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Monday, April 24, 2017

Property asking prices hit new high

Rightmove's asking prices for newly marketed property has hit an all time high.

The average UK property asking price in April 2017 is up by 1.1% over the course of the past month.

  • The average asking price is at £313,655 (+£3,547). 
  • Annual growth slowing, now at 2.2%.
  • First-time buyer properties annual growth of 6.5%, to £194,881.
Rightmove's Miles Shipside comments: 

“High buyer demand in most parts of the country has helped to propel the price of newly marketed property to record highs. There are signs of a strong spring market with the number of sales agreed achieved at this time of year being the highest since 2007. It remains to be seen what effect the run-up to the snap election will have, though any slowdown in activity will be counter-balanced by the market’s current fast pace. Indeed, in locations where choice of suitable property is limited hesitation could mean losing out to others who still decide to act.

Increasingly stretched buyer affordability will continue to be a price moderator for sellers who are over-ambitious with their pricing, tempering the pace of price rises. Strong buyer activity this month has led to 10% higher numbers of sales agreed than in the same period in 2016. This large year-on-year disparity should be viewed cautiously as the comparable timespan in 2016 saw a drop in buy-to-let activity with the additional second home stamp duty. However, they are also up by 3.8% when compared to 2015. With the growth in household numbers and new-build supply struggling to keep pace, demand is strong and has led to the highest sales agreed numbers at this time of year since the heady pre-credit-crunch levels.”


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Property funds sit on cash

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Friday, April 21, 2017

Landlord Mortgages and BTL Finance Are Key


There are two things that make for a successful residential investor, firstly there is getting good tenants.  This means that landlords have access to regular and recurring income to service their debt or provided for their constant income stream.  The other is access to debt at a reasonable cost through a landlord mortgage. 

Landlord Mortgages - a potted history

There is a lot to BTL and landlord mortgage finance it is more complex and involved than a standard mortgage. Landlords have also lived through extraordinary times in terms of access to debt recently.  In the 90s we had the emergence of the whole buy-to-let thing where lenders recognised that lending against property to bone fide landlords using an AST was not a bad thing.  Then the BTL boom meant that landlords could get their hands on ridiculous amount of cash with literally no capital making them and the lenders vulnerable to any down turn in capital values.  Then, the inevitable crash.  The 'credit crunch' meant that debt became a dirty word.  Cash was again King and good landlord mortgages were only there for landlords with 30% + of cash to put down.  We have seen the relaxing of this tight lending criteria since the credit crunch of 2008 and now landlord mortgage are readily available with Loan To Values (LTV) as high as 85%.  Back to the boom days?! Well almost.  But now we have the Prudential Regulation Authority (PRA) wading into the mix and scuppering these happy days of easy lending.

PRA - Landlord Mortgage Controls

The Prudential Regulatory Authority (PRA) are a new organisation set up as part of the Bank of England to maintain stability within the economy.  One of the parting shots of the last Chancellor George Osborne was to slap on a tightening of the financial screw on lending to the buy-to-let sector by giving more restrictive guidelines to banks  underwriting the landlord mortgages.  In essence what it means to me and you it means that landlords will be able to borrow less again reversing the easy credit environment of the last few years.  The way that this will effect landlords is that the PRA have added an affordability test that requires landlords to be able to afford repayments based on an assumed interest rate of 5.5% as a posed to that which they actually pay.  This has had the effect of increasing the amount of rental cover required by many lenders from what was an industry average of 125% of the rent to 145%.  Portfolio landlords (defined as 4 or more properties) will face much tighter tests on their income than previously.  This element of the changes is due to come in from 30th September.

The moto of the landlord mortgage story is that whilst lending will not be tight as it was before the buy-to-let revolution or after the credit crunch; the days of easy access to landlord mortgages and BTL mortgage finance are probably over for now.

Mortgage Search - all your options



The impact of all these changes are that


Thursday, April 13, 2017

DCLG's Lettings Fee Ban - consultation

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Housing supply at record low - RICS

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Tax change - what options do landlords have?

