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Monday, September 01, 2014

Increased competition amongst tenants

Courtesy of Supertrooper at FreeDigitalPhotos.net
Increased demand and a reduced supply has meant that there are now, on average, seven tenants fighting over each rental property. 

According to the latest data from Sequence, (parent company to agency brands including Barnard Marcus and William H Brown) this stiff competition is a result of soaring demand, up by 18 percent  over the 12 month period from July 13 to July 14, set against a fall in supply of 19 percent.

Stephen Nation, Sequence's head of lettings, Stephen Nation said “The rental market across the UK is increasingly competitive with demand rising at the same rate at which supply is dropping [while] activity in London’s rental market is even more abuzz. This severe shortage of rental properties coming onto the market means that rents in the Capital have increased by 6pc annually to £1,515 per month."

The ONS's recent figures showing a leap in net migration and tenants increasingly unable to transfer onto homeownership, this perfect storm will inevitably rumble on.

Landlords need carrot & stick says CIH

Landlords have been threatened with a carrot and stick to encourage them to improve the maintenance and management of their properties.

Property Hawk has talked before about the need for tax incentives to encourage landlords.

The Chartered Institute of Housing (CIH) whilst accepting that landlords receive £7bn of tax allowances a year, make the point that there currently is no incentive for landlords to carry out work above the minimum standard.  The English Housing Survey shows that a third of private rented homes would have failed the government’s Decent Homes Standard in 2012, compared to only around one in seven social rented homes, while almost one in five don’t have central heating.

The CIH  and the Resolution Foundation( RF) recognise that an improved tax system would encourage landlords to improve standard by allowing certain work to bring a landlords property up to a certain standard would be classed as an allowable expense.

WE AGREE!

For too long letting property has been treated by the tax system as an investment business rather than a trade making many of the expenses relating to improvements in their property  disallowable for revenue purposes.  To encourage landlords to invest in better standards then a tax system that reflects the fact that landlords run a property rental business not just a property investment.

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Saturday, August 30, 2014

Beds in sheds

Beds in a shed is the phrase invented by media to describe landlords letting rooms in outhouses, ancillary buildings and even sheds without planning permission and quite often reasonable sanitary facilities. It's an increasing problem in metropolitan areas particularly London where rents continue to surge and rental demand outstrips supply.

Council takes action against beds in a shed landlord

The latest case of a council taking action is Hillingdon Council in west London where a landlord ignored a planning enforcement notice and has had the building demolished and ordered to pay the £10,000 costs. The building was previously rented at £750 a month.

Sheds design much improved

The design of home offices having improved so much over the last 5 years and the likes of George Clarke championing the rise of the designer shed taking a slightly tangential view then it's fair to say that some sheds & outhouses probably present a better living environment that the buy-to-let rabbit hutches that have become part of our urban tapestry in our city centres. Unfortunately, most of the 'sheds' that are let out are to disadvantaged tenants are not to this standard. However, maybe there is a wider debate that perhaps if the planning system could be a little bit more discerning and not condemn these backland residential units as a menace then maybe we wouldn't have such a housing problem so that tenants are so desperate that they have to rent these places.

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Thursday, August 28, 2014

Leap in net migration brings more tenants to PRS

ONS statistics report a jump in long-term migration into the UK.
In the year ending March 2014, net migration was estimated to be 243,000, compared to 175,000 in the previous 12 months, and a long way from the Government's sub 100k target.

Most of these 243,000 new faces will look to the private rented sector for a place to live.

I'll let you do your own maths, but it doesn't take a genius to see that tenant demand is up, and will only increase for the foreseeable future.

I can hear the sound of hammering across the country as stud walls are thrown up. 

Rental yields top ten for August

Southampton remains at the top of the rental yield pops.

With a gross rental yield of 7.82%, Southampton is still the top BTL investment location in England and Wales according to HSBC. The average rent in the city is £901 per month.

London's yields lagged behind, following its surge in property prices over recent years.

Letting agent redress scheme from October

The government will start it's compulsory redress scheme from 1st October.

