risk from long void periods and in today’s market students are becoming more demanding expecting more from their home and with the standard of properties improving the weaker properties are left until the very end of letting season, risking a lengthy void period.

In our opinion we are happy to see landlords improving their homes for students, there are far too many properties unsuitable for tenants and ultimately getting the most from your student property investment really boils down to how much you put into your property.

Investors often fail at the first hurdle and kit out their houses with low quality furnishings as we are as an industry in the mind-set that our properties will need a full over haul at the end of term. Our first piece of advice is to ditch the bargain shopping spree and invest in good quality furniture to limit having to replace this every year. It may seem an expense to start with, but throwing in a £300 faux leather sofa for the year is asking for trouble, invest in quality for those key pieces and save money down the line.

We’re fed up of seeing head to toe IKEA but if carefully selected teaming up some IKEA accessories with a luxury kitchen and finishing touches often does the job.

The cost of living is increasing, however if we take care and improve our ‘product’ we can offer our homes at an increased price resulting in an even higher yield.

How to get the most from your student property investment?

How to get the most from your student property investment?


There is tough competition out there with some fantastic properties on the market and you really must stay one step ahead. Students are looking for houses with TV’s, en-suites and trendy furnishings and if yours doesn’t fit the bill there are plenty that will. We really advise our landlords to invest the extra cash and limit the need for a re-haul every year. In our experience tenants respect their surroundings if they are given pleasant surroundings.

We visit a number of properties which just don’t make the cut and in today’s market we advise our landlords to implement specific changes or we kindly decline management. Keeping your tenants happy really is the key to getting the most out of an investment and if tenants are expected to live in anything below standard this is often the reason why our hard earned income is shrinking.

Once your house is up to scratch and we would advise making sure you or your managing agent is visiting every 6 months and inspecting the property, keeping you in the loop with any issues and pre-empting any large costs and protecting your income at the end of their tenancy.

Lastly, our ultimate tip would be to keep your student investment for some time and generate a healthy monthly income as well as that nest egg to release cash and build up your property portfolio.’


Interest in Buy-to-Let Properties Falls by Over a Quarter

Published On: April 13, 2016 at 8:39 am


Categories: Landlord News

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Interest in new buy-to-let property purchases fell by over a quarter in March, as the Stamp Duty deadline loomed, according to new data from Rightmove.

Inquiries dropped by 27% compared with March last year, reversing the upward trend recorded between December and February, when interest rose by 24% annually.

The Head of Lettings at Rightmove, Sam Mitchell, comments: “This waning of interest definitely seems to predict a slowdown in the buy-to-let market, but what’s not yet clear is if this will only turn out to be a short-term pause.

“It could be that some investors are waiting until the tax changes have had time to bed in before they review their business and continue to make purchases. If this removes some of the competition for smaller properties, then it could spell good news for many first time buyers.”1

Interest in Buy-to-Let Properties Falls by Over a Quarter

Interest in Buy-to-Let Properties Falls by Over a Quarter

76% rise in buy-to-let sales in March compared to the previous year, as landlords rushed to beat the Stamp Duty surcharge.

Rightmove also found that the average rental asking price increased by 0.8% in the first quarter of the year.

Average rents ranged from a huge £2,021 per month in London – a 1.6% rise on last year – to £538 a month in the North East – down 0.5%.

However, some of Rightmove’s figures contrast with newly agreed actual rent figures released by HomeLet.

HomeLet’s research shows that the average rent in the capital is now £1,536 – up by 7.7% over the past year – and for the rest of the UK (excluding London), the average rent is £755 per month.

In the North East, however, Rightmove and HomeLet figures are only £7 apart, with HomeLet reporting £531 a month.

HomeLet’s study also found that in March, 37% of its insurance policies were bought by landlords with new properties. This was just 24% last year.

The CEO of Barbon Insurance Group, Martin Totty, says: “We’ve continued to see increases in rents on new tenancies in almost every part of the UK during the first quarter, as the private rental market has responded to the pressures of an imbalance between demand and supply.

“However, external factors may now come into play: the Stamp Duty increase has already had an impact and that surge in the acquisition of property by landlords could now cause a short-term increase in the supply of rental property in some areas of the country. In the longer term, changes to rules around buy-to-let mortgage interest being offset against tax bills, coupled with the Bank of England’s instruction to lenders to apply more exacting criteria on buy-to-let lending, may have a limiting effect on supply.

“The data from the HomeLet Rental Index will be eagerly anticipated over the next few months as an indicator of the impact these changes may have on the market. However, despite these factors, we expect the private rental sector to continue to play a crucial role in a housing market where population growth will continue for the foreseeable future, according to official projections.”2 

We will continue providing you with landlord updates on all the goings on of the market.



Will new regulations slow buy-to-let market?

Published On: April 11, 2016 at 11:51 am


Categories: Finance News

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Over the past year, residential landlords have been subjected to a whole host of new regulations. Alterations to mortgage interest tax relief, an increase in stamp duty surcharges on buy-to-let purchases and changes to the wear and tear allowance are just some of the initiatives aimed at cooling the market.

