Posts with tag: landlords

Landlords in London being more strategic

Published On: May 15, 2017 at 9:09 am

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The raft of recent tax changes is making it harder than ever for landlords to make substantial returns from their buy-to-let investment.

Despite this, a new report has revealed that investment in the private rental sector continues to increase in London.

Purchasing

Following a slight lull in activity following the introduction of the 3% stamp duty surcharge on additional properties, an investigation from Benham & Reeves Residential Lettings suggests that landlords are now looking to add to their portfolios.

In addition, the findings suggest that the majority of landlords are undeterred from the phasing out of mortgage interest relief.

Marc von Grundherr, lettings director at Benham & Reeves, observed: ‘Predictions that a flood of landlords will abandon their buy to let portfolios have been greatly exaggerated. In fact, we have seen very few clients exit the rental market this year – in fact most are actively looking to invest further.’[1]

Landlords in London being more strategic

Landlords in London being more strategic

Costs

The Government’s alteration to mortgage interest tax relief is expected to result in rent increases for tenants, with landlords left with little option but to pass on some of these increased costs.

However, Mr von Grundherr notes that strong demand for rental property is putting pressure on rents. Benham & Reeves saw a rise of 12.7% in lettings transactions during the first quarter of the year, in comparison to the same period in 2016.

Continuing, he said: ‘Property continues to remain a very stable investment in light of stock market volatility and historically low interest rates. The fundamentals continue to remain strong and that is why our outlook on London property continues to be bullish.’[1]

‘Professional investors have been able to navigate these legislation changes and capitalise on these localised rental hotspots,’ he concluded.[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2017/5/landlords-adopting-a-more-strategic-approach-to-investing-in-londons-btl-market

 

Rugby Borough Council bans landlord

Published On: May 12, 2017 at 2:57 pm

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A rogue landlord from Rugby who rented out rooms above a bar in the town centre has been banned from being a landlord, after he put the lives of his tenants at risk.

Mr Dean Dunkley was additionally handed a £41,000 legal bill from magistrates after being found guilty of a number of offences. These included obstructing the investigation carried out by the Ruby Borough Council’s housing enforcement team.

Bars

Mr Dunkley was responsible for running AJ’s bar, a four-storey building located in Dunchurch Road.

He was fined almost £5,000 in April 2016, after pleading guilty to 25 offences under the Housing Act 200. This prosecution was brought about by the council after an inspection of the property uncovered numerous safety breaches.

Following this prosecution, Rugby Council’s housing enforcement team was given a warrant to carry out a further inspection of the property in August.

Upon inspection, a housing enforcement officer discovered a range of issues, including:

  • faulty fire doors
  • broken electrical sockets
  • holes in windows
  • fridges obstructing emergency exits
  • broken emergency lighting

Rents

At the time of the inspection, Dunkley was raking in around £820 per week in rents.

In all, he was found guilty of 19 charges and fined £39,000, including 8,000 for operating a HMO without a licence. What’s more, he was ordered to pay £2,264 in costs and a victim surcharge of £170.

Rugby Borough Council bans landlord

Rugby Borough Council bans landlord

Mr Dunkley was subsequently issued with a Criminal Behaviour Order, banning him from being involved in letting or managing a residential property for rent in the borough until May 2019.

Standards

After the hearing, Sean Lawson, Ruby Borough Council’s head of environment and public realm, observed: ‘We’re happy to work with landlords to explain the legislation surrounding HMOs and offer advice on work which needs to be carried out in order for a property to meet safety standards.’[1]

‘But our priority has to be the safety of tenants and, when a landlord shows complete contempt for the law, we have no hesitation in taking the case to court.’ (1)

‘The severity of the fines imposed by magistrates in this case, together with the issuing of a Criminal Behaviour Order, shows no landlord can afford to cut corners when it comes to ensuring the safety of tenants.’ (1)

[1] Mike Green, Rugby Borough Council: Rugby man handed landlord ban after putting lives of tenants at risk, Press Release, 12.05.17

Rents in Tyne and Wear are rising

Published On: May 12, 2017 at 11:54 am

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Recent data released by North-East based property firm KIS reveals that the average monthly cost of renting a property on the Metro Map in the region is £596.

