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Thursday, December 24, 2015

Over 55s still pinning pensions on BTL

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FT warns on buy-to-let

Reports in the FT warns that purchases of buy have peaked and will start to decline from 2016.  The Council of Mortgage Lenders says that it expects purchases of buy-to-let investment properties to fall from about  116,000 in 2015 to 105,00 in 2016 and then 90,000 in 2017.

Fall in investment numbers by landlords

The fall in investment numbers by landlords could be seen as a double sided coin. Less investment means less additional competition in the lettings market.  This is no bad thing. Many of us longstanding landlords have experienced a flood of new landlord entrants into the market which despite Government worries over rent rises has actually suppressed rental growth (outside London).  However, if you dig deeper on why the numbers of purchasers are expected to fall then the news gets more sinister.

Consultation exercise launched on clamp down on buy-to-let

We all know that the growth of buy-to-let in recent years has part being as a result of attractive rental market where more people are looking to rent rather than buy.  However, the ability of landlords to finance their investment has also been critical to the growth of the sector.  From a situation after the depression in the early 1990s where obtaining a commercial loan to buy residential property was virtually impossible (I remember having to practically beg my bank manager for a loan & the most he give me was a 15 year repayment on a double digit interest rate).  The opposite has occurred following (ironically what was know as the 'credit crunch') in that there has been a massive explosion of lending to landlords on terms that are often as attractive to those looking to buy there own home.

All the above has spooked the Bank of England governor Mark Carney who sees it as potentially destabalising as people seek to use 'cheap money' to gear up on property investment and not pay sufficient regard to what will happen when interest rates start to rise.

Bank of England expected to act to curb lending

This leads us to expect the Financial Policy Committee (FPC) to push for extra powers to regulate mortgages in the sector.  The mechanisms for this would be for the Bank of England to require banks to hold more capital against these loans which effectively would drive up the cost of providing the capital.  This is then passed onto landlords as higher costs of lending which will obviously deter some landlords from going ahead with their investments.

To read more about the crackdown on buy-to-let mortgages.

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Wednesday, December 23, 2015

Thursday, December 17, 2015

The Rent Check - Autumn PRS data

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New bridge-to-let scheme

New bridge-to-let scheme for auction purchases and renovations

Property Hawk Mortgages is delighted to offer a unique bridge-to-let scheme with Aldermore.

Aldermore provides a flexible approach to short-term lending, offering straight-forward bridging finance and an exit route onto one of their standard buy-to-let mortgages.

The scheme is ideal for buy-to-let auction purchases, properties not suitable for mortgage purposes or those in need of refurbishment or renovation.

The scheme includes a free valuation and if required offers an exit route from the initial bridging loan, ensuring costs and hassle are greatly reduced. Applicants can choose to switch onto any Aldermore buy-to-let rate once the bridging loan period has ended.


  • Maximum loan £3 million 
  • Maximum LTV - 75% 
  • Up to 100% LTV considered with extra security 
  • Rolled up interest - no monthly repayments 
  • Flexible terms - 1 to 18 months 
  • Unregulated bridging only 
  • 1st legal charge secured against property 
  • Available in England and Wales 

Points of difference

  • Rates starting from 0.64% per month 
  • Available with no exit fee or early repayment charges 
  • Access to underwriters - each application is assessed on a case by case basis 
  • Free legal fees and reduced valuation on all remortgages up to £1 million (onto Aldermore buy-to-let product) 
  • Minimum 1 month ownership prior to remortgaging 
  • Ability to capital raise above the original loan amount (based on the enhanced property valuation) on term exit 

If required, an exit route is available from the initial bridging loan onto one of Aldermore's buy-to-let products, ensuring costs and hassle are greatly reduced.

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.

UK property market - 10 years from now

The Association of Residential Letting Agents and the National Association of Estate Agents with help from the Centre for Economics and Business Research have pulled together to have a stab at seeing the future.

They've published a report, Housing 2025, making predictions for  the UK property market ten years from now.

Key points are -
  • Homeownership dropping from 62% to 55%. 
  • The private rented sector growing from 20% to 29%.

ARLA's, managing director, David Cox, said 

'Buying and renting a home is a giant step, and is out of reach for many. Rent costs are already growing at a rate that people are struggling to keep up with, and they're due to become even less sustainable over the next decade – particularly when the new landlord tax sets in, which will put off many would-be landlords from entering the market. If we're to see the property market lifted out of its current state, we need to help the rental market from top down as well as bottom up, ensuring landlords are not penalised for their choice of income, and they can in turn give tenants the best possible price and service they deserve.

