Posts with tag: landlords

Buy-to-let lending levels after remortgaging surge

Published On: January 11, 2017 at 10:38 am

Tags: Buy-to-Let,landlords,Mortgage lending,remortgaging

The latest Mortgages for Business report shows that despite remortgaging activity still being most prominent in the buy-to-let market, purchase lending returned to higher levels in the final quarter of 2016.

Buy-to-let

Standard buy-to-let (vanilla) transactions increased from 28% in Q3 to 38% in Q4. In addition, lending for HMO properties rose to 26%. Despite this being below the level seen in Q2 2016, this sees the market return to levels seen before the changes to landlords’ tax relief in 2015.

David Whittaker, CEO of Mortgages for Business said: ‘It is encouraging to see that the share of lending for purchase in the buy to let mortgage market returned to normal in Q4 2016. Following a notable shift towards lending for remortgage in the third quarter, landlords showed they were once again willing to commit to new purchases. The outcome of the EU Referendum, and the subsequent macro-economic uncertainty dampened purchase lending in Q3, with many landlords initially opting for a cautious approach.’[1]

‘While changes to Stamp Duty on second properties and landlords’ tax relief mean that landlords need to approach their investments intelligently, there are still excellent returns to be had in the market – especially compared to other asset classes,’ he continued.[1]

Buy-to-let lending levels after remortgaging surge

Loan to Values

In addition, data from the report shows that the average loan to value (LTV) ratios for all products stayed fairly constant at 67% in Q4 of 2016.

Interestingly, there was a substantial upturn in both the values and loan size for the multi-block unit mortgage market. This was due to the rise in the number of mortgages being taken out on high-value multi-unit properties. 30% of these transactions in the period were for properties valued over £1m.

Concluding, Whittaker said: ‘There is clearly an appetite among investors for more valuable multi-unit blocks, with the lending share of million-pound plus blocks from growing under a fifth in Q3 to almost a third in Q4.’[1]

[1] http://www.propertyreporter.co.uk/landlords/btl-market-settles-after-remortgage-rush.html

Number of buy-to-let products at lowest for 8 years

Published On: January 9, 2017 at 3:04 pm

Author: Em Morley

Categories: Finance News

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

Data released by Moneyfacts has revealed that there has been a substantial fall in buy-to-let product numbers. According to the report, there have been 74 deals taken from the market in the last month.

The report indicates that the total number of live buy-to-let products stood at 1,482 in December, but has slipped to 1,408 this month. Particularly affected was the 75% LTV sector, which saw the total number of products fall from 606 to 540 during the same period.

This said, the number of products is still higher than the 1,256 seen in January.

Number of buy-to-let products at lowest for 8 years

Hit

Charlotte Nelson, Finance Expert at Moneyfacts, observed: ‘The BTL mortgage market took a hit last month, seeing the largest reduction in product numbers since March 2009. Usually, the month of December is quiet, with providers gearing up for the holidays. This time, however, the BTL market has seen a surge of activity, with the number of BTL products falling back to July 2016’s levels. Withdrawals have not been limited to just a few providers, either, with the reductions having been spread across the board.’[1]

‘Alongside tougher affordability, major changes to the way in which income from property rentals is taxed will be coming in April. Lenders are perhaps withdrawing products to get back to just their ‘core’ range in an attempt to wait and see what other providers will be doing in the run up to April. 2017 is set to be an uncertain year, which could be a lethal cocktail for landlords, particularly now there are less products on the market. Anyone unsure about their options should seek out a financial adviser,’ she added.[1]

[1] http://www.propertyreporter.co.uk/landlords/btl-market-sees-the-largest-fall-in-products-in-8-years.html

What resolutions do landlords want the Government to make in 2017?

Published On: January 9, 2017 at 11:20 am

Author: Em Morley

Categories: Landlord News

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

A new poll from Landlord Voice on behalf of Simple Landlords Insurance has uncovered what landlords want to see from the Government during 2017.

Number one on landlords’ wish lists for the new year is for the Government to re-think their stance on buy-to-let tax relief for mortgage interest payments.

Tax concerns

Data from the report reveals that the planned tax increases are the major concern for buy-to-let landlords in 2017. 47% of respondents cited these changes as their most prominent worry.

Second on landlords’ wish list would be an end to stamp duty changes, while a reduction in capital gains tax came third.

From April, tax relief on mortgage interest will be gradually phased out and will be fully eradicated by 2020. By then, landlords will be taxed on their income-meaning some will be moved into a higher rate tax bracket.

This said, a separate poll from the Council of Mortgage Lenders revealed that half owned their properties outright and will not be impacted by the changes.

What resolutions do landlords want the Government to make in 2017?

Optimism?

Landlords are undoubtedly under pressure but many are still optimistic about the future. 36% of people questioned said that their confidence level for the year ahead is 8 out of 10 or higher.

88% said they plan to continue as landlords in 2017, with one third planning to increase their portfolios.

Jenny Mayes, of Simple Landlords Insurance, said: ‘We strongly urge Chancellor Philip Hammond to listen to landlords’ concerns. Landlords should be supported and recognised for their contributions in providing affordable housing, rather than burdened with unfair tax measures that will see them having to take considerable cuts to their income and being forced to pass some of this to their tenants.’[1]

[1] http://www.propertyreporter.co.uk/landlords/what-new-year%E2%80%99s-resolution-should-the-government-make.html

Who was closest with their predictions for rental growth in 2016?