Should the Bank of England press ahead with its plans for tighter mortgage lending criteria, this will be a further blow to buy-to-let landlords.


The Bank of England believes the stricter lending criteria will cut the amount of buy-to-let borrowing by between 10%-20% in the next three years. Until presently, landlords have needed between around a 25% deposit to secure a buy-to-let mortgage.

Changes proposed by the Prudential Regulation Authority-the Bank of England’s regulatory sector-has called for lenders to make more stringent checks on landlords. This is to ensure that they can afford the mortgage repayments on their property. In addition, it has called for banks to test if landlords would still be able to afford monthly payments should interest rates rise.

Will new regulations slow buy-to-let market?

Will new regulations slow buy-to-let market?

Slowing Tactics

Jane Morris, Managing Director of PropertyLetByUs, observed, ‘this new lending criteria is a move at slowing down the booming buy-to-let market, which has seen a rush of landlords purchasing property to beat the stamp duty rise, which comes into effect this month. We have seen a sharp increase in the number of landlords placing properties with us over the last six months and since January, landlords sign ups have increased by 50-60%.’[1]

‘However, the market is very likely to slow down over the next few months, with Britain’s 1.8million landlords now facing the brunt of the increased taxes and new mortgage restrictions. The buy-to-let market provides the UK with essential housing for over 2.5million tenants and has been unjustly targeted by the government,’ Morris continued.[1]

Concluding, Morris noted, ‘landlords will need to find ways to protect their profits and income.’ She feels it is inevitable, ‘we will see rent rises and many landlords will be reviewing their fixed costs.’[1]

Finally, she said, ‘it is certainly a good time to review lettings costs, as some landlords could make significant savings on their letting agent finder and fully managed fees.’[1]


Residential landlords’ actions to change in 2 years?

Published On: April 8, 2016 at 10:56 am


Categories: Landlord News

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A leading credit ratings agency has given its forecast for the buy-to-let market in the next two years.

Fitch has forecasted that buy-to-let will continue to grow over the next 24 months. However, the prediction also notes that the effects of the stamp duty increases and mortgage tax relief will cause the sector to cool significantly.


The agency observes that Britain’s buy-to-let performance has been good in financial terms. Arrears of one month or more stood at 2.43% in January, in comparison to 2.35% for prime transactions. In addition, small void periods and the lack of new housing supply is keeping the sector buoyant.

With this said, the agency warns that the increased stamp duty surcharge and forthcoming tax changes will eventually change landlords’ actions and alter the buy-to-let market.

Residential landlords' actions to change in 2 years?

Residential landlords’ actions to change in 2 years?


A Fitch report to investors observes, ‘industry surveys suggest that existing landlords are less likely to add new properties when the tax changes take effect, and some may look to sell. Our gross new mortgage lending forecasts for UK incorporate the potential for the announced changes to slow the growth in BTL origination.’[1]

‘Over the longer term, government and regulatory intervention will have a larger impact,’[1] the report continues. This is particularly prevalent should a Bank of England proposal to impose stricter checks on mortgage lenders come into force.

‘The proposal does not set limits on loan-to-value, debt to income, or interest coverage rations (but) if these were adopted, this could make BTL less attractive for landlords if rental yields do not rise sufficiently to offset the impact of such affordability rules,’ the report added.[1]



More residential landlords considering limited companies

Published On: April 4, 2016 at 2:51 pm


Categories: Landlord News

Tags: ,,,,,

An interesting survey of almost 1,400 private rental sector landlords has revealed that more numbers are looking into shifting their property investments into limited companies.

The research was conducted by BDRC on behalf of Paragon Mortgages and was conducted to gauge reaction on how increased stamp duty and cuts to tax relief has changed the buy-to-let market.


Of the respondents, 41% said that they are thinking of moving their portfolio into a limited company as a direct result of the changes. 5% said that they have already founded limited companies.

For landlords with 20 or more properties, 14% are already operating as limited companies, with a huge 63% saying they are considering this move.

43% of landlords questioned said that stamp duty rises will affect their investment plans in the next two years.

More residential landlords considering limited companies

More residential landlords considering limited companies


Despite rising uncertainty about the impact of tax relief changes and increased stamp duty, tenant demand is still extremely high.

In the final quarter of 2015, demand for rented accommodation was highest in the South West, with 40% of landlords reporting an increase. However in the North West, just 24% of landlords said they experienced more demand in the same period.


John Heron, director of mortgages at Paragon, noted, ‘recent Government interventions into the buy-to-let market are now beginning to impact landlord sentiment and plans. The fundamental drivers of the market however-tenant demand and yields-remain strong so there are competing dynamics in play.’[1]

‘It is interesting to see that concern about the impact of changes to stamp-duty and tax relief is greatest among larger landlords,’ Heron continued. ‘This concern is likely to grow now that the Government have confirmed that landlords with larger portfolios will have to pay the increased rate of stamp-duty on buy-to-let purchases.’[1]