Posts with tag: landlords

Landlords and tenants leaving lettings market in London

Published On: January 19, 2017 at 2:51 pm

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Demand from tenants in the residential lettings market in London is possibly slowing down, with landlords looking outside of the city for greater yielding investment.

A report from the National Landlords Association revealed that the number of landlords reporting a rise in tenant demand during the final quarter of 2016 fell by nearly 30% points. This was in comparison to the same period 2015.

South East Rises

Findings from the report also show that 40% of landlords in the South East saw a rise in tenant demand during the period. This was the highest recorded in the UK, which, the NLA suggests, shows more tenants are looking outside of London for more affordable accommodation.

What’s more, the firm points out that the drop in rental demand in central London coincides with a more conservative approach from landlords looking to purchase in London during the coming months.

Just 5% of landlords operating in London said that they plan to purchase in the next three months, the lowest across all regions and down by 15% from one year ago.

Landlords and tenants leaving lettings market in London

Landlords and tenants leaving lettings market in London

Northern Highs

In comparison, the number of landlords operating in the North East planning to purchase in the next three months has nearly doubled, from 10% in 2015 to 19% last year.

Landlords in Yorkshire have also expressed a desire to buy, up from 10% during 2015 to 16% in 2016.

Carolyn Uphill, chairman of the NLA, noted: ‘It looks like central London is simply becoming too expensive for most people, regardless of whether you want to buy, invest or rent.’[1]

‘For many tenants the practical solution of moving out of the city to more affordable suburbs with good transport links is becoming increasingly appealing. In turn, it seems that landlords have been quick to respond, turning their backs on the capital and looking to other areas where the upfront cost of acquiring property is lower, and the potential yields to be had are higher,’ Uphill added.[1]

[1] http://www.propertywire.com/news/uk/landlords-tenants-leaving-lettings-market-central-london-costs-rise/

Is inflation a bigger threat than Brexit?

Published On: January 18, 2017 at 2:19 pm

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A leading estate agent has moved to express his view that inflation is a bigger threat to the confidence of the housing market than Brexit.

In a statement, former RICS residential chairman and London estate agent Jeremy Leaf, said: ‘If the cost of everything is going up, people feel poorer and less inclined to take on further debt. With the housing market it always comes down to confidence and if people see bad news, they tend to overreact, sit on their hands and do nothing.’[1

Announcement

The statement from Mr Leaf comes on the heels of an announcement that inflation has risen to 1.6%, the highest for 18 months. This increase was larger than expected and was attributed to the effects of the fall of Sterling since Britain decided to leave the EU.

Leaf’s comments also came after the ONS released its figures for house price rises over the year to November.

Is inflation a bigger threat than Brexit?

Is inflation a bigger threat than Brexit?

According to this report, prices increased by an average of 6.7%, up from 6.4% in October.

The average price of a property in the UK was £218,000, £14,000 greater than November 2015 and £2,000 more than in October. The average price of a property in England is now £234,000.

Wales saw prices increase by 4.1% in the same period to £147,000 and in Scotland, by 3.3% to hit £143,000.

‘The house price index findings are not too surprising because … they are a little bit historic. We expect to see some moderation in price growth in future as we have already seen on the ground in the past month or so. Shortage of stock and increased nervousness is showing itself in only slightly higher prices and lower activity,’ Leaf concluded.[2]

[1] https://www.estateagenttoday.co.uk/breaking-news/2017/1/inflation-bigger-problem-for-housing-market-than-brexit-claims-top-agent

Buy-to-let activity down by 26% year-on-year

Published On: January 17, 2017 at 9:59 am

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The latest research from Connells Survey & Valuation suggests that the buy-to-let sector is struggling.

Data from the report indicates valuations were down by 26% over the course of the last year, following a year full of significant legislative alterations.

Rises

Despite the slowdown seen in the buy-to-let sector, overall housing market activity during December 2016 was up by 8% on December 2015. What’s more, activity was 40% up from December 2014.

John Bagshaw, corporate services director of Connells Survey & Valuation, observed: ‘Looking back over the year, the market has regained a great deal of its strength with consumers’ confidence on the mend.’[1]

‘Rates are low and employment is high-that’s a great recipe for a healthy housing market. And the buy-to-let market’s loss has been owner-occupiers gain as those looking to get on the ladder or trade-up have been left facing less competition for the properties they want to buy,’ he added.[1]

Selling

Valuations for those selling property rose by 25% between December 2015 and December 2016. During the same period, valuation activity for those looking to remortgage rose by 19%.