This is £25 more expensive than in December.

Regional Rents

Data from the research shows that Tynemouth is the most expensive place in which to rent in the region, outside of central Newcastle. Rents here total £1,192 per month on average, followed by South Gosforth (£828) and Ilford Road (£762).

On the other hand, Tyne Dock in South Tyneside was the cheapest place to rent, at just £400pcm. This was followed by Hadrian Road and Percy Main, where rents stand at £425pcm and £435pcm respectively.

The full Map reveals the average cost of renting a two-bedroom property within half of mile of each of the region’s 60 Metro stations.

Research from KIS shows that excluding central Newcastle, the top five most expensive regions in which to rent in Tyne and Wear per calendar month are:

  • Tynemouth -£1192
  • South Gosforth -£828
  • Ilford Road-£762
  • Jesmond – £741
  • West Jesmond – £737

On the other hand, the five cheapest regions were found to be:

  • Tyne Dock – £400
  • Hadrian Road – £425
  • Percy Main-£ 435
  • Hebburn – £437
  • Jarrow – £454
Rents in Tyne and Wear are rising

Rents in Tyne and Wear are rising

Strength

Ajay Jagota, founder of sales and lettings firm KIS, observed: ‘It’s always fascinating to see this information laid out like this as it really brings it home to you that, for example, a  three minute Metro ride from East Boldon to Brockley Whins saves you almost £1700 a year – the cost of a summer holiday or a significant saving towards a deposit on a house.’[1]

‘Even though these figures are recorded out of curiosity rather than serious analysis, they do showcase the current strength of the North East rental market. Figures this week show that rents in London are falling for the first time since 2009, but on the basis of these figures that is not the case in Tyne and Wear with average rents rising between December and May,’ he continued.[1]

Concluding, Mr Jagota said: ‘As rents rise though, so do tenancy deposits and these figures show indicate that if you want to rent a property on the Metro Map you’ll have to find almost £900 on average for a deposit – and possibly as much as £1800. This money too would surely be better spent on something else.’[1]

[1] http://www.propertyreporter.co.uk/landlords/tyne-and-wear-rents-on-the-rise.html

 

UK property supply falls by 4% in April

Published On: May 12, 2017 at 8:49 am

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The most recent UK Property Supply Index from HouseSimple.com suggests that property supply fell by 4% during April.

According to the report, a combination of poor weather and political uncertainty has put sellers off from marketing their accommodation over the last month.

Factors

Supply dropped by 4% at a time when one would expect the number of new listings to increase.

This could be due to a number of factors, such as the triggering of Article 50, the announcement of the General Election and the particularly cold weather.

The most prominent falls in supply were found in Runcorn, where levels were down by 33.9%. Doncaster also saw significant falls of 31.1%.

In order to compile its Property Supply Index, HouseSimple assessed data from over 500,000 listed properties to see the number of new properties on the market each month. This data looks at over 100 major towns and cities across the UK and across all London boroughs.

UK property supply falls by 4% in April

UK property supply falls by 4% in April

Capital Rises

In London, supply increased by 1.5% during April, though there were variances across boroughs. For example, Lewisham saw new listings rise by 76%, whereas Haringey saw supply slide by 21.2%.

Alex Gosling, CEO of online estate agents HouseSimple.com, noted: ‘The property market doesn’t like uncertainty and triggering Article 50 and announcing a snap General Election shortly after is a huge amount of uncertainty for sellers to digest. The good news for the property market is that this Election doesn’t appear to be a close-run affair so it’s likely that any negative impact on the property market will be short-lived.’[1]

‘If the market is a little slower up until the General Election on June 8, then it’s likely after the result is known, there will be a boost in supply, with sellers looking to find buyers before the summer kicks in and everyone heads off on holiday. But if sellers need to move then they shouldn’t hold off until after the Election hoping that market conditions will change radically after the result,’ Gosling added.[1]

[1] http://www.propertyreporter.co.uk/property/property-supply-fell-4-in-april.html

 

Demand from UK buyers falls in opening months of 2017

Published On: May 10, 2017 at 4:22 pm

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Demand for property in the UK has slipped since the start of the year, with Wales seeing the largest fall, according to the most recent report from eMoov.

