Posts with tag: investors

Property industry calls for boost to Build to Rent

Published On: November 22, 2016 at 10:51 am

Tags: build to rent,housing,investors,renters

The UK housing industry has called on Chancellor Philip Hammond to announce measures in tomorrow’s Autumn Statement that will give a boost to the Build to Rent sector.

Official figures released from the British Property Federation (BPF) reveal that during the last year, the number of Build to Rent units with planning permission, under construction or completed in Briton increased by more than 200% to hit 67,000 units.

Encouragement

The BPF notes that despite these figures being encouraging, the sector could be doing more to deliver homes. It feels that investors could have as much as £50bn to invest.

Interest in Build to Rent has come from far and wide, particularly from the United States where the scheme is already popular.

Research from Strutt & Parker, Stanhope and Network Homes indicates that the UK is on the verge of a large, commercially developed Build to Rent sector.

Growth

Stephanie McMahon, head of research at Strutt & Parker, observed: ‘The UK private rental market is going through a period of sustained growth, doubling in size to 5.4m from 2001 to 2014, a trend which only looks set to continue. Some 48% of those who responded to our Urban Renters survey had been renting the same property for at least the last two years, with 24% of tenants anticipating renting as a family in the future.’[1]

‘Our analysis illustrates that, although the majority may wish to own at some point, a burgeoning group of renters is making the choice for rental over ownership and enjoying the flexibility it provides. While the aspiration to own is still a key motivation for the majority of households, a preference for renting is starting to surface, with 9% of respondents in Greater London preferring to rent. We seem to be on the brink of becoming a rental nation,’ she added.[1]

Property industry calls for boost to Build to Rent

Lifestyle choice

In addition, analysis seems to show that there is growing evidence to suggest that renting is becoming more of a lifestyle choice, as opposed to a consequence of unaffordable housing.

The Private Rental Sector has increased by 82% in the last decade, becoming the second largest tenure group. Halifax’s 2015 Generation Rent survey indicated that between 2012 and 2015, for those aged between 20 and 45, homeownership dropped by 1%. Additionally, there was a 2% fall in first time buyers, while there was also a 3% increase in those who do not want to own a property.

[1] http://www.propertywire.com/news/europe/property-industry-uk-wants-tax-boost-build-rent-sector/

Investors to look outside London for growth spots

Published On: November 16, 2016 at 12:57 pm

Author: Em Morley

Categories: Landlord News

Tags: Buy-to-Let,capital growth,investors,rental yields,rents

A new survey has revealed that investors will look outside of the capital during 2017, as other regions continue to grow.

The investigation from RSM revealed that over half of respondents feel property prices in London will rise in 2017, albeit at a slower pace than previously. One third said prices would stay constant, while 14% anticipate a fall.

Outside capital growth

When asked to name which region outside of London will see the highest growth in 2017, the South East was most popular, with 28%. The North West recorded 18% of votes, while the South West and West Midlands came joint third with 11%.

61% said that the spiralling cost of housing in London and the South East will generate further growth in the sector.

For those responding to the impact of interest deduction plans, opinion was divided. 38% said there would be no change on residential real estate acquisitions. 37% thought the number would reduce.

Nearly two-thirds forecast overseas investors to continue to be prominent, accounting for 30 and 60% of the total commercial property investment in 2017.

70% of those questioned said they anticipate the cost of borrowing to stay the same, whole 8% feel rates could fall further.

Investors to look outside London for growth spots

Quiet optimism?

