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Wednesday, February 10, 2016

Manchester buy-to-let opportunities

3 of 5


I’ve just returned from a short break in Manchester and it appears that the buy-to-let sector in Manchester is well and truly booming.  There are cranes from Spinningfields adjoining the City Centre to Media City in Salford.  Every where there are signs advertising buy-to-let opportunities.  So are the streets of Manchester paved with buy-to-let gold?

Manchester buy-to-let opportunities

It’s true that Manchester has a young vibrant population with two massive universities and one of the largest student populations in Europe and the relocation of staff from London to the new Media  City means that the place is awash with generation renters.  A recent report highlighted Manchester as top of the buy-to-let league table for rental yields with gross rental yield approaching 8%.  This is partly because of strong rental demand and low house prices averaging just over £100,000.  The percentage of private housing renting in Manchester is higher than the average at 26.85% reflecting the demand from a young footloose population ideal to rent to.  Average rents across the city do vary widely so as always it pays to do your research.  For instance according to latest Valuation Office Agency figures a one bed apartment in the City Centre would go for £600 ppm where as across the City in Salford the same flat would only achieve £495.  In Wigan rents on a 1 bed flat would be as low as £370.
So  its a no brainer... fill your boots with buy-to-let booty!!!

Is buy-to-let in Manchester being investor led?

Just before every landlord goes running to their mortgage broker desperate for some investment cash and looking to bag a brace of buy-to-let in Manchester; just a couple of warning bells from a buy-to-let old timer i.e. me.  My observations from a short visit to some of the buy-to-let hotspots in the City - Media City and New Islington is that there appears to be a great amount of development activity, but it also seems to be investor led.  It reminds me of the days prior to the credit crunch where easy money meant developers went on a building boom knowing that their was an endless supply of gullible investors clammering to buy into the buy-to-let dream.  I’m not saying that this time there is quite that excess or naivety but their are similarities.  So should you avoid investing in Manchester.  Well I’m not saying that either.  The honest truth is I don’t know the local market that well.  However, I suspect that may first time investors are no different to me but are tempted to sign the deposit cheque anyway. 

Manchester buy-to-let investors need to do their research

I’m not saying don’t buy an investment property in Manchester.  However, what I would say is anybody looking to invest in this powerhouse of the North needs to look very carefully at the investment proportion before committing.  Look at the areas, think about the existing competition.  Is the area over supplied?  Talk to local letting agents to get an understanding of the local market.  Essential is to visit the place just to get a feel of the areas before you commit.  So as always caveat emptor before signing on the dotted line and make sure you understand the downside as well as the potential upside risks of investing in what is a undoubtedly vibrant city that is on the up.

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Tuesday, February 09, 2016

Average property to hit £1m by 2032

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No issue with BTL funding in 2016

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Monday, February 08, 2016

Rent inflation and earnings gap grows

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New build prices are sure to fall

This week's forever bearish prediction from Moneyweek - one day I hope their dreams do come true, just so, they can finally claim, to 'have told us so'....
Most successful pundits are selected for being opinionated, because it's interesting, and the penalties for incorrect predictions are negligible. You can make predictions, and a year later people won't remember them. 

Daniel Kahneman

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Mortgage rates hit nine year low

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Allsop resi-auction - 18th Feb

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Saturday, February 06, 2016

A global property valuation comes in at...

Your fascinating fact for the weekend...and now, discuss.


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Interest rates on hold until 2018

The Bank of England  has signalled that interest rates may stay on hold until 2018.

All 9 members of the MPC decided to keep rates on hold at 0.5% this month.

Market expectations have pushed back a rise in interest rates as far as August 2018 which is great new for landlords like myself who are still basking in the cash-flow heaven resulting from a basket of mortgages tied to the absurdly low interest rate.

Why I'm still comfortable with a 5 year fixed rate mortgage

Despite expectations of an interest rate increase being pushed further into the future I’m still comfortable in remortgaging with a 5 year fixed rate product.  To me this de-risks my portfolio against a certain change in monetary policy.  Rightly or wrongly I feel comfortable paying a sub 4% rate of interest for the next 5 years even if I may pay slightly higher rates of interest in the short term if the current interest rate malaise continues.

Sometimes change can happen unexpectedly rapidly.  Lets not forget the ‘black swan” moment characterised by the credit crunch.  Always expect the unexpected! To me the benefits of certainty in the finance costs of part of my property portfolio outway the potential small amount of interest payments saved if my gamble doesn't come off.  Consequently I am prepared to be sitting here in 5 years time with egg on my face.   Only time will tell.

Finance my investment - mortgage search - all of market rates

Friday, February 05, 2016

UK house prices increase by 9.7%

UK house prices continue to surge according to the Halifax.

UK annual house price growth increases to 9.7% to the end of January which is up from 9.5% a month earlier.

Average house prices jumped by £3500 in January as buyers chased a record low of stock of homes for sale.

Finance my investment - whole of market - online rates

Thursday, February 04, 2016

New HMO and limited company BTL mortgages

Property Hawk Mortgages are now offering a special range of mortgages for HMOs and limited companies with Precise Mortgages which include rates up to 80% loan-to-value. 

