Posts with tag: Buy-to-Let

Right to Rent affecting those with no passport

Published On: June 16, 2017 at 10:45 am

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Categories: Landlord News

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A new piece of research carried out by the Residential Landlords Association has again raised concerns over the Right to Rent scheme.

Nearly half of private landlords asked said that the scheme has made them less inclined to let to would-be tenants without a UK passport.

Checks

Around 17% of UK citizens do not have a passport, which means they could unintentionally lose out under stringent immigration checks.

51% of landlords are less likely to consider letting to tenants outside the UK. As uncertainty surrounding the status of EU nationals in Britain continues, 22% of landlords said that they are less likely to rent property to nationals from the EU or the European Economic Area.

Right to Rent affecting those with no passport

Right to Rent affecting those with no passport

Most landlords surveyed said that they were less likely to let to people who cannot provide a UK passport, as they fear criminal sanctions should they be inadvertently tricked by fraudulent documents.

As a result, the RLA is supporting an application for a judicial review of the Right to Rent policy by the Joint Council for the Welfare of Immigrants. It is concerned that the scheme discriminates against those who cannot provide their status easily.

Damage

RLA policy director David Smith, noted: ‘These figures show the damage that the right to rent scheme is causing for those who might have the right to rent property, but cannot easily prove their identity.’[1]

‘The added threat of criminal sanctions is clearly leading many landlords to become even more cautious about who they rent to. This is a dangerous and divisive policy that is causing discrimination. It must be scrapped,’ Mr Smith concluded.[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2017/6/britons-with-no-passport-struggling-to-rent-due-to-immigration-checks

 

Top regions for BTL split between Tory and Labour

Published On: June 16, 2017 at 9:43 am

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The latest quarterly buy-to-let index report from LendInvest has revealed that the top ten postcode areas in England and Wales are split evenly between locations that voted for the Conservatives or Labour.

LendInvest’s Index is calculated by analysing four critical measures, namely:

  • capital value growth
  • transaction volumes
  • rental yield
  • rental price growth

Locations

Luton has been revealed as the best buy-to-let investment location across both England and Wales. Average yields here are 4.54%, with rental price growth 7.37%. The majority of people here were found to have voted for Labour in the recent election.

Stevenage was found to be the top region for buy-to-let amongst Conservative supporters, with capital gains of 11.64% and rental price growth of 7.5% in the last quarter.

Romford, which came top of the pile in previous editions of the report, fell to tenth, due to falling rental yields and capital gains.

The top-ten buy-to-let postcodes, as per the Index, were found to be:

  Yield Capital gains Rental price growth Transaction volume growth
Luton 4.54% 12.83% 7.37% -10.40%
Stevenage 4.05% 11.64% 7.47% -9.40%
Rochester 4.55% 12.34% 5.45% -9.40%
Colchester 4.29% 14.14% 4.14% -11.16%
Dartford 4.37% 13.61% 3.92% -10.94%
Peterborough 4.71% 9.04% 6.98% -10.67%
Southend-on-Sea 4.30% 12.37% 3.89% -10.26%
Manchester 6.11% 7.58% 7.53% -12.41%
Canterbury 4.36% 9.34% 6.62% -11.49%
Romford 4.81% 14.42% 1.28% -11.67%

For Conservative supporters, the top-ten reads:


Yield
Capital gains Rental price growth Transaction volume growth
Stevenage 4.05% 11.64% 7.5% -9.40%
Rochester 4.55% 12.34% 5.4% -9.40%
Colchester 4.29% 14.14% 4.1% -11.16%
Dartford 4.37% 13.61% 3.9% -10.94%
Southend-on-Sea 4.30% 12.37% 3.9% -10.26%
Romford 4.81% 14.42% 1.3% -11.67%
Chelmsford 3.96% 12.44% 3.3% -10.25%
Northampton 4.68% 9.64% 4.8% -11.23%
Swindon 4.10% 9.46% 5.0% -10.49%
St Albans 3.56% 11.30% 3.9% -12.48%

 

Top regions for BTL split between Tory and Labour

Top regions for BTL split between Tory and Labour

For Labour, the list is:

