Manchester property auction - 16th March

The Edward Mellor property auction is due to take place on the 16th of March up at the AJ Stadium in Salford.

The auction current has 64 properties, largely 2/3 bedroom terraced houses located across the north west.

For more information Tel: 0161 443 4740

The catalogue for the Edward Mellor property auction, 16th March 

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If rates rise by 2.5% landlords will be in jeopardy

Forget rental profits, many landlords could soon be running their rental businesses at a loss, reliant on capital growth to off-set an otherwise unsustainable situation according to research by property crowdfunding platform Property Partner.

If interest rates rise by 2.5%, it will push the average UK BTL property into a loss, with an estimated  annual loss of £325 by 2020 and the introduction of Osborne’s mortgage tax relief changes.

They predict that Salisbury, would be the worst hit region - with a prospective loss of £2,984 per year if rates rose 2.5% by the time Osborne’s mortgage tax relief changes came into full effect.

Just 19% of UK towns and cities will see their average BTL property continue to make a net rental profit of more than £100 a month, in the event of a 2.5% rise.

Instead of rental profits, from 2020 onwards, buy-to-let returns would be reliant on capital growth.

The chancellors mortgage interest tax changes could affect 1.7m mortgaged BTL properties.



London, 29th February 2016 -- If interest rates rise by just 2.5% over the next four years, traditional buy-to-let could become unprofitable in seven out of ten UK towns and cities and the average investment property would be making an annual loss of £325, according to research by property crowdfunding platform Property Partner.

Property Partner looked at more than 100 of the largest towns and cities in the UK, to see what impact interest rate rises, coupled with the changes to mortgage interest tax relief, would have on local buy-to-let markets. By 2020, buy-to-let investors will have lost higher rate tax relief on their mortgage interest payments.

Property Partner’s researchers took an average property, let out at a rent typical of the area in each of the towns and cities studied. They then assumed the property was mortgaged with a 60% LTV buy-to-let loan, fixed for three years at 3%**.

Taking the country as a whole, the average annual net profit would be £3,419 today, but would fall to £2,555 by 2020, even if rates remained at 3%, as a result of the phasing out of mortgage interest tax relief. That’s an average drop of £864. But the figures are even starker if interest rates were to rise 2.5% by 2020, with the same average buy-to-let making a loss in more than two thirds (69.8%) of towns and cities, with an average loss of £325 per year.

Which towns and cities will fare the worst? In Salisbury, buy-to-let landlords currently make an average annual profit of £2,200. By 2020, with both a cut in mortgage tax relief and a modest 2.5% rise, they will feel the full impact with debts mounting to £2,984 per year - that is a swing in fortune of £5,184. In Cambridge and Winchester, the reverse in fortune would be even greater, with healthy profits turning into hefty losses. In Cambridge, the average profit today is £4,257 but would plummet into the red with a £2,418 annual loss in 2020. Similarly, in Winchester, an annual profit today of £5,835 would be wiped out, and landlords would be facing an annual debt of £2,169.

The figures also reveal that 11 out of the 20 towns and cities worst hit by the changes to mortgage interest tax relief and a 2.5% rise in interest rates are in southern England. Also, less than one in five (19%) UK towns and cities will make a net rental profit of more than £100 per month.

The following table shows the 20 worst hit towns and cities in the UK in the event of a 2.5% interest rate rise

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Regional tenant percentages by 2025

Ain't nothing going on but the rent. How Britain's housing market will look in 2025 https://t.co/pO4ccz7eqi pic.twitter.com/kOzsyAFGq9

— Mark Doyle (@markdoyle71) February 26, 2016

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London - a city of renters by 2025

London set to become a city of renters by 2025 https://t.co/h1UAcEqOBC pic.twitter.com/Uemi4uRY85

— ES Homes & Property (@HomesProperty) February 29, 2016

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Small scale developers need cash

I've carried out a fair few property refurbishments in my time. Everything from a total refurbishment of a 4 bed derelict property to a quick refurb and refresh of a small one bed apartment. I was reminded of some landlords looking to make a quick development property following a chance meeting at the gym with an old friend who was asking me about raising property finance trough his bank.  Small cost developers need to remember that obtaining finance rarely works out as being cheap.  By the time, bridging finance, set up fees and high levels of interest are factored in then even a small loan can have set you back £5-10 k.