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The 'sex for rent' landlords

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Property values per sq metre - UK map

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Tuesday, April 11, 2017

The death of the landlord

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Savills mainstream housing market update

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Developers call for Gov to reverse BTL crackdown

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PRS rents growth chart

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Rightmove sees increasing rental supply

The property portal has seen an increase of 12% in the number of available rental properties on its books.

The increase in supply is seen as the reason for the slowing rental growth; with asking rents now just 1.8% up over this time last year.

This relative abundance of rental property have lead to increased letting periods, up 10% over the year, with properties in London taking on average 20% longer to secure a tenant.

Rightmove’s Sam Mitchell comments: 

“The supply boost following last year’s buy-to-let frenzy in the first few months of the year has continued through to 2017, introducing more competition in the market for letting agents trying to secure suitable tenants for their landlords’ properties. This extra choice for tenants in many areas has inevitably led to properties taking longer to let than this time last year. However, agents are still reporting that well-priced properties in popular areas are letting quickly. The new tax changes that started to phase in from this month may also lead to some landlord’s selling off properties and the extra stamp duty on buy-to-lets may deter some landlords from expanding their portfolios, so now seems to be the right time for tenants who want to have more choice to look around. Agents’ properties need to stand out even more than before, so carefully considering how your property is presented is really important. Now might be the right time to encourage landlords to give the place a lick of paint or some new furniture to give them the edge to help secure the right tenant.”

rental data right move feb 2017

Latest House Price Index from the ONS

The latest House Price Data from the ONS puts the average property price in England at £234,466; a monthly increase of  0.8%, bringing the annual increase to 6.3%.

Wales fairs less well, with its average property price down to just £145,293; a monthly drop of  0.9%, means the annual growth rate is just 1.8%.

London's annual growth is also down, now just to 3.7% with average prices having dropped by 0.9% in February to £474,704. 

The regional data shows that:


  • East of England experienced the greatest increase in its average property price over the last 12 months with a movement of 10.3%
  • Yorkshire and the Humber experienced the greatest monthly price growth with an increase of 2.5%
  • North East saw the lowest annual price growth with an increase of 2.2%
  • South East saw the most significant monthly price fall with a movement of -1.0%






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Arguing for zero house price inflation

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New - Rent Repayment Orders Guidance

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Monday, April 10, 2017

City's average tenancy deposits

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BTL tax will make it harder for FTBs

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Accord enters BTL market

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.

Rent Repayment Orders extended

As part of the Housing and Planning Act 2016, new rules Rent Repayment Order (RRO) mean that  English local authorities and tenants can claim back up to 12 months rent from rogue landlords and agents.

From 6th April 2017 applications for Rent Repayment Order can be made for :
  • Illegal eviction or harassment of occupiers;
  • Using violence to secure entry; and
  • Failure to comply with a housing improvement notice or prohibition order.
The new rules, cover Local authorities recovering rent paid by Housing Benefit or Universal Credit and tenants who have paid their own rent. 

A RRO application no longer needs to be made following a successful prosecution of the landlord or agent, all that is now required is enough proof to satisfy a hearing of the First-tier Tribunal (Property Chamber).


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Semi-commercial finance for landlords

For landlords who are deterred by the 2016 buy-to-let stamp duty increase, semi-commercial properties can provide an investment opportunity that avoids the higher levy. For example, a single freehold that includes a commercial property, such as a shop with living accommodation above it, is not subject to the 3 per cent levy increase imposed in 2016, because it is not considered to be a buy-to-let property. A savvy investor could buy the single freehold property and then create separate leases for the commercial element and the residential element. The flat above the shop could then be considered for a buy-to-let mortgage.

The recent rise in limited company applications has been documented previously and there could well be a further uplift this year after landlords file their tax returns and contemplate the real ramifications of the tax relief changes that come into effect in April

Many professional landlords are naturally entrepreneurial, adept at adapting to changes in the market and finding ways of making their businesses work. The recent spate of changes, although a hindrance for some, is likely to motivate serious buy-to-let investors to find alternative solutions to their problems.


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.