The Chancellor has introduced a number of changes to the buy-to-let market, including a reduction in the tax relief that landlords can claim on their rental income, and an increase stamp duty charge of 3 per cent on those buying a second home.'

NAEA, managing director, Mark Hayward argues: 

'House prices are only going to go one way, and unfortunately that is up. For so many already priced out of the market, this is news aspiring house buyers will not want to hear. Ongoing house price inflation, combined with low wage inflation, tighter lending restrictions and a shortage of affordable housing, means owning a home will continue to be distant dream for many. Increased rental costs will also make it more difficult for current renters to save for a house deposit as much of their income will be eaten up in rent.'

average rent chart for 2014 CEBR figures

average rent cebr figures for 2025

Although it's not quite Star Wars, you might want to read their vision of our future in full -

Scotland set for 3% BTL tax rise

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Rightmove's December asking prices

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Wednesday, December 16, 2015

Unlicensed Dagenham landlord fined £5,500

A Dagenham landlord, Hawa Ayuba, has been fined £5,500 following an investigation by the local council’s private landlord licensing team discovered she'd failed to obtain the required licence as part as the council's mandatory landlord licensing scheme.

Barking and Dagenham landlord licensing scheme was introduced in September 2014.

Under the scheme, a licence lasts for five years and costs £500.

Landlord, Hawa Ayuba, rented out four rooms of her three bedroom house in Manor Road, Dagenham, as well as living there herself. Despite receiving £2,500 in rent each month, Ayuba had   failed to apply for the required licence, and on visiting the property, council officers found what was labelled a 'death trap' - having faulty wiring and poorly maintained fire alarms.

In all, Hawa Ayuba pleaded guilty to a total of 11 offences.

Barkingside Magistrates’ Court has ordered her to pay fines of £5,500, plus costs of £493.80, a victim surcharge of £120 and a criminal court charge of £150.

Tuesday, December 15, 2015

Central London prices to flatline in 2016

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Best landlord returns - a UK map

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London ground rent investments

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ONS October HPI Data - 7.0% growth

The Office for National Statistics have published their data from October 2015's for UK house sales.

They pinpoint the following stats -
  • Prices increased by 7.0% in the year to October 2015, up from 6.1% in the year to September 2015.
  • Annual house price inflation was 7.4% in England, 1.0% in Wales, 0.9% in Scotland and 10.3% in Northern Ireland.
  • Fastest annual house price inflation remains the East (10.4%) and the South East (9.5%).
  • Excluding London and the South East, UK annual house price inflation is now 5.6% 
  • First-time buyers experienced 5.9% annual house price inflation
  • Owner-occupiers (existing owners), experienced 7.4% annual house price inflation
  • The average mix-adjusted house price is now £300,000 in England, £174,000 in Wales, £196,000 in Scotland and £158,000 in Northern Ireland.
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One pundits view on a BTL future

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Saturday, December 12, 2015

Crackdown on buy-to-let mortgages

The mood music is getting menacing when it comes to the approach now being sounded by regulators not just in the UK but across the world according to latest reports.

Global action on buy-to-let mortgages

Officials at the Basel Committee which sets financial standards across the world want banks to hold twice as much capital when loans are dependent on rents and tenants as a posed to mortgages that finance a house purchase.  Currently, under Basel Committee rules banks have to apply a 35% risk weighting to residential mortgage loans with a Loan To Value (LTV) ratio of between 60-85%. The new plan would mean this weighting could double to 70% if the loan is dependent on rental income.  This would double the amount of capital the bank would need to hold against the loan and thereby increasing it's financing cost which would be passed on to landlords in terms of higher borrowing costs.

Bank of England also poised to act on buy-to-let mortgages

The global clampdown comes at a time when the Bank of England are also looking at acting to restrict buy-to-let mortgages.  The rational is that buy-to-let lending has jumped 40% since 2008 whilst that to private owners has risen just 2%.  The fear of officials is that landlords may be more vulnerable to a fall in house prices or a rise in interest rates.  The fear could be that landlords are more likely to act in these events by selling up which could destabilise the rest of the housing market by increasing supply into a falling market.  The worry is that the controls on buy-to-let lending is less stringent than those in the private market.  This is a complete reversal to lending conditions prior to the credit crunch.

The Financial Policy Committee (FPC) chaired by Mark Carney (the Governor) is pushing for powers to force banks to hold more capital and thereby restricting the amount they are prepared to lend to the private rental sector and at the same time increasing the costs of borrowing.