Property development strategy

 Partly because of the above, my strategy apart from one failed attempt has always been to refurb to let. The reason been that for this is that for a small scale developer there rarely is enough in the project to make all the hard work worth it. For instance if you take the hypothetical project of a 2 bed apartment which costs £200,000 a reasonable development profit would be between 10 and 15% generating a net profit of between £20,000 and £30,000. For most people the thought of a even £20,000 for 6 months extra work sounds very attractive and well worth doing with an average wage probably being £25k.  Those who remember the charismatic Sarah Beeney and Property Ladder will recall how time after time some hapless amateur developer would make a fortune from doing up a property wreck.  However the reality is that most would have made money because of the rising market and would have often made more by buying an empty property and sitting on it (without the associated work and hassle).

Finance for small scaled property developments

The route for many small scale property developers is to fund the purchase and development through a bank.  This involves obtaining the approval of your bank manager, the payment of a setting fee and then the ongoing premium interest rates whilst the project continues.  As well as the finance fees you will have the usual legal and associated purchase costs.  For 2nd home and buy-to-let purchasers they will face a 3 % surcharge from April 2016.  All these additional purchase and finance costs not to mention the legal costs when selling (estate agent say 1.25% of the selling cost along with legal fees) all mean that to make money from small scale property development without the tailwinds of a rapid rising house prices mean that genuine opportunities are few and far between.  Having said that I'm currently undergoing one myself but with the benefit of cash I'm not under the pressure of having to pay the interest costs on a loan, bridging loan or mortgage whilst the property is empty.  I have also avoided the sizable upfront set up finance fees and any redemption charges.

In the current climate with competition for property development projects being as intense as ever I cannot imagine what it would be like trying to make money without the luxury of having cash to purchase and then refurbish the property.  Cash for small scale single developments is king.  Without it I would not hope to make a reasonable return unless a landlord was looking at the long-term as is the case in a refurbish to let project.

For more advice on other BTL finance

Net immigration of 323k

Net migration was 323k in the year ending Sept 15, Immigration = 617k and Emigration = 294k https://t.co/EH3m2GS0hp pic.twitter.com/e2lrCFhgQx

— ONS (@ONS) February 25, 2016

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More families renting

More families are renting and fewer people expect to ever own a home https://t.co/wmzfM0CeWI #ukhousing

— Guardian Housing (@GuardianHousing) February 25, 2016

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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
85%	5.19% Fixed	2 Years	2.5%	£130.00	No	Kent Reliance
85%	5.29% Discount	2 Years	2.5%	£130.00	No	Kent Reliance Multi Let & Ltd Company
80%	4.6% Fixed	2019-03-31	1.5%	£150.00	No	Paragon Premier
80%	4.85% Fixed	2019-03-31	1.5%	£150.00	No	Paragon Premier HMO & LTD Company
80%	5.39% Variable	0 Years	2%	£0.00	No	Saffron Light Refurbishment
75%	2.35% Fixed	2018-04-30	2.5%	£0.00	Free Valuation (on properties up to and including £500,000)	Newcastle Building Society
75%	3.49% Fixed	2021-04-30	2.5%	£0.00	Free Valuation (on properties up to and including £500,000)	Newcastle Building Society
75%	3.49% Fixed	2 Years	1.5%	£100.00	No	Axis Bank
75%	4.59% Fixed	5 Years	2%	£100.00	No	Axis Specialist

 

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.

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The end of BTL's golden age

Is this the end of a golden age for buy-to-let investment in the UK? New Savills analysis: https://t.co/aOHLewONKX pic.twitter.com/pnC7PLONkQ

— Savills (@Savills) February 25, 2016

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Harder for homeless to rent property

Benefit changes make it harder for homeless to rent property, says Crisis https://t.co/ba1nf0DNdn #ukhousing

— Guardian Housing (@GuardianHousing) February 25, 2016

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BBA report BTL mortgage surge

The BTL surge seems to be continuing. Latest figures from the British Bankers' Association ( BBA) reports its members approved 47,509 mortgages in January for house purchases.