Howard Freedman, RSM’s head of real estate and construction said: ‘2016 has been an eventful year for the UK real estate sector. There was significant growth in 2015 with a considerable number of deals concluding throughout the year. At the beginning of 2016, however, the sector paused for breath. Transaction levels started to fall amid concerns that the market was topping out. The EU referendum added further uncertainty and changes to Stamp Duty Land Tax rules and updates to income and inheritance tax also cooled the residential market, particularly in Central London.’[1]

‘Our latest survey shows that despite these setbacks, there is a degree of optimism around price growth in 2017, with a renewed interest in the prospects for the UK regions. There is of course concern around a lack of investor interest following the Brexit vote, but our survey suggests that over the long term the UK real estate market remains one of the more favourable opportunities for both domestic and overseas buyers,’ he continued.[1]

Concluding, Freedman noted: ‘Now more than ever, investors and developers must focus on the fundamentals of property investment: location, sub-type and quality of tenant. Those that hold their nerve and stick to these principles will reap the biggest rewards in the year ahead.’[1]

[1] http://www.propertyreporter.co.uk/finance/property-investors-predicted-to-look-outside-the-capital-for-growth-in-2017.html

Buy-to-let activity down by 13.3% in last year

Published On: November 9, 2016 at 10:02 am

Author: Em Morley

Categories: Finance News

Tags: Buy-to-Let,buy-to-let activity,investors,landlords,tax

Buy-to-let activity fell by 13.3% in the last year, according to new data provided by Connells Survey & Valuation.

The figures are unsurprising given the number of tax changes introduced by the Government over the last year. However, there are positive signs that private landlords will return to the sector in the coming twelve months, with a 4.5% month-on-month rise in valuations recorded in October.

Pick-ups

Despite the annual slowdown in the buy-to-let market, activity levels have risen in other areas of the market. There was a significant 6.4% increase in the number of property valuations, in comparison to the same month in 2015.

John Bagshaw, corporate services director of Connells Survey & Valuation said: ‘Total valuation market activity has improved over the course of the last twelve months-despite the attack on the buy-to-let market by the previous chancellor. Recently, as landlords have started to come to terms with the stamp duty surcharge and the announcement of the changes to treatment of mortgage interest, the buy-to-let market has started to pick back up.’[1]

Buy-to-let activity down by 13.3% in last year

Remortgaging rises

Encouraged by competitive deals and record low interest rates, remortgaging property owners have seen a substantial rise in business. There has been a 16.8% year-on-year increase in the number of remortgage valuations in October, with homeowners lured by attractive deals.

Mr Bagshaw continued by saying: ‘Remortgagers have been one of the most active segments of the market. As rates have fallen over the last twelve months, savvy homeowners have been taking full advantage of the benign borrowing environment and competition between lenders-borrowers can afford to be more selective than they could twelve months ago.’[1]

‘Homeowners on expensive standard variable rate mortgages are making big savings moving onto the best fixed and discounted rate mortgages around.’[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2016/11/buy-to-let-activity-levels-drop-13-3-but-predicted-to-grow

Is the buy-to-let market as resilient as it appears?

Published On: November 8, 2016 at 12:24 pm

Author: Em Morley

Categories: Landlord News

Tags: Buy-to-Let,buy-to-let landlords,investors,mortgages,property market

A recent report from HMRC indicated that one in four properties were sold to investors during the third quarter of 2016. Despite this data not alluding to any kind of buy-to-let issues, perhaps the housing market is not is resilient as it appears on the surface?

Investment

What is not immediately common knowledge is that many of the properties sold in the last quarter to investors were completions of off plan deals. As such, these investors were already interested in buying the property, which were released onto the market following the completion of building work. It is possible that these sales were agreed before the referendum.

Of course, the figures for the next quarter could also include off-plan sales, with housebuilders offering new build properties to potential buyers months or years before completion. With this in mind, perhaps the real impact of the stamp duty reforms and the Brexit decision will not be felt until 2017.

Is the buy-to-let market as resilient as it appears?

Marc von Grundherr, Lettings Director at Benham & Reeves Residential Lettings, notes: ‘These figures bely the true state of the housing market. Having recently returned from a series of property investment seminars in the Far East, I can tell you that investor confidence has fallen off a cliff. No one is buying central London property right now and the only ones who would even consider it are vulture funds and investors aiming to pick up bargains when Sterling plummets in value again, which it invariably will once Article 50 is triggered. UK investors have also stayed away now that changes to mortgage relief and the wear and tear allowance have made buy to let far less profitable.’[1]

[1] http://www.propertyreporter.co.uk/landlords/are-positive-figures-in-the-housing-market-disguising-the-btl-famine.html

Brexit ruling set to increase uncertainty in the housing market

Published On: November 7, 2016 at 12:37 pm

Author: Em Morley

Categories: Property News

Tags: Brexit,high court,investors,landlords,property market

Last week saw a momentous decision in the High Court that blocked Theresa May from starting the process of leaving the UK without the consent of Parliament.