Property Hawks message to landlords is that they cant rely on cheap buy-to-let mortgages for ever.  They do need to think about acting to either purchase now on a long-term fix or to consider remortgaging to fix in historic low rates of borrowing.  I am.

Buy-to-let mortgages - all the market - free mortgage search

Thursday, December 10, 2015

£200m to build floodplain houses?

I'm not sure how wise this is ....

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Least surprising news of the week

This weeks most un-surprising news - the Bank of England keeps interest rates at at 0.5% for 81st month in a row.

The monetary policy committee voted 8-1 to maintain a 0.5% bank rate.

Continued low inflation and the UK's uncertain economic outlook meant the announcement came as no surprise... to anybody.

The current consensus of opinion is that interest rates are not likely to rise before at late 2016 at the earliest.

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Risky BTL lending on the up

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BTL King finally sells up

Fergus and Judith Wilson ( the King and Queen of BTL ) have finally sold up.

No doubt there are other landlords out there considering following their lead.

It might be the right time to go, with the current high house prices offering up an exit door before the Chancellor’s tax changes bite us right on the the bum.

The Wilsons portfolio allegedly has gone for over £250m to a foreign consortium. Their nine hundred homes were in Kent, mostly around Ashford. The deal is expected to be completed during the first half of 2016

Fergus cites, increasing regulation and the proposed tax changes as his reason to finally do the deal, saying -

“We reached an agreement today with a consortium of buyers to sell our entire portfolio for a figure exceeding £250m.”

There's more in the Telegraph on the Wilsons BTL portfolio sale

Gov. Wear and Tear Allowance consultations

The Government's Finance Bill 2016 plans to replace the Wear and Tear Allowance move on to the next stage.

During the 12 week consultation process, HMRC received just 170 responses. 137 of these were from individuals. ( a poor show by us)

So grab a cup of tea and have a read of the published Summary of Responses to Reform to the Wear and Tear Allowance, alternatively grab the iPad and order those last few Christmas presents from your list because, in short, they rejected any concerns about the change, and are to carry on with their plans - unaltered.

HMRC has announced a further 8 week consultation over their newly published draft legislation on the Reform of the Wear and Tear Allowance

The Government's response -

'The Government has decided to proceed with the introduction of the new relief, in place of the Wear and Tear Allowance, in Finance Bill 2016.

An updated impact assessment is included in the Tax Information and Impact Note that will be published alongside the draft legislation for this measure.

The Government has published draft legislation for technical consultation today. We would welcome any comments you have on the draft legislation. The consultation will run for 8 weeks.

If you have any comments on the draft legislation, please send them by email, if possible, to

Alternatively, comments may be sent by post to: Megan Shaw, HM Revenue and Customs, CTIS, 3/64, 100 Parliament Street, London, SW1A 2BQ.'

Other organisations who responded were -
  • Association ofAccountingTechnicians 
  • Association of Residential Letting Agents 
  • Association of TaxationTechnicians 
  • AW Tax Service Limited 
  • British Property Federation 
  • BKL Tax 
  • C Phillip Rees & Associates Limited 
  • Central Association of Agricultural Valuers 
  • Chartered Institute of Taxation 
  • Computershare (operator of the Deposit Protection Service) 
  • Council of Letting Agents
  • Crisis
  • Deloitte
  • Institute of Chartered Accountants in England and Wales
  • KPMG
  • London Society of Chartered Accountants (Taxation Committee) 17. Mazars
  • Mishcon de Reya Solicitors
  • National Landlords Association
  • Purvis Stevens LLP
  • Residential Landlords Association
  • Reynolds & Co Chartered Accountants
  • Select Accountants Ltd
  • Scottish Association of Landlords
  • Tax Aid
  • Thandi Nicholls Ltd

Wednesday, December 09, 2015

Rental demand strong say landlords

Rental demand continues to grow according to a survey of 2000 landlords.

The Paragon survey conducted by BDRC Continental for Q3 2015 had -
  • 41% of landlords report a rise in rental demand.
  • Rental yields, averaging at 5.6% nationally. 
  • One in 10 landlords reported yields of 10% or more.
  • Yorkshire and the Humber had the highest yields - 6.1%.
  • Outer London had the lowest rental yields - 4.8%. 
John Heron, Managing Director of Mortgages at Paragon comments

‘This research shows that yields, and tenant demand have remained strong throughout the third quarter, in common with 2015 overall. The figures reflect a steadily improving economic outlook for the UK as a whole and show that, more and more people are actively choosing the flexibility of making a home in the private rented sector,’ 

Yields too have remained stable throughout 2015. Quarter three data shows London and the South East slowing down somewhat, while yields in the regions are growing. This represents a welcome rebalancing of the national economy, with some of the heat from London’s economy escaping the M25 and being distributed around the country,’ 
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Tuesday, December 08, 2015

Halifax November house price stats

The November stats from the Halifax HPI have been published.