That's 27% higher than January 2015.

The BBA chief economist Richard Woodhouse comments -

"The start of the year has seen a significant rise in mortgage borrowing. It seems that this has been driven, in part, by borrowers looking to get ahead of the increases in stamp duty for buy to let and second home buyers scheduled to come into effect in April" 

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Potentail BTL investors put off by tax changes

Online investment platform, Rplan claim that potential BTL investors have been put off by April's looming stamp duty changes on second homes and the changes to tax relief for landlords. 

Stuart Dyer from Rplan comments - 

'The British have strong faith in property as an investment and many see it as a means of providing a pension income. But the government clearly has a policy to dis-incentivise BTL and the sharp increase in landlord mortgages revealed by the Bank of England credit survey will probably be a last rush before the gate slams shut,’

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Build to rent target Crossrail hotspots

Developers are targeting Crossrail hotspots in a move towards build-to-rent homes: https://t.co/h1UAcEqOBC pic.twitter.com/GoS1O4NpXy

— ES Homes & Property (@HomesProperty) February 25, 2016

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Rents down as a proportion of income

RESIDENTIAL: Outside London, rents as a proportion of income are down on 2007 levels https://t.co/v9xqoaGkXX pic.twitter.com/mobR6bYF61

— estatesgazette (@estatesgazette) February 24, 2016

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Tips for a 'successful BTL business'

How to make your buy-to-let business a success: https://t.co/Ib0ympojI3 pic.twitter.com/0Gsze0nbN4

— ES Homes & Property (@HomesProperty) February 22, 2016

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Rent in Swindon rose 4 times faster than London

Rent in Swindon and Luton rises four times faster than in London says https://t.co/GYNDwLLJjL https://t.co/YZ0cQgzuva

— This is Money (@thisismoney) February 23, 2016

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Scottish rents remain the same

According to Your Move's Scottish BTL index for January 2016

• Average rent remains at £548 pcm, an annual rise of 2.3%
• There were regional variations - annual rental growth in Edinburgh & Lothians up 6.4%, whilst East of Scotland fell by1.7%
• Rent arrears are falling, and are now at their lowest rate since July 2015

Read in full - Your Move's Scottish BTL index for January 2016

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A kind of, FTB meets BTL mortgage

Bath Building Society launches a Rent a Room mortgage https://t.co/v6RAB6ebCt

— This is Money (@thisismoney) February 23, 2016

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Wales looks at council tax surcharge on second homes

Wales considering council tax surcharge on second homes https://t.co/LzCrzgUHLA #ukhousing

— Guardian Housing (@GuardianHousing) February 23, 2016

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1 in 4 20-34 years live with parents

The changing demographic of renters.

As more youngsters stick at 'mum and dads' the average tenant has got older ... and hopefully wiser.

Why are more young people living with their parents? https://t.co/kS4JiCBTlk pic.twitter.com/xcm7v7hAql

— ONS (@ONS) February 22, 2016

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10,000's of London homes 'long term vacant'

Tens of thousands of London homes deemed 'long-term vacant' https://t.co/Rmuq2IGuFl

— The Guardian (@guardian) February 21, 2016

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The best cities for landlords to invest

From £75k: the best UK cities for would-be landlords to invest: https://t.co/P8lAGGGsaK pic.twitter.com/rud93btD2I

— ES Homes & Property (@HomesProperty) February 23, 2016

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How do you solve the housing crisis?

We're nowhere near building 200,000 new homes a year. So we asked four experts: how do you solve the housing crisis? https://t.co/4iMoRjoSRn

— Telegraph Property (@TeleProperty) February 22, 2016

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Brits love to fantasise over property

Although market transactions are low, Rightmove's stats show we still love property, or at least fantasising about it on our iPads... ensuite with a bidet, four double bedrooms. a garage, mmm, with an up and over door...mmm.