Yield Capital gains Rental price growth Transaction volume growth
Luton 4.54% 12.83% 7.4% -10.40%
Peterborough 4.71% 9.04% 7.0% -10.67%
Manchester 6.11% 7.58% 7.5% -12.41%
Canterbury 4.36% 9.34% 6.6% -11.49%
Bristol 4.45% 10.34% 4.8% -10.82%
Coventry 4.95% 8.49% 5.6% -10.49%
Ipswich 4.02% 11.77% 3.2% -10.86%
Newport 4.79% 5.52% 6.8% -8.83%
Ilford 4.37% 13.94% 0.9% -14.63%
Leeds 4.77% 5.97% 6.4% -9.59%

Changes

Christian Faes, co-founder and chief executive of LendInvest, said: ‘Against a backdrop of all the political upheaval the country has endured in the last quarter, it isn’t surprising to see some significant changes in the performance of postcodes against one another.’[1]

‘These shifts, however, are more isolated than systemic and the fact that there has not been a greater shakeup in the Top 10 buy-to-let postcodes signals the durability and resilience of the UK property market,’ he added.[1]

[1] http://www.propertyreporter.co.uk/property/top-ten-btl-postcodes-see-significant-changes-during-election.html

 

Tax reforms putting investors off

Published On: June 14, 2017 at 8:40 am

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Categories: Finance News

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The number of mortgages approved for buy-to-let purchases fell during April, according to the latest figures released from the Council of Mortgages Lenders (CML).

This data indicates that that many landlords are being driven from the market due to alterations to mortgage interest tax relief.

Hits

Government measures aimed at reducing growth within the buy-to-let sector, such as the 3% stamp duty surcharge on buy-to-let homes, are beginning to hit smaller investors in particular.

The CML’s data shows that there was a 16% fall in buy-to-let lending between March and April. In addition, the value of lending in the sector was 16% lower month-on-month.

On the other hand, first-time buyers are taking advantage of competitive rates- as shown by the 25,400 loans taken out by this group during April. These was collectively worth £4.1bn, down by 16% month-on-month but up by 8% year-on-year.

Tax reforms putting investors off

Tax reforms putting investors off

One-sided

Alastair McKee, managing director of One 77 Mortgages, noted: ‘The market is less lopsided than one-sided. Against a backdrop of cheap loans, Help to Buy and significantly reduced competition from landlords, first-time buyers are having a field day.’[1]

‘With many landlords still reeling from the raft of tax and stress-testing changes, first-time buyers see an opportunity and are taking it,’ Mr McKee added.[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2017/6/tax-reforms-continue-to-deter-buy-to-let-landlords

 

 

Landlords looking outside of London for the best yields

Published On: June 13, 2017 at 10:01 am

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Latest industry research suggests that buy-to-let landlords are looking away from London and towards the regions, in order to find the best rental yields.

Provincial cities with notoriously large populations of university students within the North and the Midlands have been named in the top-ten UK buy-to-let hotspots.

Just three London boroughs- namely Southwark, Newham and Tower Hamlets- made it into the top 20.

Location, Location, Location

It appears that a number of landlords are being thoughtful about location before deciding the go ahead and purchase an investment property. Many are conscious of the fact that its value will appreciate at a greater rate than mortgage borrowing.

Significantly-higher property prices in some regions of the capital appear to be putting off some landlords from purchasing property, with the knowledge that they could get better returns elsewhere.

Liverpool was recently named as the top-region for buy-to-let, with average annual rent achieved here £12,252. The average property price here is £122,283, and the typical mortgage cost £2,421. This means that the net rental yield before tax is 8%.

Landlords looking outside of London for the best yields

Landlords looking outside of London for the best yields

In addition, the Midlands could also prove attractive to would-be investors, with yields of 5.6% and 5.4% in Nottingham and Coventry respectively.

Greater Manchester is seeing average rental yields of 4.3%, while Portsmouth offers 4.2%.

London however offers rental yields of just over 3%, with savvy investors looking outside of the capital.

PRS in Scotland looking secure

Published On: June 13, 2017 at 9:07 am

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Categories: Property News

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A new report has suggested that the private rental sector in Scotland will continue to offer substantial investment opportunities, despite political uncertainty.

Analysis from property consultancy Galbraith shows that prices north of the border remain competitive, in comparison to the rest of the UK. In addition, the sector is showing growth at a period of low interest and volatile stock markets.