The bank reports a tiny fall in November, with the average house price down 0.2% (seasonally adjusted). 

The average property price is now £204,552.

Their housing economist, Martin Ellis, comments: 

"House prices in the three months to November were 1.4% higher than in the previous three months. This was the smallest rise on this measure since December 2014. The annual rate eased from 9.7% in October to 9.0%.

Solid economic growth, rising real earnings and falls in already very low mortgage rates have combined to stimulate housing demand this year.

The increasingly acute imbalance between supply and demand is causing prices to rise at a robust pace. A situation that is unlikely to reverse significantly in the short-term.”

Here are their most recent scores on doors -

Tempting tenants to stay

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Bradford's blight of take-away flats

The Bradford Telegraph and Argus claim Bradford is a rogue landlord hotspot.

Bradford Council is have submitted a bid to the Department of Communities and Local Government (DCLG) to take a share of the £5 million of funding by the Department of Communities and Local Government.

Bradford Council was one of 65 local authorities invited to apply for a share of the £5 million fund to help councils tackle rogue landlords announced Communities Secretary Greg Clark last month.

The Telegraph and Argos highlights the city's particular problem with poorly maintained residential flats above shops,  particularly those above takeaways. 

Last year, the Council received 1,262 complaints from tenants renting above shops,  resulting in more than 650 enforcement notices being served. 

Housing Minister Brandon Lewis has commented:

“The Government is determined to crack down on rogue landlords and this funding, alongside measures in the Housing and Planning Bill, will further strengthen councils’ powers to tackle poor-quality privately rented homes in their area.”

Beginners guide to buying a shop

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Live blogging on this morning's Housing Bill

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Greenbelt development shake up

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Monday, December 07, 2015

Listed Property Shows - 2016

For those of you who own, or those of you who are considering buying a listed property the Listed Property Show 2016 is to be held at  Olympia, London on 20-21 February 2016 and at the Harrogate International Centre, Harrogate on 12-13 March 2016. 

One interesting fact - 

owning a listed building can cost up to 50% more than a non-listed building
….. yet 50% of listed property owners are in lower socio-economic groups D-E.

The Listed Property Owners Club will be hosting 150 exhibitors and specialist suppliers, including  independent conservation officers and architects who will be happy to  give guidance on any development and restoration plans.

For more show information, lecture timetables and free tickets visit the Listed Property Show 2016 

Our most popular BTL mortgages

Max LTV Initial Rate Term Completion fee Booking fee Incentives Lender
85% 4.99% Discount 2 Years 2.5% £130.00 No Kent Reliance Semi Exclusive
85% 5.19% Fixed 2 Years 2.5% £130.00 No Kent Reliance Semi Exclusive
85% 5.29% Discount 2 Years 2.5% £130.00 No Kent Reliance Multi Let & Ltd Co. Semi Exclusive
80% 3% Fixed 2018-01-31 2.5% £150.00 Free valuation Mortgage Trust Exclusive
80% 3.29% Discount 2 Years 0% £0.00 No Hanley Economic Exclusive
80% 4.6% Fixed 2018-12-31 1.5% £150.00 No Paragon Premier
80% 4.85% Fixed 2018-12-31 1.5% £150.00 No Paragon Premier HMO
80% 5.39% Variable 0 Years 2% £0.00 No Saffron Light Refurbishment
75% 2.35% Fixed 2018-01-31 2.5% £199.00 Free Valuation Newcastle Building Society
75% 2.75% Fixed 2018-01-31 £2495 £150.00 Free valuation Mortgage Trust Exclusive
75% 3.69% Fixed 2 Years 2% £125.00 No Foundation Prime
75% 3.79% Fixed 2 Years 1.5% £100.00 No Axis Bank
75% 4.25% Fixed 2021-01-31 0% £199.00 Free Valuation & Free Legal fees (remortgage) Free Valuation & £300 Cashback (House Purchase) Newcastle Building Society
75% 4.59% Fixed 5 Years 2% £100.00 No Axis Specialist
70% 4.99% Fixed 2 Years 2% £125.00 No Foundation Light Adverse

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.