Busiest month for Rightmove as visits up 21 million year on year: https://t.co/LO20roqL2q #property #news

— Rightmove (@rightmove) February 22, 2016

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How bad is 'Buy To Leave?'

How bad is 'buy to leave' really?https://t.co/vniyC3LwtG pic.twitter.com/WQq52x3SiY

— House & Home (@FTHouseHome) February 22, 2016

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Louth landlord fined £5,000

A Lincolnshire landlord has been fined £5,000 for not complying to the Improvement Notice issued by East Lindsey District Council.

The rental property in Louth belonged to James Stuart White.

The court heard how the landlord had failed to make the required improvements - window repairs, installation of extractor fans, added insulation and a full electrical safety check and was subsequently fined £5,000 under Section 30 of the Housing Act 2004.

Local Councillor, William Gray commented on the case:

‘It is important that landlords understand their responsibilities. If we inspect a property and find a number of issues that need rectifying, we will take necessary action to ensure the safety of tenants. I would urge any landlord to work with the council to prevent legal action having to be taken.’

On top of the fine, Mr White was also told to pay costs totalling £1,607.

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ONS age statistics on renters

9 out of 10 householders aged 20 to 24 were renting in 2015 https://t.co/bhTLxhFTPU pic.twitter.com/qUd9OBrIm8

— ONS (@ONS) February 22, 2016

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North-south divide widens

The north-south divide has worsened according to Savills data in the Times.

Savills reflect that in 2005 the average Greater London home cost £289,939, equal to one and a quarter homes in the south east, or just over two in Yorkshire or Wales. 

However, ten years on, and the average Greater London home hit £539,519 in 2015, an equivalent of more than three average homes in northern England, Wales or Scotland.

Lucian Cook from Savills comments -

“London’s housing market, particularly in the centre, was effectively over the recession by the end of 2009 and continued its recovery very quickly. Places like the north of England and much of Wales, by contrast, haven’t been able to do the same. They’ve less inward migration and so less demand, and they‘re still tackling some de-industrialisation”

London has also pulled away from other regions, such as the south-west, where the average house price ratio between London and the SW has increased from 1:1.5 in 2005, to 1:2 in 2015.

Cook goes on - 

“There’s been less of a ripple effect than usual from London to the rest of the south. Between 1995 and 2005, for example, London pulled away from the rest of the south but then those regions caught up. That hasn’t happened in the past 10 years.”

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Student landlords - inclusive utility package

I was a student landlord once for a very short 9 month run and decided it wasn't for me.  Too much hassle with tenants moving in and out.

However, I know that multi let student properties can be very lucrative so I'm not knocking the business model.  Many student landlords I know offer all inclusive packages that cover the costs of heating, electricity, etc.  I'm guessing there are risks their that the tenants use much more than is reasonable.

I've come across this new service from specialist student landlord utility provider Glide that offers a risk free package for landlords.  I've no idea whether it's any good so maybe student landlords can let me know.

I've had problems recently with utility companies doing the opposite; where I've actually had empty properties and have been charged ridiculous standing charges for not using any power #annoying / #veryannoying.

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London house prices 'sustainable'?

London house prices have risen from 2.7x earnings to 9.6x pic.twitter.com/ZdbuDjk9QW

— Henry Pryor (@HenryPryor) February 20, 2016

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Chart showing UK buy-to-let loans

Buy-to-let loans totalled 70,500 in Q4 2015, down 1% on Q3 but up 31% year-on-year. https://t.co/Sy4lET7Pai pic.twitter.com/XuChtTc4Ff

— CML press office (@cmlpressoffice) February 16, 2016

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Council tax is regressive

These five maps show why council tax really is regressive and absurd https://t.co/fGvpeBpEJN pic.twitter.com/zPVUrV2Hkw

— The Conversation (@ConversationUK) February 18, 2016

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Grey clouds on the property horizon

Property prices are still on the rise.  According to the latest stats from Rightmove the average asking price has now reached an incredible £300,000. Wow!  The latest ONS  house price index for December shows that house prices continue to rise by 6.7% over the year.

Can house prices keep going up? 