Continuing, Bagshaw said: ‘The housing market has been recovering since September and had a great December. Compared to 2015 it looks good. Compared to December 2014 it looks exceptional. First-time buyers and people selling property have regained much of the confidence they lost in the wake of the Brexit vote.’[1]

Buy-to-let activity down by 26% year-on-year

Buy-to-let activity down by 26% year-on-year

‘With interest rates still at record lows, many buyers are taking the opportunity to buy property that would have been regarded as a bargain at that price just of a couple of years ago.’[1]

According to the report, the number of property sellers was up by 32% over the course of the year. In addition, remortgage activity was up by 68% as consumers have taken advantage of some very cheap mortgage deals.

Concluding, Mr Bagshaw noted: ‘Looking back over the year, the market has regained a great deal of its strength with consumers’ confidence on the mend. Rates are low and employment is high –that’s a great recipe for a healthy housing market.’[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2017/1/buy-to-let-markets-loss-has-been-owner-occupiers-gain

 

Where are 2017’s buy-to-let hotspots?

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

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A new investigation has revealed the latest UK buy-to-let hotspots, which include Manchester, Leeds, Cardiff and Liverpool.

Of course, the key to buy-to-let investment is to secure a solid rental yield and potential for capital growth through increased house price values.

Hotspots

Data from Aspen Wolf has revealed the latest buy-to-let hotspots to be in these locations. Oliver Ramsden, founder and director of Aspen Wolf, noted: ‘The UK property market stayed strong in 2016 despite a turbulent year, with confidence remaining in the buy-to-let sector in particular.’[1]

‘Rental growth increased but at a slower rate than 2015; this was to be expected however, notably due to the unexpected Brexit result stalling market movement for a short period,’ he continued.[1]

Mr Ramsden went on to say: ‘House prices should start to increase above the 3% mark again in 2017, especially in buy-to-let hotspots which we have identified.’[1]

The top-ten best buy-to-let postcodes were found to be:

Postcode Area Area Average value of property Number of sales in the last 12 months Current average asking price Current average rental price (pcm) Buy to let yield (%)
M Manchester £177,686 11625 £202,484 £1,339 7.94
CF Cardiff £187,337 12356 £173,850 £1,054 7.28
LS Leeds £225,551 10339 £204,072 £1,217 7.16
L Liverpool £164,590 6859 £175,641 £1,027 7.02
WS Walsall £195,383 4995 £193,944 £1,106 6.84
NE Newcastle upon Tyne £184,224 12850 £173,666 £873 6.03
S Sheffield £194,673 6693 £180,126 £888 5.92
G Glasgow £182,716 16454 £165,046 £786 5.71
B Birmingham £189,898 10396 £203,990 £921 5.42
SR Sunderland £134,891 2282 £133,028 £587 5.3
Where are 2017's buy-to-let hotspots?

Where are 2017’s buy-to-let hotspots?


Weak

On the other hand, London’s letting market slowed last year, with rents peaking during April.

Ramsden observed: ‘We forecast this trend to continue, especially within prime central London hence have identified West Central London or the WC postcode, as the top UK location to avoid in 2017.’[1]

The worst locations in terms of rental yields were found to be:

Postcode Area Area Average value of property Number of sales in the last 12 months Current average asking price Current average rental price (pcm) Buy to let yield (%)
WC Western Central London £936,660 Not available £1,486,208 £2,877 2.32
BR Bromley £547,661 4121 £633,812 £1,287 2.44
LD Llandrindod Wells £215,894 556 £247,659 £514 2.49
WD Watford £563,462 3147 £678,837 £1,452 2.57
SG Stevenage £414,561 5972 £476,816 £1,053 2.65
HR Hereford £267,871 2217 £306,503 £692 2.71
AL St Albans £595,386 3271 £667,922 £1,521 2.73
CB Cambridge £416,239 5322 £446,454 £1,020 2.74
EX Exeter £290,770 9139 £315,125 £736 2.8
WR Worcester £281,073 4254 £288,729 £674 2.8


[1] https://www.landlordtoday.co.uk/breaking-news/2017/1/the-best-and-worst-postcodes-for-buy-to-let-returns-unveiled

Property campaigner has started ‘stolen deposits totaliser’

Published On: January 13, 2017 at 2:48 pm

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Categories: Landlord News

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Long-time anti-deposit campaigner Ajay Jagota has moved to compile what he has coined a ‘stolen deposits totaliser.’ Mr Jagota says that this will keep tabs on how much rogue letting agents have been convicted of stealing in 2017.