Saturday, April 08, 2017

Thursday, April 06, 2017

New rogue landlord penalties start

Local authorities get new powers over rogue landlords and agents today.

As part of the Housing and Planning Act 2016, English local authorities will be able to issue civil penalties for housing offences such as; failing to comply with a housing improvement or overcrowding notice, not having any required licences,  and not complying with the House in Multiple Occupation (HMO) management regulations.

The maximum penalty is £30,000.

These new penalties do not require the local authority to take out a criminal prosecution, only that they must follow the Government guidelines in the process of collecting evidence and the issuing of notices. 

Landlord and agents will have the option to appeal penalties at the First-tier Tribunal (Property Chamber).

Any unpaid penalties can be collected via a county court order.


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Mortgage Trust - new BTL exclusives

Property Hawk Mortgages has launched two new exclusive buy-to-let fixed rates with Mortgage Trust. There is a 2.34% two-year fixed rate and a 2.95% five-year fixed rate, both available up to 75 per cent loan-to-value and with a free valuation.

We are certainly seeing a preference for fixed rates at the moment and have seen a pronounced increase in demand for five year fixed rates since the introduction of the PRA regulations and the changes to lenders’ rental calculations. In fact, five- year fixed rates have been the top sellers at Property Hawk Mortgages so far this year.

Mortgage Trust has a 125 per cent interest coverage ratio (ICR) for basic tax payers with a stress rate of 4.00 per cent for the 5-year product and 5.50 per cent for the two-year product, so these products could be an excellent choice for landlord clients looking for achievable fixed rates during this period of changing affordability assessments. The ICR increases to 140 per cent for higher and additional rate tax payers

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.


Wednesday, April 05, 2017

The buy-to-let sell off

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New build leasehold scandal to cost Billions

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Ltd Co take up 40% of BTL market


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.



BTL mortgage update - Bridging Finance

Jane Simpson at Property Hawk Mortgages says:

Although we are predicting a relatively flat year for the overall buy-to-let mortgage market, there will still be plenty of lending opportunities for landlords who are willing to seek them out.

When a market is retracting or at least showing signs of slow growth, it is often of strategic benefit for businesses to look at ways of diversifying their income streams and this is no different for those operating in the buy-to-let mortgage market.

Property Hawk Mortgages is essentially a buy-to-let mortgage specialist and the obvious way to expand our proposition is to find products and services that complement our core first charge buy-to-let mortgage business. For this reason, we have now ventured into the second charge and bridging finance arena, but for buy-to-let only.

Bridging and second charges

My impression from discussions with numerous pundits in the industry including lenders, networks and other buy-to-let brokerages, is that there is a growing demand for alternative buy-to-let solutions. 

Second charge buy-to-let mortgages or short term finance such as bridging can resolve issues faced by landlord clients who are looking to raise capital. For example, those tied in with their existing mortgage provider or those on a very low reversionary rate with no incentive to remortgage away from their current product.

There are numerous reasons for landlords to raise capital and the purchase of a further buy-to-let property is a common one. However, the recent PRA regulations and subsequent changes to rental calculations has meant that some landlords are looking for ways of generating additional deposits to meet the tougher rental requirements. Second charges provide a possibility for doing this and a way for brokers to generate supplementary income.

At Property Hawk Mortgages, we are also receiving a growing number of enquiries about bridging finance solutions and now offer a range of both second charge and bridging products with Together Mortgages, Shawbrook, Masthaven and Precise.

Bridging is certainly growing in popularity among landlords and its reputation for being punitively expensive seems to be diminishing. If used intelligently, bridging can be an excellent resource for buy-to-let investors and enable them to make the most of opportunities and bargains in the rental property market.

For example, bridging is an excellent short term solution for landlords buying property at auction. Auction properties can often be obtained at a reduced price and allow investors to avoid paying higher stamp duty. Bridging can also provide an alternative for landlords purchasing cheaper properties that need some refurbishment before they are let out. There are numerous light refurbishment products available through core lenders, but a bridging specialist can often provide the resource to carry out more extensive renovations.

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.