Can prices keep going up?  Well yes and no.  The reason for house prices continuing to increase are that with interest rates at historic lows housing affordability is at an all time high.  There is also no shortage of demand for residential property as high rates of immigration and frustrated renters look to climb the housing ladder.

Boom and bust bubbles

Don't belief the hype though.  You only have to look to a country like Japan which had their own massive property crash to see that house prices don't have to keep on rising. Globally we have witnessed a spate of enormous asset price bubbles in the last 15 years characterised by massive in flows of capital pushing prices in specific markets higher followed by the inevitable crash as the hot money goes elsewhere.  Remember the 'tech boom' in shares, then we had a property boom aided by a credit boom and most recently a commodity boom off the back of the perception of a booming China.  All of these were followed my MASSIVE busts.

Lets not forget that residential property in the UK would and some say should have been added to this list.  It was only saved by the Government taking unprecedented monetary policy steps by reducing interest rates to historic low levels to support lending, affordability and confidence.  Let there be no doubt, without this interference the residential property values would have hit the floor exacerbated by a 1930s type depression.  In essence the government made the decision that the UK housing market was too big to fail because it would have dragged down the entire economy.

The residential property paradox

The apparent resilience of the UK residential property market has only help support the urban myth that your money is always safe in 'bricks and mortar'.  The paradox for politicians and policy makers is that property has an almost mythical status as an asset class.  When we are worried we put money into housing because it's an investment we think we understand.  When we are happy we splash out on a bigger house to celebrate.  As consumers we act like a incurable food addict feasting when happy but then equally gorging during the down times to cheers us up.

Banks are key to property prices

As we found in the credit crunch, without banks being able to lend house prices become vulnerable.  The events in the credit and stock markets with banks under threat last week suggest that to view housing as a risk free investment may not only be naive but dangerous.  Having said that I'm about to purchase my most expensive property yet.  Like everybody I'm caught in that property paradox knowing that property is not undervalued and cheap even if it is currently affordable but values remain susceptible to changes in the health and lending practices of banks.  The one thing in it's favour is the unwavering support of government and the fact that the sector is too important for the Government to allow large scale house price falls.  However, every investor needs to be aware that there are risks so go into property investment with your eyes open.

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Roof pods - add value to property

Renovation Revolution: roof pods https://t.co/g8ciPlb8gx pic.twitter.com/OkcRMLpzhZ

— Telegraph Property (@TeleProperty) February 16, 2016

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Another week in buy-to-let!!

A Landlords problems are 'electric'

Monday- here we are:)

I've already had a call from my electrician to update me on progress in the Penthouse (painfully slow).  The consumer unit is in (aka RCD unit).  It now has to be metal to meet the latest electrical safety standards so this is a little heads up for any landlords looking at refurbishing a property.  None the less RESULT!

The other thing electrical is one of my tenants has been having problem with their Gloworm thermostat.  So one of my jobs this morning is to sort and order a new one.  Dilemma being should I go for the same on the basis it should be easy to swap or should I change given that the last version really didn't last very long.  Landlords frequently get this.  If you buy something new (it might be better or because you can't get the original) sods law means that the fixings, wirings, plumbings will not allow a straightforward replacement.

Micks also been on the blower as I was entering the Tesco car park promising a little bit of skip action. The Penthouse is now fully stripped out but with most of the debris lying in state in the lounge.  Access and parking at my gated citadel continues to be a problem.  Just a little heads up for all those landlords who consider buying a city centre or London refurbishment project.

So here we go...another week in buy-to-let.  "money for nothing"...I don't think so!

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London codes with greatest rental supply

With 11 hopeful renters for every room, discover the postcodes with the greatest supply: https://t.co/QyIWbZb2f8 pic.twitter.com/NJNW4xQVa7

— ES Homes & Property (@HomesProperty) February 11, 2016

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How would you fix 'renting'?

If you could see one change made to #fixrenting what would it be?
Tell us now: https://t.co/MtYOIrL8kF pic.twitter.com/q04oe861i7

— Shelter (@Shelter) February 8, 2016

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Buy-to-let mortgages hit 9 year high

Approvals for buy-to-let mortgages hit a 9 year high in January at 85,432 according to e.surv mortgage monitor. 

