Posts with tag: landlords

Will Stoke-on-Trent be the next investment hotspot?

Published On: June 16, 2017 at 2:08 pm

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New analysis from Property Partner reveals that Stoke-on-Trent is the best region for buy-to-let landlords- based on affordability and rental return.

The Potteries region was followed by Oldham and Liverpool, with a distinctive North/South divide noticeable in the research.

Efficient

The top-ten most efficient regions to become a buy-to-let in Britain are located in the North, while the least efficient are in the South.

Property Partner’s study ranked the UK’s 100 major towns and cities, looking at average income, average property price and typical rent in every area.

Alongside those regions mentioned, the top-ten was also made up of Leeds, Milddlesbrough, Newcastle, Stockton-on-Tees, Gateshead, Rotherham and Rochdale.

Demand

On the other hand, the South dominated the bottom of the rankings, as a result of demand driving prices up. This in turn leads to high capital requirements in order to enter the market and lesser rental yields.

Landlords in Poole face the most challenging investment, followed by those in Central London and Sevenoaks. The rest of the top-ten was made up of Bournemouth, Cambridge, Oxford, Winchester, St Albans, Chelmsford and Brighton.

Will Stoke-on-Trent be the next investment hotspot?

Will Stoke-on-Trent be the next investment hotspot?

Yields

For buy-to-let investors seeking income, the research reveals a correlation between low rental yield and investment inefficiency.

Leeds for example had the highest yield of all 100 towns and cities with 6.92% and came in fourth overall. Four other regions featured in the top ten yielding locations and the ten best places to become a landlord overall.

This trend is the same at the other end of the market, with six of the most challenging areas to profit from buy-to-let amongst the ten lowest yielding regions.

Divide

Dan Gandesha, founder of property investment marketplace Property Partner, noted: ‘What our research reveals is a clear North-South divide in the investment opportunities facing buy-to-let landlords. We have always been at pains to point out to investors that prime locations such as Kensington and Chelsea can offer some of the lowest yields available, because prices have raced ahead while rents have failed to keep pace. It just goes to show, you shouldn’t always follow the crowd and the right investment could be on your doorstep where there is far less overall demand.’[1]

[1] http://www.propertyreporter.co.uk/landlords/could-stoke-on-trent-be-the-uks-next-btl-sweet-spot.html

 

 

Right to Rent affecting those with no passport

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

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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

 

 

Is it, ‘business as usual’ for the housing market?

Published On: June 13, 2017 at 11:55 am

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Last week’s shock General Election result has plunged the country into more uncertainty, with many peers concerned about the immediate future of the housing market in Britain.

Following Prime Minister May losing her Commons majority and with subsequent talks with the DUP ongoing, many observers are suggesting her days as PM are numbered.

‘Business as Usual’

However, despite the uncertainty, one leading housebuilder has suggested that there should be no reason why it shouldn’t be ‘business as usual’ for the housing market.

John Elliot, Managing Director of Millwood Designer Homes, predicted a Tory landslide. Instead, he was left to rue the result and is worried about the, ‘uncertainty it now brings for the future of the country and the Brexit negotiations.’[1]

Despite this, he maintains that the housing market should look to continue as usual.

Is it, 'business as usual' for the housing market?

Is it, ‘business as usual’ for the housing market?

Elliot observed: ‘Even though it’s early days, as far as I am aware, Theresa May will remain Prime Minister. I have not seen anything other than the statement issued by Downing Street to suggest otherwise and I can’t see this making much difference to our industry, as it stands. People still need homes and we need to keep building.’[1]

‘Had Corbyn been allowed to introduce the ‘garden tax’, I think that would have had a detrimental effect on the market, alongside his other polices on taxation,’ he continued.[1]

Concluding, he noted: ‘If Theresa May were to step down now, I am not sure who the best candidate it to lead the party and the country. My personal view, is that the one bit of stability should remain, is if Theresa May remains in office and continues to negotiate a good deal for the UK’s exit from the EU, and forges ahead with her policy to  build a million new homes between now and 2020, and another 500,000 by 2022.’[1]

[1] https://www.propertyinvestortoday.co.uk/breaking-news/2017/6/business-as-usual-for-uk-housing-industry-despite-election-uncertainty

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.