The three schemes are the Property Redress Scheme, Ombudsman Services Property and The Property Ombudsman. The schemes are free to use and are to provide a service of impartial dispute resolution when complaints about letting agents are raised by landlords or tenants.

If a letting agents are found not to be into one of the approved schemes then they could be fined up to £5,000 by local trading standards.

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Wednesday, August 27, 2014

Is this fair wear & tear?

This is the state of one of my buy-to-let properties.  Is it fair wear & tear?


Find out what you can do to protect yourself by signing up to this weeks NEWSLETTER.



Landlord Insurance - professional rates - full cover

Savills Residential Property Focus for Q3 2014

Watch the videos or download the full report of Savills Residential Property Focus for Q3 2014, including analysis of the impact from  potential increase in interest rates and the introduction of the Mortgage Market Review.


Our most popular BTL mortgages

Max LTVInitial RateTermCompletion feeBooking feeIncentivesLender
85%4.99% Fixed2 Years2.5%£130.00NoKent Reliance Semi Exclusive
85%5.99% Discount2 Years3%£130.00NoKent Reliance Multi Let & Ltd Co. Semi Exclusive
80%4.99% Fixed2016-10-310%£150.00Free valuationMortgage Trust Exclusive
80%3.99% Fixed2016-10-31£2495£150.00Free valuationMortgage Trust Exclusive
75%4.69% Discount3 Years2%£0.00NoSaffron BS Semi Exclusive
75%5.39% Variable0 Years2.5%£0.00NoSaffron Light Refurbishment
75%3.79% Fixed2016-10-310%£150.00Free valuationMortgage Trust Exclusive
75%2.75% Fixed2016-10-31£2495£150.00Free valuationMortgage Trust Exclusive
65%5.27% Fixed2017-03-312.5%£0.00NoSaffron BS Ex-Pat Semi Exclusive
60%2.45% Discount2 Years£1950£250.00One free Valuation on properties valued up to £1,000,000Hinckley & Rugby Exclusive
IMPORTANT! Due to current market conditions, lenders are withdrawing and replacing products with little or no notice.  Please check our website regularly to see the most up-to-date products available. 
 
Search the whole BTL mortgage market free

 

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.

Letting agents double charging

Landlords and tenants are being ripped off according to latest research by Direct Line for Business.
This is because both landlords and tenants are being both charged for the same service.  This so called 'double dipping' is something that Ed Milliband has vowed to tackle if he gains power by outlawing letting agents from charging.

A classic case of where letting agents seek to gain money for nothing is where they charge a landlord and letting agent for needlessly creating a new 6 month Assured Shorthold Tenancy rather than allowing it to run on and become a periodic tenancy.

A recent report in the FT talked about one unamed South London letting agent charging £670 for a basic contract extension involving a change to the date on the Assured Shorthold Tenancy contract.  The tenant was also charged £90 for the same service.

Personally,  I'm not so annoyed at the double charging principle but the fact that landlords and tenants are charged needlessly for services such as tenancy renewals and contract extensions that aren't needed.  This often comes about because landlords do not understand the legislation surrounding letting property.

Letting essentials - helping landlord to understand their rights

Tuesday, August 26, 2014

Rightmove launches its trendometer

Rightmove have launched its house price 'trendometer' - an interactive gadget that relates average property prices over the years between 2001 and 2014 broken into the regions of the UK.

Landlord fined £13k for no gas safety cert

A landlord from Slough has been given a costly lesson in the seriousness of not complying to gas safety regulations. The landlord, for some me reason decided not to bother getting a gas safety certificate despite a series of warnings over a four year period, between June 2010 and February 2014.

Mohammed Nawaz, 25, was prosecuted for breaching gas safety regulations and failing to comply with an enforcement notice issued by the Health and Safety Executive (HSE).

The landlord was handed a fine, totalling £9,000 alongside court costs of £3,941.

After the case, HSE Inspector Karen Morris said:

“There is no excuse for landlords failing to ensure that gas appliances in rented properties are properly maintained and subject to annual safety checks. These are simple and inexpensive measures, but they are vital for the safety of the people living in the premises.