This is up 39.3% on the year previously.

The jump is put down to s surge in buying activity by landlords as they race to beat the April 1st hike in stamp duty on buy-to-let and holiday home purchases. 

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The rise of Airbnb in major cities

Data: @Airbnb’s housing stock in major cities is on the rise. #RICSModus #Airbnb pic.twitter.com/OREBflyRFy

— RICS in Europe (@RICS_Europe) February 11, 2016

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Rise in number of properties for sale

Rare rise in number of homes for sale - but it's not enough to satisfy huge demand https://t.co/o3jH6nvlTU pic.twitter.com/5KuDZyyRRO

— Telegraph Property (@TeleProperty) February 11, 2016

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London's top areas for rental returns

The top 20 London areas offering the best rental return https://t.co/TP8ETrhjB5 pic.twitter.com/LSNaJMehQD

— ES Homes & Property (@HomesProperty) February 10, 2016

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Most UK regions report rent increases

Rents  are up in 11 out of 12 regions in the UK according to the latest rent index from HomeLet. 

Homelet puts the average rent, excluding greater London at £740 pcm, whilst the capital's average rent hit £1,510 pcm, which though still rising, but at a slowing pace

The only region to record a fall, was the North West, where average rent dropped by 3.4% to £624.

Homelet Chief executive Martin Totty comments:

‘It’s notable that there has been a further fall in the rate at which average rents in the Greater London area are rising. In recent years, the capital has seen much faster rates of increase than the rest of the country, but it may be that an affordability ceiling has now been reached in London and that rents will now track other parts of the UK more closely.

The fact that UK wide average rents in the private rented sector continue to show sustained upwards growth reflects there is still strong demand for rental properties, driven mainly by the impact of the long term structural imbalance in supply and demand of property.

Landlords achieving higher average rents over time also suggests that tenants starting a new tenancy are proving they can afford higher average rents. With demand outstripping supply, some would-be tenants may be able to outbid rivals for properties, which could drive higher rents.’
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RICS predict rush of BTL investors

RICS surveyors are predicting a rush of BTL buyers wanting to get in before the April stamp duty change.

The latest RICS Residential Market Survey predicts -

• Increased interest from BTL investors will push up prices 
• Property prices and rents to rise over the coming year

Three quarters of RICS surveyors who took part in RICS Residential Market Survey for January expect increased activity from BTL investors wanting to buy before the Stamp Duty changes.

Surveyors also reported a slight rise in properties coming to market across the UK, particularly in London, easing supply/demand pressures.

RICS, chief economist, Simon Robinsohn commented: 

'The rise in new instructions in January, although modest, is very welcome.

However, with buy to let investors rushing to get into the market ahead of the stamp duty hike, the near term pressure on prices is if anything intensifying despite a higher level of supply.'
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BTL investors push up prices

Buy-to-let investors swerving April's stamp duty hike push up property prices as number of homes coming up for ... https://t.co/cbH4KA0uDA

— This is Money (@thisismoney) February 11, 2016

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RLA warning on stamp duty schemes

The Residential Landlords Association policy director David Smith is warning against firms promising landlords they can help them avoid paying the 3% stamp duty surcharge on second properties. 

“Landlords should be very careful about making plans for their property purchases until after the budget. Any property purchases must be completed before April 1 if the buyers want to avoid paying the new levels of Stamp Duty Land Tax. The Treasury has made it abundantly clear that anyone offering schemes to get around the changes is talking nonsense”

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Manchester buy-to-let opportunities

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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Average property to hit £1m by 2032

Average home in Britain to cost over £1million by 2032 https://t.co/6eokZekqt5 pic.twitter.com/P1CWGEFEP0

— Telegraph Property (@TeleProperty) February 8, 2016

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No issue with BTL funding in 2016

Buy-to-let funding ‘will not be an issue’ in 2016 https://t.co/QD9aeeNPNo

— FTAdviser (@FTAdviser) February 9, 2016

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Rent inflation and earnings gap grows

The growing gap between rent inflation and earnings. @JohnBibby4 on rents grinding upwards: https://t.co/Yf6MEkOkxA pic.twitter.com/mcnsheXaE7

— Shelter (@Shelter) February 8, 2016

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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'....