The report shows that demand from buyers is presently 33.8%- a fall of 17.56% since the end of 2016.

By UK country, demand stands at 39.4% in England, 36.18% in Scotland and by 27.35% in Wales.

Highest Demand

The eMoov index measures demand in 150 towns and cities and shows that the greatest levels of demand were in Rugby, Portsmouth and Bristol, standing at 68.29%, 66.7% and 64.43% respectively.

On the other hand, the lowest demand was found to be in Aberdeen (14.11%), Hartlepool (15.43%) and Middlesbrough (19.15%).

In 2017 to date, Stoke-on-Trent (82.25%), Stockton-on-Tees (77.5%) and Walsall (65.09%) have seen the greatest increases in buyer demand.

However, demand has been steadily falling in London commuter towns and cities. Guildford, Watford and Cambridge saw declines of 35.84%, 35.73% and 29.74%.

Demand from UK buyers falls in opening months of 2017

Demand from UK buyers falls in opening months of 2017

Affordability

Chief executive officer of eMoov Russell Quirk, said: ‘With many of the UK’s major cities becoming too expensive for homeowners in the region and travel infrastructure improvements allowing us to live further away from work, it is no surprise that places such as Rugby and Portsmouth have grown in prominence amongst UK buyers. It isn’t just those in London that are looking outside of the larger city boundaries and opting for more affordable towns in the surrounding area.’[1]

Mr Quirk also observed that buyer demand in London is down by 5%. Bexley has seen the most demand at 56.13%, followed by Newham at 51.82% and Havering at 50.51%.

The largest falls in the capital were in Greenwich (-60.83%), Lambeth (-57.62%) and Hounslow (52.69%).

Presently, Westminster has the lowest level of London buyer demand at 10.14%, which was followed by Kensington and Chelsea at 11.49%.

[1] http://www.propertywire.com/news/uk/demand-buyers-uk-falls-first-months-2017/

 

 

Rise in the number of cash property purchases

Published On: May 10, 2017 at 3:33 pm

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There was a substantial rise in the number of home-buyers using cash in order to purchase property in the last year.

In fact, according to the Intermediary Mortgage Lenders Association (IMLA), mortgage lending made its smallest contribution to the financing of property acquisitions since well before the recession.

Falls

The overall percentage of mortgage funds used by buyers fell to 58.2% in the last year- substantially lower than the 76% recorded in 2006. In addition, this was lower than the 65% seen at the onset of the recession in 2008.

This means that the percentage of money spent on residential property in 2016 hit a post-recession high of 41.8%-up from 40.1% one year ago.

In total, £109bn of cash was put into purchases of residential property during the last year- a rise of 12% compared to 2015 and 57% greater than in 2013. This figure significantly outpaced the growth of mortgage lending during the respective corresponding periods.

What’s more, IMLA’s figures indicate that the total value of residential property purchases in Britain hit £261bn during 2016. £152bn of this was provided by mortgage finance.

Rise in the number of cash property purchases

Rise in the number of cash property purchases

Supply

Peter Williams, executive director of IMLA, said: ‘The shift towards cash is partly a consequence of trying to manage housing demand by restricting mortgage supply, with Financial Policy Committee (FPC) actions in 2014 quickly layered on top of the Mortgage Market Review (MMR) affordability rules.’[1]

Continuing, Williams said that he believes existing restrictions on mortgage lending are ‘over-zealous.’

‘The recent housing white paper was a missed opportunity to take strong action on housing supply, and we must hope that the upcoming election manifestos will be used as an opportunity to put that right. For all the focus on the UK’s international standing, Brexit mustn’t blind the next government from problems brewing on its own doorstep which will drive an increasingly bigger wedge between different elements of society and block those without family financiers from having access to home ownership,’ he concluded.[1]

[1] https://www.propertyinvestortoday.co.uk/breaking-news/2017/5/rise-in-cash-buyers-due-to-over-zealous-lending-rules