Posts with tag: landlords

£1.4bn in Build to Rent investment this week

Published On: January 29, 2016 at 10:21 am

Tags: build to rent,build to rent sector,Buy-to-Let,landlords

The upcoming Build to Rent scheme has received a staggering £1.45bn worth of investment in this week alone.

Build to Rent, where institutions both fund and manage specifically built rental accommodation, is seen by many observers as a government-backed scheme to improve the standards of British lettings.

However, many within the industry are concerned that this will reduce the importance of buy-to-let investors.

Worries

Grainger PLC, Britain’s largest listed residential landlord, is the latest investor in the scheme and says it is going to spend around £850m on Build to Rent by 2020.

Helen Gordon, the new chief executive of Grainger Plc, said, ‘it is clear that swift and decisive action is required to capitalise on the compelling market opportunity and to enable Grainger to realise its potential of being the UK’s leading private landlord.’[1]

The firm’s latest trading statement to the City seems to suggest a restructuring of Grainger, to make sure it can obtain a share of the ever expanding Build to Rent Market.

Additionally, the company says it will, ‘re-allocate development team resources to deliver new PRS stock,’ and, ‘refocus the acquisitions team to improve access and conversion of PRS opportunities.’[1]

£1.4bn in Build to Rent investment this week

Statement Of Intent

Grainger’s trading statement also says, ‘as we look out to 2020, our PRS- led strategic targets are:’

invest over £850m into PRS assets to drive rental income growth
net rents and income to more than cover overheads, expenses and financing costs;
net rental income to exceed profit from sales
dividend will increase, reflecting the greater proportion of rental income

Just last weekend, Gordon said that Grainger’s Build To Rent offer would include tenancies ranging from six months to three years In length.

[1]https://www.lettingagenttoday.co.uk/breaking-news/2016/1/build-to-rent-is-coming–1-4-billion-in-investment-this-week

Evicted tenants should be compensated-Generation Rent

Published On: January 28, 2016 at 11:47 am

Author: Em Morley

Categories: Landlord News

Tags: Buy-to-Let,Generation Rent,landlords,rental market,tenants

Generation Rent, the campaign group, has called for another controversial legislation to be added to the sector.

The group is asking for tenants who have been served notice to leave a property to be fully compensated by their landlord or letting agent.

Faultless

A lack of stability in privately rented housing means that more than one quarter of tenants could expect to lose their homes, through no fault of their own.

An investigation by BMG research found that 27% of current and previous tenants had been evicted by a landlord who wanted to either sell, refurbish or change the usage of a property. Another reason for eviction was found to be an unaffordable rent increase.

The most common reason for tenants losing a home was the landlord deciding to sell up (14%.) This was followed by 7% who said that soaring rents had forced them out.

However, 51% of respondents said that they were not aware that private landlords can evict tenants without giving a reason. 63% of people questioned said that private tenants, who had not broken the terms of their agreement, should be allowed to stay in their property.

Evicted tenants should be compensated-Generation Rent

Compensation

66% feel that abiding tenants forced out of their home should be compensated for the cost of moving to their new property, including 80% of private renters. 75% believe private landlords should be banned from raising their rents by more than the rate of inflation.

With the Housing Bill slowly passing through Parliament, Generation Rent has called on the Government to adapt the eviction law in order to prevent honest tenants who face losing their property a right to compensation. This, the group feels, will also deter landlords from evicting tenants in the first place.

‘Every time a renter moves home they spin the roulette wheel,’ notes Betsy Dillner, director of Generation Rent. ‘They might well get a good landlord who values long-term tenants, but this poll suggests that one in four of us will end up with a bad one sooner or later.’[1]

‘With increasing numbers of us facing a lifetime of renting, we need to be able to call the place we live a home and we can’t until the Government ends unfair evictions,’ she added.[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2016/1/generation-rent-calling-for-compensation-for-evicted-tenants

BTL lending at Paragon up 80% in Q4 of 2015

Published On: January 28, 2016 at 10:24 am

Author: Em Morley

Categories: Finance News

Tags: Buy-to-Let,buy-to-let landlords,landlords,paragon mortgages

New figures released by Paragon Mortgages suggests that investors are looking to purchase property before the tax changes in April.

The lender said in the final quarter of 2015, its lending to buy-to-let landlords nearly doubled. Mortgages for rental accommodation reached £401m, a rise of 80.6% on the same period in 2014.

What’s more, Paragon’s pipeline of future loans rose by 43% to hit £595.7m.

Profitable

This fantastic quarterly performance was a key feature in Paragon Group making a profit of £35.2m during the period. This was a rise of 14% on the year before.

John Heron, Director of Mortgages at Paragon, said, ‘our buy-to-let business has continued to grow and perform exceptionally well. Whilst over time recent policy developments may cause some softening in the rate of growth of buy-to-let at a market level, demand for private rented housing continues to remain strong and all indications suggest this is only likely to increase in the coming years.’[1]

BTL lending at Paragon up 80% in Q4 of 2015

Sensible

Despite the sudden surge in lending during Q4 of 2015, experts believe that Paragon’s buy-to-let growth will slow at a similar rate. However, Justin Bates, analyst at Liberum, believes the lender has not taken unhealthy risks to aid its quick expansion.