More problems in the new-build sector - real price falls are sure to come, thinks @MerrynSW https://t.co/OpkK2SXNOi pic.twitter.com/GwnbEtNR3Q

— MoneyWeek (@MoneyWeek) February 8, 2016

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

Mortgage rates hit nine-year low https://t.co/ibyyB2jOIW

— Telegraph Finance (@TeleFinance) February 8, 2016

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Allsop resi-auction - 18th Feb

26 £1m+ lots in our resi #auction - 18 Feb. Including flats, houses & offices with PD rights https://t.co/igpJY4VM4m pic.twitter.com/o3nS5KumxL

— Allsop (@AllsopLLP) February 4, 2016

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A global property valuation comes in at...

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

The total value of all developed real estate in the world is US$217,000,000,000,000: https://t.co/VDF2Q5GEf8 pic.twitter.com/s9OLiRCkAO

— Savills (@Savills) January 25, 2016

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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.

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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.

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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.

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.

Monopoly map of London rents

Monopoly map for Generation Rent reveals the spiralling cost of being a London tenant https://t.co/DzU3lm3Swh pic.twitter.com/oDyfK7QZXG

— ES Homes & Property (@HomesProperty) February 3, 2016

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Landlord fined for letting Right to Buy

Landlord fined for renting out her Right to Buy home - https://t.co/Zt9Hv11t0w #ukhousing

— 24housing Magazine (@24housing) February 3, 2016

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500,000 landlords poised to sell

Buy-to-let landlords poised to sell 500,000 homes in a year https://t.co/Dry7tz0dr4 pic.twitter.com/34fqJ3G1Q1

— TimesBusiness (@TimesBusiness) February 3, 2016

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Rental demand to rise over next 5 years

Demand for rented homes in the UK will rise by more than one million households over the next 5 years: https://t.co/6AZr26V8fG

— Savills (@Savills) February 3, 2016

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'Generation Rent' to swell by 1 million

‘Generation Rent’ to swell by 1m over next five years — FT https://t.co/Ne9q4c6yIT

— EmanuellaWatsonGandy (@ewatsongandy) February 2, 2016

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Allsop's February auction catalogue

333 lots from around the UK in our 18 February residential #auction catalogue. Browse online https://t.co/igpJY4VM4m pic.twitter.com/AAPzhdnxHo

— Allsop (@AllsopLLP) February 2, 2016

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Property demand outstrips supply

Property prices rise across the country as demand outstrips supply https://t.co/CihPHhp0v2

— Telegraph Property (@TeleProperty) January 29, 2016

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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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Blair fights for landlords (not Tony )

Cherie Blair steps into landlord mortgage tax relief battle as her legal firm claims the move breaches human ri... https://t.co/fXjjc0AxXJ

— This is Money (@thisismoney) February 1, 2016

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Interest rates may stay on hold for 2016

Interest rates could stay on hold for rest of year as economy slows, Bank of England to signal this week https://t.co/JXjWpnTFNw

— This is Money (@thisismoney) January 31, 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 -

Download the user guide for making Right to Rent checks from GOV.UK: https://t.co/Xy6JV3Azkn pic.twitter.com/LqO2ChOv6D

— Home Office (@ukhomeoffice) January 21, 2016

Checking a tenant’s Right to Rent is easy – follow the simple steps at: https://t.co/OFM5QltyBu

— Home Office (@ukhomeoffice) January 20, 2016

The England roll out for Right to Rent starts in Feb, read the updated code of practice here https://t.co/5imW3SpVvp

— ARLA (@arla_uk) January 19, 2016

"The role of landlords on the frontline of immigration control is only just beginning" #ukhousing https://t.co/EM6kMjsKsC

— Guardian Housing (@GuardianHousing) February 1, 2016

Buy-to-let landlords must check the immigration status of new tenants from today or face fines of up to £3,000 https://t.co/65Nz3ulaCf

— This is Money (@thisismoney) February 1, 2016

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