Published On: January 9, 2017 at 10:03 am

Author: Em Morley

Categories: Property News

Tags: Buy-to-Let,landlords,rental growth

A sales and lettings firm has conducted interesting research into how accurate predictions made for rental growth by property experts were during 2016.

Surprisingly given the turbulent nature of the last year, many forecasts were actually very close to being correct.

Predictions

The analysis of property market predictions was made by sales and lettings firm KIS and revealed that estate agents Knight Frank were closest with its suggestions.

Knight Frank correctly estimated that the UK annual rent growth for 2016 would stand at 2.3%. Belvoir, Savills and the Royal Institute of Chartered and Surveyors were also fairly close-all predicting a rise of 3%.

Official data from the Office of National Statistics reveal that rents did indeed rise by 2.3% during 2016.

However, KIS’ own analysis of 20 regions in the North East shows that rents in the area rose from an average of £554 in December 2015 to £591-an increase of 5.9%.

The list below shows how many firms and peers suggested rental growth would rise by in the last year:

Knight Frank – 2.3%
• Belvoir – 3%
• Savills – 3%
• Royal Institute of Chartered Surveyors – 3%
• Countrywide – 3.5%
• JLL – 4.5%
• Price Waterhouse Coopers – 5%
• Hamptons -5.5%
• Property Commentator Henry Pryor (interviewed by Zoopla) – 6%

Who was closest with their predictions for rental growth in 2016?

Fantastic forecasting

Ajay Jagota, managing director of KIS Group, noted: ‘If we’ve learned one lesson from 2016 it’s that predicting anything is asking for trouble, but if these figures are anything to go by property experts are doing a much better job of foreseeing the future than professional pollsters do at election time.’[1]

‘The average rent rise prediction in the forecasts we’ve revisited was 3.9%, and although we’re the first to admit that that figure isn’t exactly scientific, it does appear that industry consensus at the start of the year was pretty close to the 3.1% Homelet recorded at the end,’ he continued.[1]

Concluding, Mr Jagota said, ‘A big thing to take away from these figures too is that although rents are rising, they aren’t rising as quickly as even some of the experts think. As things are, the market is giving a good deal to both tenants and investors and policy makers should be cautious about pursuing any measures which could jeopardise that.’[1]

[1] http://www.propertyreporter.co.uk/landlords/last-year%E2%80%99s-rental-predictions-who-got-it-right.html

Landlord told to repay over £39,000

Published On: January 6, 2017 at 2:59 pm

Author: Em Morley

Categories: Finance News

Tags: fire hazards,housing benefit,landlords,rogue landlords

A buy-to-let landlord who failed to gain a licence for a property in London has been told to repay nearly £40,000 after being taken to court by Islington Council.

The Council made the call to reclaim to money it paid to Landhouse Ltd in housing benefits relating to a HMO. This came after the firm admitted to renting out the property without the sufficient HMO licence.

Inspections

Environmental health officers from the council conducted an inspection of the property and found it to be overcrowded and poorly managed. There were a number of fire hazards present throughout the property.

During a hearing at the Property Chamber, London Residential Property First Tier Tribunal, the landlord was told to pay £14,140 in both costs and fines. This was alongside repaying the council £39,022.52 in housing benefits, relating to the period when the flat was rented without a licence.

Landlord told to repay over £39,000

Now, Landhouse Ltd has applied for a licence, but is still liable to repay the benefit, which will be returned to a central Government housing benefit consolidation fund.

Councillor Diarmaid Ward, Islington Council’s executive member for housing and development, said: ‘More and more people rent privately in Islington and we’re committed to helping make sure they have decent homes to live in. We will take action when landlords do not keep within the law and as this case shows the costs can be very significant.’[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2017/1/landlord-ordered-to-repay-39-000-rent

Rise in limited company applications recorded

Published On: January 6, 2017 at 10:55 am

Author: Em Morley

Categories: Finance News

Tags: Buy-to-Let,landlords,limited companies,tax changes

The latest Mortgages for Business’ Limited Company Buy to Let Index shows that a rising number of landlords are looking to incorporate to overcome tax alterations.

Additional Stamp Duty charges for buy-to-let purchases, the phasing out of income tax relief and other changes saw the number of investments from limited companies rise in the final quarter of 2016. These purchases increased by 6% when compared to Q3.

Rises

This figure is substantially higher than the 21% seen before the alterations to tax relief were unveiled in July 2015. This shows that a rising number of buy-to-let landlords are taking action to avoid being stung by the greater tax costs facing them.

By incorporation, landlords can still offset finance costs against rental income.

David Whittaker, managing director of Mortgages for Business, noted: ‘The sharp increase in purchase applications made by landlords using a limited company structure is unsurprisingly given the financial incentive to do so and it is encouragingly to see growing numbers of landlords approaching their investments intelligently.’[1]

‘With the changes to tax relief set to be phased in from April 2017, this trend is unlikely to be reversed any time soon,’ he continued.[1]

Rise in limited company applications recorded

Applications

Despite the growth of the number of applications made via limited companies, lenders catering to this market remained static between the reporting periods. Only 14 offered products to limited companies.

Mr Whittaker concluded by saying: ‘Although many mainstream lenders do not yet have an offering for investors using limited companies, many smaller lenders have significant expertise when it comes to servicing this part of the market.’[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2017/1/sharp-rise-in-limited-company-buy-to-let-applications