Rogue Agents

The first example of 2017 came this week when Julie Feilden admitted 13 counts of theft by employee at South East Suffolk Magistrates. This came after she stole almost £16,000 from her former employer, Smith Gore.

In her role as lettings administrator, Feilden was responsible for taking deposits from tenants and placing them in Government approved tenancy deposit schemes. However, she stole various amounts, ranging from £450 to £3012 between March 2010 and September 2015.

The business was subsequently acquired by Savills and was a member of industry body ARLA and subject to annual auditing.

Research from Mr Jagota revealed over £1m worth of deposits were stolen during 2016, with at least one landlord or letting agent convicted per month.

Scandal

Mr Jagota, founder of deposit-free renting solution Dlighted, noted: ‘2.4bn of the UK’s £3.2bn rental deposits are held by lettings agents, with next-to-no supervision over what happens to that money. It’s far too easy for this money to be used illegally or inappropriately and this is a huge scandal waiting to happen.’[1]

‘The worst part is, this is just the tip of the iceberg and this is not just about a handful of criminals. We’ve even been approached to assist in one major new case which will be coming to light in coming weeks. Deposit money must be placed in a completely ring-fenced account and not touched by the agent or landlord for any business purpose. But there is a common belief in the industry that to do so it completely legitimate and as a result there are doubtless countless otherwise upstanding and honest agents who misappropriating client money by mistake,’ he continued.’[1]

Property campaigner has started 'stolen deposits totaliser'

Property campaigner has started ‘stolen deposits totaliser’

Scrutiny

Jagota went on to say, ‘This is a government-backed system which is subject to no scrutiny at all. Not even the media! We’ve had respected and apparently knowledgeable journalists tell us letting agents can use deposits any way they see fit!’[1]

‘This agency was even a member of ARLA and as such would have been audited annually. But these crimes went on for five years and nothing was uncovered. I’ve tweeted them asking for an explanation but so far nothing has been forthcoming. If landlords and letting agents didn’t take cash deposits these crimes wouldn’t be possible.  And that’s why the deposit system needs urgent reform,’ he concluded.[1]

[1] http://www.propertyreporter.co.uk/landlords/property-campaigner-launches-stolen-deposits-totaliser.html

 

Many amateur landlords in Scotland don’t understand obligations

Published On: January 13, 2017 at 10:00 am

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There are thousands of private landlords in Scotland requiring more support in order to give their tenants a better service, according to housing and homeless charity Shelter Scotland.

Assessing the first year’s work of two Oak Foundation backed pilot projects assisting landlords in the Highlands and Dundee, the charity has concluded that there are too many inexperienced landlords who do not understand their legal obligations.

Guidance

During the last year, Shelter’s private landlord support officers have given information and guidance in 542 cases. They found that most of the landlords receiving help rent out just one property.

In addition, Shelter’s investigation found that many became landlords as a result of a change in their own circumstances. The vast majority wanted to comply with legislation and to do whatever it meant to be a good landlord.

James Battye, Shelter Scotland private renting project manager, observed: ‘It is reasonable to believe that what we have found in Dundee and the Highlands may be well true across Scotland. That means there could be thousands of landlords who don’t have a full grasp of their legal responsibilities.’[1]

‘Shelter Scotland’s Private Landlord Support project has highlighted this gap in support for inexperienced landlords and is creating a template for services that would benefit them and their tenants in the future,’ he continued.[1]

Many amateur landlords in Scotland don't understand obligations

Many amateur landlords in Scotland don’t understand obligations

Expansion

The number of households privately renting has nearly tripled in size since 1999 to provide homes for 350,000 Scottish households. These include 91,000 families with children.

As the Scottish private rental sector continues to grow, it is imperative that landlords are more professional.

Mr Battye noted: ‘Many landlords are finding themselves ill-equipped for managing housing for people in relationship, health or financial crisis.’[1]

‘We will continue to provide the Private Landlord Support Service in the Highlands and Dundee until March 2018 with financial backing from the Oak Foundation. In Dundee the private landlord support officer is based within the council while in the Highlands the support officer is hosted by Lochaber Housing Association. Invaluable support is provided by both local authorities enabling the projects to reach people on the landlord register,’ he concluded.[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2017/1/thousands-of-amateur-landlords-dont-understand-their-legal-responsibilities