“HSE takes gas safety issues very seriously and we will take enforcement action when necessary.”

Savills 5 year price forecast

What does the future hold for UK house prices? This map from Savills shows their predicted trends over the next five years. View the full version here.

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Letting agents accused of double charges

A word of warning for landlords, and reason to keep a close eye on your letting agent, it seems some like to get paid twice for the same job.

Letting agents have been accused of double charging, getting both the tenant and landlord to pay for the same services, such as reference checks , or the renewing of tenancy agreements.

The insurance company, Direct Line have been investigating the problem, and have reported finding one London letting agent charging a landlord £670, for altering the date on a tenancy agreement, then having the cheek to charge the tenant £90 for the very same service.

The rise of the pretend landlords

With property increasingly unaffordable against wages, and with an ever stringent lending process on residential mortgages, desperation has lead some buyers to pretend to be landlords - the shame.

Increasingly desperate buyers, including FTB's are pretending that they will be letting out a property, and applying for a BTL mortgage, when in reality they are wanting to live in the property.

The Telegraph has reported that a leading mortgage broker has seen a 46pc rise in the number of buy-to-let enquiries from first-time investors  in May, following the introduction of the more stringent lending requirements on residential mortgages as part of the Mortgage Market Review. This spike in numbers might indicate that many of these applications are not by those wanting to rent out the property.

If caught making these kind of fraudulent mortgage applications a buyer could find themselves stopped from getting a mortgage in the future.

The Financial Conduct Authority is looking into the issue as part of its post-implementation review of the Mortgage Market Review.

A spokesman said: “We are aware that some borrowers might be tempted to make fraudulent applications to get around the affordability rules. Firms need to have procedures in place to ensure that people applying for buy-to-let mortgages do not intend to live in the houses they are buying. This is an area we are keeping under review.”

Meanwhile the issue is affecting the BTL mortgage market, with lenders more wary of lending to legitimate first time landlords and preferring to stick with those with an established rental portfolio.

Search the whole BTL mortgage market free

Email:info@propertyhawkbtlmortgages.co.uk
 

Tel: 029 2069 5446

Saturday, August 23, 2014

Possession orders and human rights

A recent case has highlighted the fact that a tenant cannot invoke the Article 8 Convention on Human Rights to over rule the powers of a private landlord the rights of possession under 21(4) of the Housing Act 1988.  The case McDonald and Others vs McDondald involved a couple granting an AST to their disabled daughter in breach of the mortgage terms.

Read the full details of the case.

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Friday, August 22, 2014

Exclusive buy-to-let 2 year fixed rates from 2.39%

Property Hawk Mortgages can offer an exclusive buy-to-let 2 year fixed rates from 2.39% with a free valuation

The range of exclusive 2 year fixed rates are with Mortgage Trust, with rates starting at 2.39% up to 75% LTV and 3.75% up to 80% LTV.

All products have a free valuation for purchases and remortgages. Please note products revert to the lender's SVR plus a margin of 0.25%.


IMPORTANT! Due to current market conditions, lenders are withdrawing and replacing products with little or no notice.  Please check our website regularly to see the most up-to-date products available. 
 
Search the whole BTL mortgage market free

 

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.

Thursday, August 21, 2014

Oversupply could be a threat to landlords

It's a great thing that buy-to-let is booming and despite the downturn there are now more landlords than ever.  A reputed 1.4 million of us.

Downside of increased supply of rental property

However, there is a downside.  Despite the rise of 'Generation Rent' and the fact there is clearly a growing demand for rental accommodation, particularly for longer term properties for rent.  There is also more properties to rent.  More supply means that for many landlords there are increasing risks of rental voids.  I've recently experienced this.  A 2 bed flat that has always let well has been struggling to find a new tenant.  To a degree this relates to local factors.  There has been a considerable increase in availability in apartments in the area.  But this is not exclusive to where my buy-to-let property is found.  It has also happened in many places in the UK.