Tuesday, April 04, 2017

The most popular BTL mortgages

Max LTV Initial Rate Term Completion fee Booking fee Incentives Lender
80% 2.64% Discount 2 Years 0% £0.00 No Hanley Economic Exclusive
80% 3.75% Fixed 2020-04-30 £995 £150.00 No Paragon Premier Basic Rate & Ltd Company
80% 4.89% Discount 3 Years 2% £0.00 No Saffron BS Semi Exclusive
75% 2.34% Fixed 2 Years £995 £150.00 Free Valuation Mortgage Trust Exclusive
75% 2.95% Fixed 5 Years 2% £150.00 Free Valuation Mortgage Trust Exclusive
75% 3.24% Tracker 0 Years 1.25% £0.00 No N & P Ltd Company
75% 3.49% Fixed 2022-04-30 2% £125.00 No Foundation Semi-Exclusive Ltd Company
75% 3.59% Fixed 2019-06-30 1.5% £0.00 No Landbay Semi-Exclusive
75% 4.25% Fixed 2022-06-30 0% £150.00 No Paragon Premier Ltd Company
70% 3.79% Fixed 5 Years 1.3% £125.00 No Dudley Exclusive
65% 3.39% Fixed 2019-06-30 1.5% £0.00 No Landbay Semi-Exclusive Limited Company
 
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.




London house building set to plummet

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Ltd company BTL products count soars

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.

Will Brexit mean we need fewer homes?

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Fergus Wilson backlash over racism

Unsurprisingly, the news that Kent landlord, Fergus Wilsons has a ban on renting to 'coloured' tenants has attracted an angry reaction on social media.

The 69-year-old landlord says he has been bombarded with offensive comments.

So affronted by the level and viciousness of the abuse Mr Wilson has raised the issue with the police.

However, Mr Wilson has refused to withdraw his comments, arguing it is not an issue of race, but a practical one, based on his concerns over the cooking of curries, and the risk of stains and smells that may result from this. 

Along with the social media backlash, Mr Wilson's letting policy has attracted the interest of the Equality and Human Rights Commission, who are now considering legal action.



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Basement conversion collapse

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Monday, April 03, 2017

Landlord LTVs keep falling say Paragon

Loan-to-values on BTL mortgages are falling according to  Paragon Mortgages’ PRS Trends Report .

In Q1 2016 the average LTV on a BTL mortgage fell 2%, to 35%. 

The average LTV on a BTL back in Q2 2012 was 42%.

Paragon Mortgages, MD John Heron comments: 

“Average gearing is low and getting lower, and this long-term de-leveraging demonstrates just how financially conservative buy-to-let landlords are.

Looking ahead, it’s realistic to expect this downward drift in gearing to continue as the PRA’s new buy-to-let underwriting standards take effect.

Our PRS Trends Report indicates a resilient sector in Q1 2017 but, as the mortgage interest rate tax changes filter through between now and 2021, landlord confidence may be eroded further which could well result in a reduction in the supply of property to the sector and, in turn, higher rents.”




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.

New inheritance tax rules - Gov guide

From 6 April 2017, many individuals will be offered a family home allowance so they can pass their home on to their children or grandchildren tax-free after their death.

The family home allowance will be added to the existing £325,000 Inheritance Tax threshold, meaning the total tax-free allowance will end up by 2020-21 as:
  • up to £500,000 for an individual
  • up to £1 million for a surviving spouse or civil partner, by 2020-21
This additional allowance will be staggered as follows -
  • £100,000 in 2017 to 2018
  • £125,000 in 2018 to 2019
  • £150,000 in 2019 to 2020
  • £175,000 in 2020 to 2021
The allowance will be gradually withdrawn for estates worth more than £2 million.

Read the policy paper - Inheritance Tax: main residence nil-rate band and the existing nil-rate band
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Northern landlords get the best returns

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455 new London skyscrapers mapped

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Rental site where tenants bid for a property

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Paying off BTL mortgages to avoid tax change

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Manchester tops city growth table

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The reputation of new build homes crumble



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Sunday, April 02, 2017

Landbay cuts BTL rates and fees

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.

Clampdown on pub-to-shop conversions

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