Attractive

The most recent Registers of Scotland monthly house price statistics indicate that the average price of residential property in Scotland increased by 2.6% in April, in comparison to the same time last year.

Bob Cherry, head of lettings and partner at Galbraith, feels the rental market remains an attractive investment alternative- with yields around 4%-5%.

He suggests that the increase could mean good news for landlords looking for capital appreciation on their investment. With rents also at a high level, this could be an optimum time for savvy landlords to think about the Scottish private rental market.

Demand

Galbraith has seen an 11% rise in tenant demand for rental property during the opening quarter of 2017, compared to the same period one year ago. In addition, the firm has seen a rise of 28% in the number of rental properties listed quarter-on-quarter.

What’s more, the number of applicants registering to let a property was up by a huge 79% between January and March, in comparison to the final quarter of 2016. Agents also conducted twice as many rental viewings during this timeframe.

The firm-wide average rent achieved was £658pcm – 15% greater than the national average.

PRS in Scotland looking secure

PRS in Scotland looking secure

Opportunities

Mr Cherry observed: ‘Both UK and foreign investors are looking at property opportunities outside of the over inflated property markets of London as well as other prosperous cities south of the border, and Scotland is an attractive option due to the affordability aspect combined with the level of demand from across all rental segments including families, professionals and retiree couples.’[1]

‘Landlords have been impacted by a range of legislative changes over the past couple of years, not least the introduction of a 3% tax on buy to let properties and the new tenancy act passed last year,’ he continued.[1]

Cherry went on to add: ‘However, rents are continuing to perform well with improvements in tenant finances meaning fewer incidences of late or non-payment of rent therefore we have experienced a 50% drop in rent arrears over the past 12 months.’[1]

‘Market conditions including landlord supply and tenant demand, determine rental prices and this must be carefully considered but with property prices in Scotland currently on the up, I believe the buy to let property market is proving a viable investment option for those looking to invest in bricks and mortar, as well as offering exciting potential for landlords wishing to grow their portfolio.’[1]

[1] http://www.propertywire.com/news/uk/rented-sector-scotland-sound-outlook-despite-political-uncertainty-uk/

 

Retiree renters paying much more than one decade ago

Published On: June 12, 2017 at 9:39 am

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A new report from Countrywide has revealed that retiree tenants are paying a lot more in rent than they were ten years ago.

During the last twelve months, retiree renters paid a total of £3.7bn in rent – a rise of 216% on the £1.2bn paid in 2007.

This rise means that £1 in every £14 paid by tenants in the UK comes from a pensioner. In fact, the total amount of rent paid by private tenants in Britain during the last year hit £50.6bn.

Rent Rises

In 2017, pensioners paid an average of £810 per month – a rise of 0.3% on last year and 19% since 2007. However, the typical retiree actually paid 12% less than the average tenant, as they were likely to rent a smaller property.

75% of retiree tenants rent a one or two-bedroom home, in comparison to 66% of all tenants.

Pensioners now make up 8% of the total number of tenants, in comparison to 5.2% in 2007. The greatest proportion of retiree tenants can be found in Wales, where almost 1 in 5 tenants are of pensioner age. The South West and North East have the next greatest proportion.

However, London has the fewest, with just 3.5% of retiree tenants.

In Britain as a whole, 53% of tenant pensioners live alone, while 81% are over 65.

Retiree renters paying much more than one decade ago

Retiree renters paying much more than one decade ago

Slow Growth

During May, the cost of renting a home was just 0.1% higher than it was in May 2016. In the capital, rents fell for the seventh straight month.

Johnny Morris, Research Director at Countrywide, observed: ‘The rental market can no longer be typified by the image of carefree, young professionals.  More than half of tenants are over 30 and the number of pensioners renting has reached record levels.  And with younger generations growing up much less likely to be homeowners, tenants are getting older with an ever more diverse group of people calling the rented sector home.’[1]

‘Seven consecutive months of falling rents in the capital are starting to show signs of rippling out across the country with rents down in over half of regions outside London. The number of homes on the market remains well up on last years’ levels, softening rental growth,’ he added.[1]

[1] http://www.propertyreporter.co.uk/landlords/retirees-rent-triples-in-10-years.html