Posts with tag: landlords

Where are Buyers and Tenants Moving to? (So Where Should You Invest?)

Published On: February 18, 2016 at 11:27 am

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reform of leasehold

New research from Urban.co.uk has revealed the top places that people in different age groups are moving to in the UK. By analysing the data, landlords may be able to work out where they can buy a profitable investment.

Online estate agent Urban.co.uk has evaluated Office for National Statistics (ONS) internal migration statistics to find out which cities in England and Wales are the most popular to move to.

Birmingham was the only area included in the top ten destinations for all age groups – 18-21, 22-29, 30-64 and over-65s.

Alongside Birmingham, Manchester, Nottingham and Leeds are all becoming increasingly attractive locations compared to London for those aged 18-21.

The 22-29 age group is also heading north, with many favouring Birmingham, Manchester and Leeds over the more traditionally popular London boroughs of Islington and Hackney.

Birmingham was the most popular area to move to for those aged 30-64, while the over-65s prefer greener regions, such as Wiltshire and Cornwall.

The main finding from the study is that young people are increasingly leaving the capital.

The figures found that Birmingham is London’s biggest rival for all of those aged under 65. In the over-30 category, 12,500 home movers relocated to Birmingham during the past year.

For 22-29-year olds, Birmingham was the third most popular city to move to, coming in ahead of previously popular London boroughs such as Tower Hamlets and Southwark.

Birmingham was also in the top five cities for 18-21s, with Leeds, Nottingham and Manchester making up the top three. Over 45,000 youngsters moved to these areas in the last 12 months, indicating affordability pressures and a definite trend of migration towards the north. This may be due to the quality of educational facilities and the student populations of these cities.

The co-founder of Urban.co.uk, Adam Male, says: “The range and quality of educational institutions north of London, in places such as Leeds, Nottingham and Birmingham, have undoubtedly played a large part in attracting more and more young people away from London and its surrounding regions.

Where are buyers and tenants moving to?

Where are buyers and tenants moving to? (So where should you invest?)

“The interesting trend here is that young people appear to be staying in these regions after university and this is something we can expect to see more of in the coming years, due to their lively culture, increasing job opportunities and a competitive property market.”1 

Older generations are choosing more peaceful and greener spots, such as Wiltshire, Cornwall and the East Riding of Yorkshire over London. Birmingham was also included in the top ten for over-65s.

Visit Birmingham’s Emma Gray believes: “People are increasingly seeing our region as an obvious choice to build a career and raise a family, thanks to excellent schools, outstanding connectivity and affordable homes and amenities.”1 

Indeed, compared with London, Birmingham offers a competitive property market.

As first time buyers continue to struggle getting onto the property ladder, house hunters in Birmingham will find that the average house price is a huge £300,000 cheaper than in the capital.

The Birmingham suburb of Moseley Village was even named the best place to live in the UK by the Sunday Times, beating Mayfair in London.

Investment in the city, including HS2 and the Curzon Street regeneration, has also boosted Birmingham’s reputation as a business centre, making it a hotspot for start-ups and small businesses, in turn creating more job opportunities and investment potential. The city has been named, for the second time, the most investable city, above prime spots like Madrid, London and Paris, in an annual survey by the Urban Land Institute and PwC.

If you are seeking to invest in buy-to-let and beat the 1st April deadline for an added 3% Stamp Duty, could Birmingham be the best place to do it?

1 http://www.propertyreporter.co.uk/property/where-is-currently-the-most-popular-place-to-move-to-in-the-uk.html

PCL rents drop for first time in two years

Published On: February 17, 2016 at 2:12 pm

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The final quarter of 2015 saw rents drop in the capital for the first time in two years, according to a new report.

Cluttons estate agents has provided data suggesting that average Prime Central London rents dropped by 2% over the year to stand at £1,097 per week.

Falls

In addition, Cluttons claim rents are slipping faster than capital values, with average gross rental yields dropping to 3.16%. Despite this, the firm has reported an increase in buy-to-let activity in an attempt to beat the upcoming stamp duty surcharge.

Regions that have seen the most significant dips in rents include Notting Hill, where they slipped by 6.4%, Hollands Park (4.4%) and Marylebone (3.9%).