Another 'burst BTL bubble' narrative

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The latest interest rate rise speculation

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Miscalculated holiday home tax rules

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Saturday, December 05, 2015

Thursday, December 03, 2015

Landlords expected to be 100% right on immigrants

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Dep.Gov of BofE concern over BTL

The Bank of England's Deputy Governor, Sir Jon Cunliffe has added to the growing belief that the bank may soon get powers to regulate the BTL mortgage sector.

Talking to the BBC, the deputy governor warned - 

'action may need to be taken in the buy-to-let market following a sharp rise in the number of investors.'

His comments follows those of a concerned Financial Policy Committee's in this weeks Bank of England December 2015 Financial Stability Report.

BTL buyers will need 50% deposits
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.

Plymouth landlord fined £20k over gas boilers

A landlord has been fined £20,000 and ordered to pay costs of £2,817 by Plymouth Magistrates.
Landlord, Abdul Manik, 54, failed to act on a faulty gas boiler despite a Gas Safe registered engineer informing him the appliance was ‘immediately dangerous’.

The gas engineer who had been called to the rental flat by the tenant informed the HSE that the gas boiler 'could cause an immediate danger to life or property'.

The HSE inquiries found that Mr Manik had no gas safety certificate for a number of the flats at the property at Meadfoot Terrace, Plymouth. Despite being served an Improvement Notice, requiring him to undertake landlords’ gas safety checks, Mr Manik failed to have the work done in time to meet the notice's expiry date.

Wednesday, December 02, 2015

Architects call to end rabbit hutch homes

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England can't build the 300,000 homes it needs

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US rate rise could raise mortgage rates
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, December 01, 2015

Home owners confident about house prices

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BofE concern over BTL lending

The Bank of England December 2015 Financial Stability Report has been published.

In it, the BofE share their concern over the continued growth of the buy-to-let sector for UK financial stability.

The Financial Policy Committee are to keep a close eye on the BTL sector to see what impact this year's raft of tax changes announced by George Osborne will have.

The report shows the differing fortunes of BTL and homeowner lending -
  • BTL lending has grown by an average of 5.9% per year since 2008, compared with only 0.3% per year for owner occupier lending.
  • In  Q3 2015, BTL rose by 10%, compared to 0.4% for owner-occupiers. 

The report puts the growth in BTL down to a 'reduced availability of high loan to value (LTV) mortgage lending, which has increased the age at which many potential first-time buyers leave the private rental sector,' alongside the UK's continued high net migration.

The report recognises that BTL remains an attractive investment option thanks to -
  • high rental demand.
  • low interest rates on BTL mortgages. 
  • low returns on alternative investments. 

The BofE have concerns that any slip in BTL underwriting standards could have implications for UK financial stability, with BTL borrowers already more sensitive to a rise in interest rates due to affordability tests relating to rental incomes and not occupation incomes.

The report gives the example, 

'if mortgage rates rose by 300 basis points, the increment by which the FPC recommended the affordability of mortgages to owner-occupiers is tested, nearly 60% of buy-to-let borrowers who took out loans recently would see their rental income no longer covering 125% of their interest payments. By comparison, only 4% of recent owner-occupier borrowers would see their mortgage debt costs rise to above 40% of income, a level above which households are more likely to experience payment difficulties' 

The FPC states it 'remains alert to financial stability risks arising from rapid growth in buy-to-let lending and will monitor developments in buy-to-let activity closely following the tax changes to the buy-to-let market announced by the Chancellor in the Budget and Autumn Statement.'

The FPC is waiting a decision from HM Treasury to see if is handed similar powers to those it has over owner-occupier mortgage lending to help manage the BTL lending sector.

Rents surge to new high

According to the latest rental figures on real time data source the Rentindex rents have continued to climb.  This is despite the expected slowdown in rental activity as Christmas approaches.  Clearly landlords continue to feel confident that they can let their property and avoid the dreaded rental void over the Winter.

The Rent Index is currently showing that the average buy-to-let rent in England and Wales stands at just shy of £665.  This is a record level for the Index since it's beginning in 2008.

The average UK buy-to-let rent now stands at £100 above the level it stood at in 2008 just after the credit crunch.  Given that since then many landlords have seen interest charges on their main expense their buy-to-let mortgage collapse then its no surprise that many of us are making record rental profits.

Rents now stand at 3.4% up on last year and are showing a 4.4% increase over the last 6 months.

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