For example, 
  • a 4.54% term tracker up to 80% LTV with a 2% arrangement fee and a pay rate rental calculation; 
  • a 5.24% 5 year fixed rate up to 80% LTV with a 1.5% arrangement fee. 

Precise Mortgages has a maximum age of 80 at application with a maximum term of 30 years, which leads to the possibility of a landlord aged 110 with a buy-to-let mortgage.

These are great options for professional landlords.



Email:info@propertyhawkbtlmortgages.co.uk

Tel: 029 2069 5446
Your home may be repossessed if you do not keep up repayments on your mortgages.  
The Financial Services Authority does not regulate some forms of mortgage.

Monopoly map of London rents

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Wednesday, February 03, 2016

Landlord fined for letting Right to Buy

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500,000 landlords poised to sell

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Rental demand to rise over next 5 years

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'Generation Rent' to swell by 1 million

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Allsop's February auction catalogue

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Tuesday, February 02, 2016

Property demand outstrips supply

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Investing in U.S property

 

US Residential investment property

Some property gurus are currently trying to ‘flog’ investment properties sourced from the United States.

  The ‘property guru’ markets the attraction of these residential investment properties to landlords as being property investments that have:

    •    An unbelievably low price.
    •    A headline rental yield in double figures.
    •    A potential of uplift in the capital values that might occur as the area improves.

UK & US property ‘chalk & cheese’

On paper these residential investment opportunities may seem appealing.  However, anybody that knows anything about the US and the UK residential investment property markets and planning systems will know that they are very different property markets.

 What anybody may say about the UK property market is that it has one thing in it’s’ favour or should I say favor?  As Mark Twain famously advised “Buy land they are not making it anymore”.  He clearly had the UK in mind when making this comment.  It is obvious to any UK resident and landlord that we live on a very crowded isle where land supply is restricted.  This is particularly true of development land which is constrained by a restrictive planning system and the Green Belt.  These facts means that development land and therefore property will always be relatively expensive particularly when demand for accommodation from owners, renters and investors driven by high levels of immigration is so high.

In the United States the land market and planning system is very different.

    •    They have much, much, more of it.
    •    They don’t have a green belt or a planning system that is so restrictive, their system relies on zoning and then releasing big chunks of development land on the fringes of towns and cities.
    •    Land can be very cheap.

This means that U.S. towns and inner cities have suffered from inner city dereliction and decay far more than in the UK.  The middle class residents of a town moving to a new suburb leaving great sways of the old town and city to the working poor or crack dealers. Property in these locations may be ridiculously cheap but don’t expect an urban regeneration miracle any time soon.  Make sure you read our US Property Investment Warning.

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Monday, February 01, 2016

Blair fights for landlords (not Tony )

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Interest rates may stay on hold for 2016

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Right to Rent starts

Our latest burden begins today - border control.

The Right to Rent regime requires all landlords to check an original copy of one of the following documents, as well as making a copy for their records which they then must retain for a minimum period of one year -

  • UK passport;
  • EEA passport or identity card;
  • permanent residence card or travel document showing indefinite leave to remain;
  • Home Office immigration status document; or
  • certificate of registration or naturalisation as a British citizen.

To correctly check a prospective tenant's documentation, a landlord needs to confirm -

  • the documents are the originals.
  • the dates on the documentation gives the tenant the right to stay in the UK.
  • any photos on the documents actually looks like the tenant.
  • any dates of birth correspond to other documents and match the appearance of the tenant.
  • documents don't appear to have been altered.
  • names correspond to any other supporting documents. 

Failure to do these checks could leave a landlord liable to a fine of up to £3,000.

More in the news on today's Right to Rent launch -







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Friday, January 29, 2016

The most popular BTL mortgages



Max LTVInitial RateTermCompletion feeBooking feeIncentivesLender
85%4.99% Discount2 Years2.5%£130.00NoKent Reliance Semi Exclusive
85%5.19% Fixed2 Years2.5%£130.00NoKent Reliance Semi Exclusive
85%5.29% Discount2 Years2.5%£130.00NoKent Reliance Multi Let & Ltd Co. Semi Exclusive
80%4.6% Fixed2019-03-311.5%£150.00NoParagon Premier
80%4.85% Fixed2019-03-311.5%£150.00NoParagon Premier HMO
80%5.39% Variable0 Years2%£0.00NoSaffron Light Refurbishment
75%2.35% Fixed2018-04-302.5%£0.00Free Valuation (on properties up to and including £500,000)Newcastle Building Society
75%3.49% Fixed2021-04-302.5%£0.00Free Valuation (on properties up to and including £500,000)Newcastle Building Society
75%3.49% Fixed2 Years1.5%£100.00NoAxis Bank
75%4.59% Fixed5 Years2%£100.00NoAxis Specialist
 

Email:info@propertyhawkbtlmortgages.co.uk

Tel: 029 2069 5446
Your home may be repossessed if you do not keep up repayments on your mortgages.  
The Financial Services Authority does not regulate some forms of mortgage.