PCL rents slip for first two in two years

PCL rents slip for first time in two years

‘Landlords are growing wary of burgeoning supply levels at virtually every price point and are adjusting their rental incomes accordingly,’ said Faisal Durrani, head of research at Cluttons. ‘Furthermore, many tenants don’t realise they’re actually paying less than their predecessors in many cases. Some landlords are on the back foot and have been slow to adjust to the evolving conditions and are now undercutting one another to secure tenants,’ Durrani continued.[1]

Stamp Duty changes

James Hyman, Cluttons’ head of residential agency, noted, ‘in the lead up to any tax changes, there is always an increase in activity and the looming SDLT changes are no different, which we expect will become more evident in the coming weeks.’[2]

To this end, Cluttons has forecasted a reduction of the lettings market during 2016, but a growth of more than 16% before 2020.

[1] https://www.lettingagenttoday.co.uk/breaking-news/2016/2/prime-central-london-rents-fall-for-the-first-time-since-2013

Young, would-be homeowners stuck in rental properties

Published On: February 17, 2016 at 10:22 am

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A think tank has presented a gloomy outlook for would-be homeowners looking to take their first steps onto the property ladder. It claims that most working households on average incomes will be forced to rent for the indefinite future.

Analysis from the independent Resolution Foundation body indicates that for this group, home ownership will approach just one-in-ten by 2025.

Decline

With the largest decline in young families owning property is for those on modest incomes, it has also slipped for those that are on benefits and on higher incomes.

As a result of this, home ownership is becoming more and more the domain of older and wealthier households.

Data from the analysis shows that those aged 65 or older now make up 32% of all homeowners. By contrast, those aged between 18 and 34 account for just 10%, down from 19% in 1998.

In addition, under 35 modest income working households have also recorded sharp declines. Homeownership has dropped from 57% in 1998 to 25% at present. In contrast, levels of private renting have more than doubled, from 22% to 53%.

Young, would-be homeowners stuck in rental properties

Young, would-be homeowners stuck in rental properties

Capital pains

This decline is more harshly felt in London, where the proportion of younger people on modest incomes owning their own property have fallen to 13% over the last ten years. This is a drop of more than 50%.

Should this trend continue in the capital, young homeowners on modest incomes would slip to less than one-in-twenty by 2025.

Nationally, homeownership currently stands at around 63%.

‘With the average modest income household having to spend 22 years to raise the money needed for a typical first time buyer deposit-up from just three years in the mid-1990’s-it’s no surprise that owning is increasingly a pipe dream for many,’ observed Matt Whittaker, chief economist at the Resolution Foundation.[1]

‘Schemes such as Help To Buy can only ever help a minority-often providing a leg-up to those who would eventually climb onto the housing ladder anyway. More than half of those benefiting from Help To Buy to date have household incomes in excess of £40,000. It is hard to imagine any way out of the home ownership crisis facing those on low to middle incomes that doesn’t involve significantly boosting house building,’ Whittaker added.[1]

[1] https://www.lettingagenttoday.co.uk/breaking-news/2016/2/figures-show-why-private-rental-sector-is-dominated-by-young-tenants

 

New mortgage range launched at Accord

Published On: February 16, 2016 at 12:30 pm

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Categories: Finance News

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A new mortgage range has today been announced at Accord Mortgages.

The firm has brought in a new five-year fixed rate residential range. This includes the option of extra incentives on selected products.

Options

This new range is available to borrowers with a 25% or 20% deposit and all come with a fee of £845. The range is available for purchase or remortgage and comes with reductions of up to 0.65% on currently available five-year options.

Products start from 2.49% at 75% LTV, rising to 3.39% up to 90% LTV.

New mortgage range launched at Accord

New mortgage range launched at Accord

Those borrowers looking to buy a home with a 5% deposit can get a 4.49% five-year fixed rate mortgage. This is available with no product fee and £750 cashback on completion and free standard valuation. Additionally, first-time buyers will get a further £500 cashback on completion, bringing the total cashback on offer to £1,250

What’s more, there are also reductions on Accord’s three-year fixed mortgage range, with incentives for those able to raise a 20% or 25% deposit.

Value

David Robinson, National Intermediary Sales Manager at Accord, said, ‘we are always looking at ways to offer borrowers value for money and we believe that these mortgages will prove very attractive to those customers who are looking for a competitive rate with the security of knowing what the exact repayments will be for the next five years.’[1]

‘We believe these changes provide borrowers with a wide range of competitive options and will prove extremely popular with brokers,’ Robinson added.

 

 

House prices up 6.7% in year to December

Published On: February 16, 2016 at 11:42 am

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The most recent ONS data on house prices in Britain indicate a rise in values in the year to December 2015.

