Posts with tag: property investment

Rise in the Amount of Over-65s Investing in Buy-to-Let Recorded

Published On: May 14, 2019 at 8:50 am

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There has been a notable rise in the amount of over-65s investing in buy-to-let property, according to figures from Commercial Trust.

The mortgage broker has seen borrowers aged between 65-75 increase their share of buy-to-let mortgage applications by 5.43% in 2018, owed in part to the fact that a number of mortgage lenders have recently raised their maximum age at the end of the mortgage term criteria from 75 to 85-years-old, while also pushing up their maximum mortgage terms.

The data from Commercial Trust shows a 4% increase in the proportion of buy-to-let purchases and remortgages from over-55s, who now account for 39% of all buy-to-let mortgage activity.

For purchase-only applications, over-55s were responsible for almost a third (29.7%) of all business in 2018, which is up by 8% year-on-year.

Andrew Turner, the Chief Executive of Commercial Trust, says: “Our look at the age demographics for 2018 buy-to-let mortgage activity suggests that increasing numbers of older people are recognising the potential of buy-to-let investments.

“Our data indicates that many people reaching retirement are choosing to invest in bricks and mortar and the rental market, as a means to fund their retirement years.”

He adds: “Investing in property has the potential to deliver attractive rental yields and achieve capital growth, despite industry changes. I fully expect that the returns fare better than many other forms of investment.”

Are you an older investor who has decided to take the leap into the property market? Let us know what has encouraged you to enter the buy-to-let industry and why you’ve chosen to put money into the private rental sector.

We remind all landlords, whether you’re new to the industry or not, to stay up to date with the latest changes to lettings law, so that you provide safe and comfortable homes for your tenants. 

Average Landlord made £80,000 Profit from Selling Property Last Year

Published On: May 14, 2019 at 8:00 am

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Number of UK buy-to-let businesses increases 2.1%

The average buy-to-let landlord made an £80,000 profit from selling a rental property last year, according to data from Hamptons International.

Unsurprisingly, landlords in London made the most, at an average of £248,120, which is almost three times as much as those selling property outside of the capital.

In 2018, 85% of landlords sold their buy-to-let properties for more than they paid for them, with 15% making a loss.

However, the research, which also found that the average landlord selling up last year owned their property for 9.6 years, revealed that the profit made by landlords was down by £3,660 (4.4%) on 2017, when they made £83,430 on average.

The London landlords that sold last year made £24,000 less than those who sold in the capital in the previous year.

Hamptons International found that the average pre-tax profit earned by a landlord who sold up fell in five out of ten regions between 2017-18, as house price growth slowed.

Landlords who sold their properties in the North East made the smallest average gain last year, of £11,810, which is £4,270 less than in 2017.

Meanwhile, the average gain increased between 2017-18 in the South West (£3,460), East Midlands (£2,020), North West (£400), Yorkshire and the Humber (£4,490), and Wales (£5,340).

Average Landlord made £80,000 Profit from Selling Property Last Year

Landlords selling up in London and the South East were most likely to sell their properties for more than they paid for them, with 96% of investors making a profit in 2018. However, those selling in the North East were least likely to make gains, with 56% making a profit, while 44% made losses.

There were four local authorities across England and Wales where landlords were more likely to sell their buy-to-lets at a loss in 2018 – South Tyneside (49%), Sunderland (48%), Darlington (45%) and Middlesbrough (43%).

With the highest property values and strongest house price growth over the past ten years, it’s no surprise that the top ten local authorities where landlords made the largest gains in 2018 were in London.

Landlords selling in Kensington and Chelsea made the greatest pre-tax profits in 2018, at an average of £1,072,880, having owned their properties for typically 10.6 years.

Outside of the capital, the South Bucks district offered the highest average gain, at £278,310.

Aneisha Beveridge, the Head of Research at Hamptons International, says: “The average landlord who sold their buy-to-let last year did so for nearly £80,000 more than they paid for it. Over the 9.6 years that the average landlord has owned their buy-to-let, house price growth has driven their gains, with prices having risen around 30% over the period. But, given lower expected future house price growth and tighter mortgage regulation, more investors are shifting their focus from capital gains to yields.”

The estate agent also revealed that rent price growth has increased to an average of 2.1% in Great Britain – the highest rate since January 2018 – as the cost of a new let rose to £972 per month.

Rents increased in every region, led by gains in London, which averaged 3.9% year-on-year, followed by the South West (1.8%) and the Midlands (1.6%).