Finance is key

The increase in availability of buy-to-let finance means that buying a property to rent out is more attainable than ever before.  With returns on other types of investments such as deposit accounts being at a record low levels newbie landlords are buying property and prepared to accept lower returns.  This opportunity also poses a threat to existing landlords which we need to be aware of.
 
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Wednesday, August 20, 2014

August's Buy-to-let Mortgage Update

Andy Young, at Property Hawk Mortgages says:

The buy-to-let sector continues to provide excellent prospects for property investors with recent market data supporting this view. According to research by Halifax, property prices have increased, on average, by 8.8% in the last year and the latest LSL BTL Index reports that rents have also increased by 1.4%. These are the two key factors in determining the overall return on a buy-to-let property, which according to LSL is now 11.8% per annum, the highest level since June 2010 and very encouraging news for landlords.

Lenders are continuing to support the buy-to-let sector, providing a wide choice for both existing and first time landlords. However, the marketplace has become more dynamic and we have seen a number of rate changes recently, although these have not followed a single trend. Some lenders have released new ranges at higher prices, perhaps in order to stem the flow of business and likewise some have lowered their rates in order to remain competitive.

BM Solutions and TMW are still the front-runners in terms of business volumes, but there are now so many more options for specialised loan requirements such as HMOs, limited companies, Expats and refurbishment projects.

Interestingly, in mid-July Accord launched 10 new buy-to-let mortgages including cashback and free valuation incentives, but made available for 10 days only. This is an unusual sales initiative which may have limited impact in the marketplace due to the short turnaround time for submitting applications.

Lending criteria remains diverse across the market with lenders taking different approaches to risk, although there is still an overarching level of caution, especially in light of the Mortgage Market Review, even though buy-to-let lending is, in the main, unregulated. Rental income requirements are generally at 125% at 5% or above, however the recent changes by NatWest Intermediary Solutions imposing a 4.99 loan-to-income multiple may be a bit excessive.

On a more positive note, TMW’s removal of their upper age limits for their buy-to-let range earlier this year and the number of options for first time landlords means that buy-to-let property investment is now available to a very wide demographic in the UK.

Property Hawk Mortgages is continuing to see strong demand for remortgages with landlords raising capital to fund the deposit for additional buy-to-let purchases or looking to employ higher gearing in their property portfolios to maximise returns. Although Kent Reliance is still the only lender providing 85% LTV finance, there is now a good range of products available at 80% LTV from a choice of lenders. Some of these products have incentives such as a free valuation/free legal fees and no completion fee options mean that the upfront costs of remortgaging can be quite low.

Overall, the buy-to-let market remains in good shape and is likely to continue in a similar vein for the foreseeable future.

IMPORTANT! Due to current market conditions, lenders are withdrawing and replacing products with little or no notice.  Please check our website regularly to see the most up-to-date products available. 
 
Search the whole BTL mortgage market free
 

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.


Best places to live - interactive map

The Telegraph have ranked 7000 areas in England and Wales, factoring in crime, health, homeownership and economic statistics, then plotted it all on  an interactive map.

Might be of interest to some of you out there.

London tenants less likely FTBs

The supply of tenants in the capital can only increase over the coming years with many 20 - 40 years olds stuck in the private rental sector and increasingly seeing home ownership as an impossible dream.

Latest data show that the average First-time buyers in London needs to put down £19,350 to cover the minimum required 5 % deposit, following a £63k rise of the average starter home to £387,000.

The increase in London property prices means that FTBs are looking to find an additional £3,150 compared with amount required 12 months ago and this is alongside more stringent lending checks.

Mandatory landlord licences in Brent

It appears that Brent landlords are next in line to drink from the chocolate teapot and be made to pay
for a mandatory landlord licence. The proposed licence will cost £350 and will last for five years

Private landlords in Harlesden, Willesden Green and Wembley Central wards will all be expected to pay out for the license.

Cllr Margaret McLennan, Brent Council’s lead member for housing, said: “We want to create a minimum standard for landlords and properties to ensure that residents can expect a good standard of housing."