‘I’ve always considered Paragon to be a cautious, sensible lender at that is borne out in the credit quality statistics which are way ahead of industry averages,’ he noted. [2]

‘We see comments on the eye-catching growth rate of 80%, but that is not all new lending on new properties-around 60% of Paragon’s lending is remortgaging activity,’ Bates added.[2]

[1] http://www.propertyreporter.co.uk/landlords/btl-lending-up-80-according-to-paragon.html

[2] http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/12125251/Paragon-Bank-booms-with-80pc-growth-in-buy-to-let.html

Scottish rents rise in December

Published On: January 27, 2016 at 10:08 am

Author: Em Morley

Categories: Landlord News

Tags: landlords,rents,Scotland,Scottish rents,tenants

The most recent Scotland Buy-to-Let Index from Your Move indicates that there was a surprising end of year increase in Scottish rental growth.

Data from the report shows average residential rents north of the border rose by 0.4% in December-the highest monthly rent rise recorded since June. In addition, this was a more substantial rise than the 0.1% in November.

Rises

This increase brought the average monthly rent in Scotland to £548.

Annually, rental growth is also starting to show considerable rises. Year-on-year rental growth had been on the decline since June 2015, where they stood at 3.1%. December however marked an upturn in annual growth, with Scottish rents now on average 2.2% greater than one year ago, up from 1.4% in the twelve months to November.

‘On average, Scottish rents closed the year £12 higher per month than where they started,’ observed Brian Moran, lettings director at Your Move Scotland. He said, ‘that could stack up to a not inconsiderable £144 extra for some tenants over a twelve month contract. As we enter 2016, it’s encouraging news that the majority of Scottish tenants can afford higher rents-and that arrears have dropped for the second month in a row in December.’[1]

Scottish rents rise in December

Reignited

Moran feels that, ‘Scottish rent rises have been ignited again recently by the improvement in wages and the gains made in the jobs market, while the supply shortage continues to fan the flames. Outside of the summer months, the New Year often sees the second biggest cycle of new tenancies and ushers in a busy time for the lettings market.’[1]

‘It’s the period where people typically take up fresh career opportunities and implement new life changes-and this wave is already evident in the uptick of rents over November and December, as savvy tenants act quickly to beat the January rush,’ he continued.[1]

Concluding, Moran noted that, ‘as the year progresses, other artificial factors will come into play. The Scottish Government decision to agree with George Osborne’s extra 3% of duty on the purchase of second homes is likely to distort the natural flow of the market, with any further buy-to-let investment likely to be front-loaded into the early months of the year. Once that deadline passes and if investment into the private rented sector becomes more hesitant, tenants’ rents may become much more exposed to the problem of supply.’[1]

[1] http://www.propertyreporter.co.uk/landlords/scottish-rents-see-end-of-year-surge.html

Right to Buy scheme, ‘will erode housing associations’

Published On: January 26, 2016 at 1:58 pm

Author: Em Morley

Categories: Property News

Tags: government,housing association,housing associations,landlords,right to buy,Right to Rent,tenants

Yesterday saw the Government announce that a pilot for the new Right to Buy scheme was to be trialled in five housing association areas.

As part of the pilot, the first housing association tenants can apply for the Right to Buy scheme, which comes ahead of a nationwide rollout later on in 2016. This follows a voluntary understanding between the Government and National Housing Federation to enlarge the Right to Buy scheme to 1.3 million housing association tenants.

Right to Buy scheme, ‘will erode housing associations’

‘Unfortunate’

However, Stephen Smith, Director of Legal & General Housing Partnerships, described the extension as, ‘unfortunate,’ and believes the scheme will reduce the availability of affordable homes.

Smith also noted on that the scheme, ‘will ultimately erode housing associations’ ability to build homes.’ He believes, ‘this will reduce the number of affordable properties available in the UK when we need a greater supply of housing, not less.’[1]

‘Forcing the sale of homes at a reduced market value will ultimately disrupt a well functioning sector, making it harder for housing associations to allocate resources to housebuilding and more difficult for investors to lend to them. We hope that the Government reconsiders this decision before fully implementing it and instead look to other ways in which to produce affordable housing by focusing on the root cause of the housing crisis and tackling supply side issues,’ he concluded.[1]

[1] http://www.propertyreporter.co.uk/property/government-urged-to-reconsider-right-to-buy-scheme.html

Tenants’ dream features revealed in new survey

Published On: January 25, 2016 at 12:54 pm

Author: Em Morley

Categories: Landlord News

Tags: Buy-to-Let,landlords,rental market,tenants

A good-sized garden. A garage or a driveway to park the car on. The waft of seaside air in the lungs.

These three things have been identified as some of the key features representing tenants’ dream characteristics when renting a home.

Setting

A report by Property Let By Us.com shows that one-third of tenants would like to live in rented accommodation by the sea. 25% wanted a rural setting, with 18% preferring a cul-de-sac. 7% said they wanted a nice housing estate, with 5% wanting to live in a suburban location.

When asked about domestic features, nearly two-third of respondents said that off-road parking was their main desire. However, this feature was beaten by the number of tenants wanting a property with a garage (72%). A good-sized garden (41%), shed (35%), a big kitchen (30%) and superfast broadband (28%) came next in the list of desirable amenities.

Tenants’ dream features revealed in new survey

Surprising

Jane Morris, Managing Director of PropertyLetByUS.com, noted that the survey provided some, ‘interesting findings that might surprise landlords. A property by the sea, or in a rural location, is a dream for many home owners and tenants. Landlords that own properties in these locations, or provide some of these most desired domestic appliances, will be spoilt for choice when finding new tenants.’[1]

Clearly, landlords have the opportunity to enhance their properties and boost their rental income by adding some of these dream domestic features. Superfast broadband for example is becoming widely available and many rural locations are being connected over the next two years. Storage such as sheds and garages is high on the wanted list, especially for families,’ Morris added.[1]

[1] http://www.propertyreporter.co.uk/landlords/what-would-make-a-dream-home-for-a-tenant.html