This is likely to cause more uncertainty in the housing market, according to Paul Smith, CEO of haart estate agents.

Clarification

Mr Smith feels that the transaction rates in the sales market are likely to drop as both buyers and sellers receive more clarification on the future of the UK.

Smith observed: ‘The High Court’s decision will elongate the process of Britain leaving the European Union, reigniting cause for a lack of confidence among buyers, sellers and housebuilders. It cannot be emphasised enough how much the residential property market is reliant on confidence and as we currently see a market that is suffering from almost record low transaction levels, especially in the capital, it is now more important than ever that clarity is provided.’[1]

Clean Break

Mr Smith went on to say that a ‘quick, clean break from the EU,’ is required to help increase the residential property market and wider economy.

Brexit ruling set to increase uncertainty in the housing market

‘Britons have voted to be free of the EU and their wishes should be respected with a clear exit strategy being put in place. The High Court’s decision is likely to stall the process, increasing likeliness of a half-way house deal that would see many Brexit promises reversed, something that the Government must avoid’, he noted.[1]

‘Our property market has in the past proved robust and bounced back in terms of adversity, however guarantees of future stability would certainly not go amiss-and clarity over the direction of Brexit is a good place to start,’ Mr Smith concluded.[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2016/11/high-court-brexit-ruling-will-increase-uncertainty-in-housing-market

Why Property Has Been the Best Investment of the Last Ten Years

Published On: October 25, 2016 at 8:59 am

Author: Em Morley

Categories: Property News

Tags: Buy-to-Let,buy-to-let landlords,investors,property investment,property investors

Property has been named the best investment in the UK over the last ten years, delivering a significantly higher return than alternative options, such as the stock market and savings accounts.

A new study by estate agents Leaders and Romans compared the return an investor would have received in each of the four markets, had they invested an initial £50,000 in 2006.

Why Property Has Been the Best Investment of the Last Ten Years

The research revealed that the buy-to-let market has generated a 175% return over the past decade, equating to a profit of £138,936. In comparison, gold has delivered a profit of £50,673, interest on savings accounts is worth £14,447, and a £50,000 investment in the FTSE 100 has yielded just £2,969 over the same period.

The Letting Managing Director at Romans, Michael Cook, says: “Buy-to-let performs significantly better than other investments in terms of an overall return. Our research shows a buy-to-let investor in 2006 would be almost £90,000 better off today than somebody who invested in gold, and more than £135,000 up on somebody who bought stocks and shares.

“Although property investment can be more time-consuming and hands-on, with such incredible results at the end, it’s certainly worth it.”

Although gold, stocks and shares, and savings offer greater liquidity than property, which can take several weeks to buy or sell, this isn’t deterring astute investors, who value the dual benefits of a monthly rental income and capital appreciation over time.

Allison Thompson, the Managing Director at Leaders, explains why she thinks property is the best investment: “Despite many changes over the last ten years to the housing market and wider economy, buy-to-let is still the clear winner. As well as the most rewarding, it is also the safest of all the investment options over the long-term. We have seen historically that, although cyclical, house prices always rise in the long run. With the acute shortage of housing across the UK, this is only likely to continue.

“Cautious investors can minimise their risks in a number of ways, including utilising rent guarantee schemes to effectively insure their income – an option not available with other investments. This, along with the substantial returns to be made, make property more attractive than all other types of investment.”

If you are thinking of investing in or further into the property marker, you must be aware of the difference between Rent Guarantee Insurance and guaranteed rent schemes: https://www.justlandlords.co.uk/news/rent-guarantee-insurance-guaranteed-rent-schemes/

Do you believe that property is the best investment of the last ten years?