If the mandatory licensing scheme gets the go ahead, it is expected to come into effect at the start of 2015.

The proposal is to be discussed by Council chief at their next meeting.

A further landlord licence will all be required by those landlords letting out smaller Houses of Multiple Occupation,  starting January 1st, 2015.


Planning changes for home businesses

Proposed changes to legislation, announced by the Business Secretary, Matthew Hancock, aim to boost the start up of new businesses. The changes include a clarification of the planning regulations regards a tenant of a residential rental property running a business from the property.

The changes were announced on Friday, and are hoped to help dismiss concerns that landlords might have over the status of a tenancy agreement when a tenant starts running a business from the property.

The Prime Minister said: “I want us to be a nation of entrepreneurs that really respect entrepreneurialism and enterprise, something that we imbue in young people in our schools. I want this to be the best country in the world to start, to run, and to expand a new business. We are still some way away from that.”

Tuesday, August 19, 2014

Most popular BTL mortgages

Max LTV
Initial Rate
Term
Completion fee
Booking fee
Incentives
Lender
85%
4.99% Fixed
2 Years
2.5%
£130.00
No
Kent Reliance Semi Exclusive
85%
5.99% Discount
2 Years
3%
£130.00
No
Kent Reliance Multi Let & Ltd Co. Semi Exclusive
80%
4.99% Fixed
2016-10-31
0%
£150.00
Free valuation
Mortgage Trust Exclusive
80%
3.99% Fixed
2016-10-31
£2495
£150.00
Free valuation
Mortgage Trust Exclusive
75%
4.69% Discount
3 Years
2%
£0.00
No
Saffron BS Semi Exclusive
75%
5.39% Variable
0 Years
2.5%
£0.00
No
Saffron Light Refurbishment
75%
3.79% Fixed
2016-10-31
0%
£150.00
Free valuation
Mortgage Trust Exclusive
75%
2.75% Fixed
2016-10-31
£2495
£150.00
Free valuation
Mortgage Trust Exclusive
65%
5.27% Fixed
2017-03-31
2.5%
£0.00
No
Saffron BS Ex-Pat Semi Exclusive
60%
2.45% Discount
2 Years
£1950
£250.00
One free Valuation on properties valued up to £1,000,000
Hinckley & Rugby Exclusive

IMPORTANT! Due to current market conditions, lenders are withdrawing and replacing products with little or no notice.  Please check our website regularly to see the most up-to-date products available. 
 
Search the whole BTL mortgage market free

 

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.


ONS House Price Index for June

Average house price increased by 10.2% in the year to June 2014 according to June's ONS House Price Index. 

The ONS data reflects a cooling market, with June's figures dragging the annual average down by 0.2% from the 10.4% of the previous months, May to May figure.

Get all the tables for June's  publication in the June's ONS House price index in this full report.

Tenant immigration checks set to begin

Pull out your old desk light and pull on your black leather boots it seems that landlords are definitely joining the ranks of the UK border control as part of the new Immigration Act 2014.
All private landlords and letting agents will be required to check the immigration status of potential tenants, with failure to do so, potentially resulting in a maximum £3000 fine. 

A pilot of the scheme is set to start in October in a, as yet, unnamed region.

Codes of Practice and more information will be released over the coming months on how these checks should be carried out - so watch this space.

As for now, tenant referencing companies are popping champagne corks as a salute to increased state intervention - so here's to me, watching you, watching them, watching us....

Tenant Eviction: Best Practice Guide

A handy pdf on the best practice to follow when evicting a tenant has been compiled by My Deposits for landlords to download and print out.

The guide entitled Best Practice Guide: Tenant Eviction has been compiled with the help of Paul Shamplina of Landlord Action

Low inflation indicates no rate rise

July's figures for inflation shows a drop to 1.6 per cent and increasing the likelihood that there will be no rise in interest rates this year, particularly after last weeks Inflation Report showing continued low wage growth   - the Daily Mail speculates the inevitable rate rise with charts and such like.