Beveridge adds: “Rental growth accelerated to 2.1% in Great Britain last month – the highest level since January 2018. This was driven by a 3.9% year-on-year increase in London rents.”

Government Issues Guidance for Landlords on their Rights and Responsibilities

Published On: May 13, 2019 at 9:54 am

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Guides for Landlords

At a time when the rules and regulations governing the private rental sector are changing regularly, the Government has tried to provide some clarity, by issuing guidance for landlords on their rights and responsibilities.

This follows a similar guide for private tenants to use.

The guidance for landlords marks a sign of added support for those letting properties in the private rental sector, to encourage investors to set and maintain high living standards.

The private rental sector has become an essential part of the UK housing market, accounting for 4.5m homes in England – this represents around 19% of all housing stock. 

For many landlords, the private rental sector offers a sound business opportunity – if you maintain your properties to a high standard! 

In addition, the relationship between landlords and tenants is essential in making this work. The guidance aims to ensure that both landlords and tenants know their rights and responsibilities, so that their relationship can be professional and positive.

The Government is dedicated to making sure that tenancies get off to a good start and, if issues do arise, they are dealt with quickly and properly. Although the vast majority of tenancies work well, there remains a small minority of rogue landlords who choose not to comply with the law, whose tenants suffer as a result. 

In situations where things do go wrong, the guidance for landlords is there to point you to the laws that apply to you and help you find further guidance on how to deal with the issue. It also helps to avoid these situations in the first place, by ensuring that you are aware of your responsibilities.

Government Issues Guidance for Landlords on their Rights and Responsibilities

The Government has worked in partnership with stakeholders from across the sector to develop the guide, including the Residential Landlords Association (RLA), National Landlords Association (NLA), Shelter and the Chartered Institute of Housing (CIH). 

“This guide is part of the Government’s work to ensure that both tenants and landlords are able to benefit from being part of a flourishing private rented sector,” says Heather Wheeler MP, the Minister for Housing and Homelessness.

The Government accepts that the vast majority of landlords in England provide decent, well-maintained properties for their tenants and are committed to acting in their tenants’ best interests. One of the main aims in producing this guidance for landlords is to foster and encourage these good practices, and to empower landlords to maintain the high standards that most already uphold. 

However, a small minority of landlords let unsafe and substandard housing to their tenants. An even smaller proportion does so knowingly and with criminal intent.

Enforcement should only be targeted at those landlords who are non-compliant or acting illegally. In order to ensure that this is the case, and that good landlords do not get into trouble unwittingly, it is vital that all landlords have a clear understanding of what is involved in providing accommodation that is deemed safe and fit for human habitation.

This guidance for landlords provides the information that you will need to maintain good standards and also makes sure that you know what the consequences are of not meeting your legal requirements.

Information on the following areas is included in the guide:

  • Licensing obligations
  • Legal requirements
  • Landlord responsibilities, including the upcoming tenant fees ban
  • Issues with a tenancy

Read the full guidelines here.

In addition, you can refer to the Government’s How to Let guide, which is available here.

‘The Landlord’s Friend’: Paul Shamplina and Kate Faulkner Release Latest Edition of their Property Investment Book

Published On: May 10, 2019 at 9:36 am

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‘The Landlord’s Friend’: Paul Shamplina and Kate Faulkner Release Latest Edition of their Property Investment Book

With over 170 pieces of landlord legislation in place, we are grateful to have experts such as Paul Shamplina and Kate Faulkner to guide us through the world of property investment.

Originally launched in 2015, the property professionals have revised its content and released an updated version. The book aims to help both novice and seasoned landlords with navigating their way through the ever-changing private rental sector (PRS).

Paul Shamplina’s own experience comes from being a landlord and eviction specialist, and is featured on Channel 5’s ‘Bad Tenants, Rogue Landlords’. He has spent over 25 years in the industry and is the Founder of Landlord Action.

Kate Faulkner is the author of a number of Which? property books and is considered to be one of the UK’s leading buy-to-let experts. She appears regularly in the media, discussing the property market and current issues that affect investors.

From those looking into making their first investment, to experienced landlords, the book is there to help all looking for buy-to-let information. It comprises of 50 chapters in total, which are divided into three sections:

1.    Preparing got successful letting

2.    Letting your property

3.    Running your portfolio the right way

Paul Shamplina commented: “It’s hard to believe that it was nearly five years ago that Kate and I first published ‘The Landlord’s Friend’, and today, landlords have never needed a friend more.

“The Buy-to-Let landscape has changed vastly during this time, particularly with the constant changes to tax and now Section 21, meaning small landlords are seriously having to think whether they want to stay in the sector.