However, the 6.7% annual rise recorded was down from the 7.7% seen in November of the same year.

Additionally, the report shows that annual house price inflation stood at 7.3% in England, 1.0% in Wales, -0.2% in Scotland and 1.5% in Northern Ireland.

Drivers

Data from the report shows that yearly price increases in England were driven by rises in the East (9.7%), London (9.4%), and the South East (8.8%). Taking out London and the South East, prices have risen by 5.1% in the year to December 2015.

Also, prices paid for property in December were 6.4% higher on average than in December 2014. Owner-occupiers saw prices increase by 6.9% over the same period.

Paul Smith, CEO of haart estate agents, said that, ‘today’s data displays another considerable annual uplift in average house prices across the UK, in part driven by increased levels of competition at the end of last year as buy-to-let investors sought to complete on their second home purchase in anticipation of the 3% stamp duty surcharge coming into effect in April.‘[1]

‘As we reach mid-February there is little chance of any investor, especially where the transaction is part of property chain, being able to complete by April and as a result this market anomaly is tailing away,’ Smith continued.[1]

Healthy

Smith went on to say however that, ‘we are still seeing healthy levels of activity in the property market, across both sales and lettings. One of the ongoing problems last year was a shortage of homes, coupled with a high appetite for home ownership, but the New Year has brought with it enhanced levels of activity and the volume of properties put up for sale has increased 5% annually.’[1]

House prices up 6.7% in year to December

House prices up 6.7% in year to December

He believes, ‘the biggest hurdle to an efficient market is a shortage of professional skills,’ and says, ‘we are finding there are not enough specialists such as surveyors and lawyers to cope effectively with the renewed levels of activity and professional bodies must implement ways of encouraging more talented people into their fields.’[1]

Mismatch

Richard Sexton, director of chartered surveyor e.surv, observed, ‘there seems to be something of a mismatch within the UK housing market at the minute. Mortgage lending remains healthy, reaching its highest peak in nine years in January. A buy-to-let rush to beat April’s stamp duty changes, is part of this story, spurring a notable lending lift.’[1]

‘Buyers prospects appears healthy too. With low inflation, rising employment and wages boosting savings, potential home-movers should have more options in the housing stakes and be in a better position to pick and choose. But while lending and personal finances aren’t holding aspiring homeowners back-rising prices certainly are,’ he added.[1]

Solving the problems

Concluding, Mr Sexton noted, ‘for these prices to be fully tackled, supply problems need to be confronted. And crucially, more people need to be encouraged to move. Stamp duty costs, lack of stock and higher prices are deterrents to would-be purchasers. As a result, people are widening their search areas and seeking out new potential locations-leading to increased popularity in the East and South East. The appeal of these areas will only grow as those locked out of London look elsewhere.’[1]

[1] http://www.propertyreporter.co.uk/property/uk-house-prices-gain-67-says-ons.html

 

Housing benefit changes to drive young out of market?

Published On: February 15, 2016 at 11:38 am

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A recent investigation has indicated that landlords feel Government changes to cut housing benefit from 18-21 year olds will make it far more difficult for them to get into rented accommodation.

The survey of over 1,000 landlords conducted by the Residential Landlords Association found that 76% of landlords would be reluctant to let to this age group. This is due to concerns over their ability to pay rents.

Negative Effects

In addition, data from the investigation shows the potential negative effects of the proposed benefit cap. 65% of landlords were reluctant to let their properties to tenants of working age on benefits, as the changes could alter their cash flow.

Those under 35 also face issues accessing rental accommodation. Since 2012, people in this age group have only been able to claim benefit for a room in a shared home. 53% said that they would not renew such tenancies, again over fears of missed or delayed payments.

Government statistics reveal that in 2013/14, 48% of all households aged between 25-34 were in the private rented sector.

Housing benefit changes to drive young out of market?

Housing benefit changes to drive young out of market?

‘Risky’

Vice-chairman of the RLA, Chris Town, noted, ‘the results confirm that reforms to housing benefit are making it increasingly risky for landlords to rent to those receiving it. Rented housing is crucial to enabling young people to quickly access work opportunities wherever they might be. By making it more difficult for them to secure rental properties Ministers are making work prospects increasingly difficult for them.’[1]

‘A simple solution would be to give tenants the option of having payments of the housing element of Universal Credit paid directly to the landlords. This would give all tenants and landlords the security of knowing the rent has been paid,’ Town added.[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2016/2/young-will-be-pushed-out-of-rented-housing