“However, I think it’s important to remind people that demand is still extremely strong, with the PRS making up 21% of our total housing sector and predicted to rise to 24% by 2021. All of these people need somewhere to live, and the government is under pressure to support a more professional sector that provides a safe environment for tenants.

“There is still very much a place for landlords who take their legal and moral responsibilities seriously, so we want to help landlords stay profitable while ensuring they do it the right way.”

Kate Faulkner commented: “Landlords are going through a tough time just now. Not only are they being hit by increased taxes, the changes in legislation to the Private Rented Sector are coming in thick and fast, with Local Authorities able to find landlords who make mistakes up to £30,000 for each breach. Meanwhile, tenants’ expectations of being delivered a beautiful home to live in rather than a temporary place to stay are increasing.

“The latest version of ‘The Landlord’s Friend’ helps to equip both new and existing landlords with the information they need to invest and run a buy to let property successfully.”

Rental Growth in London Presents Opportunity for Landlords

Published On: May 10, 2019 at 8:16 am

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Rental growth for property in the UK has increased by 0.96% in the year to April, according to the latest Landbay Rental Index. However, slow rents in London (0.66%) continue to weigh down on otherwise resilient rental growth in the rest of the UK (1.11%).

Landlords, this could be a prime opportunity for investment, if you have your eye on higher rental growth. Looking north of London, or even England, could reap rewards.

The highest year-on-year rental growth can be seen in Scotland, at 1.78%. Here, the average rent is £750, which is only slightly less than the UK’s average, when discounting London (£773).

In particular, Edinburgh City has the highest rental growth, at 5.44% year-on-year. Glasgow City and East Lothian are also doing well, at 2.59% and 2.21% respectively.

Heading over to Wales, results show the country to have experienced the second highest growth. However, rents are lower at an average of £658. The second highest rental growth in the UK is in Methyr Tydfil at 4.65%, whilst Blaenau Gwent is third at 3.92%.

In England, Nottingham has the highest rate of rental growth at 3.84%. Rutland and Leicester are also good options for landlords looking to move further north from London, with growth at 2.56% and 2.33% respectively.

John Goodall, CEO and co-founder of Landbay said: “Landlords can rest assured that there is decent rental growth to be found across the UK, particularly if they look north of London. On the face of it, landlords have had a tough time in the past few years, from increased regulatory pressure to a significant increase in stamp duty costs, yet they have managed to shoulder many of these costs without passing them onto tenants. For brokers, this provides them with the opportunity to give expert advice to their clients about changing elements of the housing market and which areas have the most potential in the coming months.”

UK Rental Market Analysed by Latest Surrenden Invest Report

Published On: May 10, 2019 at 8:05 am

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A new report looking at the UK rental market has revealed a strong and sustained demand for privately rented homes.

Surrenden Invest’s 2019 Rental Market Snapshot has considered the key drivers behind this boom in the UK’s private rental sector (PRS), as well as what it means to those who live and invest in it.

Jonathan Stephens, Surrenden Invest MD, said: “What we’re seeing is a continuing drive towards rented accommodation in the UK, with developers racing to meet the demand for contemporary homes in city centres. Tenants are seeking ever more experiential homes, with concierge services and exciting roof terraces becoming something of a must. 

“Investors, meanwhile, have largely shrugged off recent announcements, from the Brexit delay and potential Section 21 ban to Labour’s challenge to permitted development rules.”

In recent years, former office blocks have been converted into some 42,000 homes under the altered permitted development rules (PDR). Labour has proposed changing the rules yet again (following the Conservatives’ decision to change them back in 2013). This is due to permitted developments not being required to provide affordable homes or meet official space standards. However, there is the possibility that such a change may put further pressure on the UK’s limited supply of housing unless it is replaced with an alternative.

Stephens went on to say: “Investors in the UK rental market are increasingly unphased by issues such as the potential Section 21 notice ban and the talk of PDR rule changes. We’re finding that those who were determined enough to see out the increase in stamp duty and the phasing out of mortgage interest relief are in it for the long-haul – which is good news for the UK rental market, given the continually increasing demand for privately rented homes.”

Birmingham, Manchester, Liverpool, Newcastle and the London commuter belt are highlighted as key markets for rental properties. These hotspots provide the lifestyle that many tenants are currently after, as well as good yields and growth for property investors.

Currently, the North West holds the focus for capital growth, with new figures from HM Land Registry showing a greater rise in house prices than any other English region. Monthly growth was 1.3% between January and February, with an annual uplift of 4.0% in the year to February.