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Lenders under fire from landlords who are keen to expand

Confidence among landlords is high, with three in five planning to expand their portfolios over the next six months, according to specialist mortgage broker Mortgages for Business.


While the majority of investors (63%) will need to remortgage existing properties to fund their expansion, a similar proportion (62%) believe lenders are not doing enough to support landlords and property investors.


The results come from a Mortgages for Business survey of 185 landlords.


One in five (20%) feel that lenders should reduce their fees, while 18% believe lenders should increase LTVs and 15% feel that lenders should make lending decisions case by case, rather than rely on computers and credit scores.


Four-fifths (81%) of property investors intend on investing in vanilla – or ordinary – buy-to-let property over the next six months.


However, 22% plan on expanding their portfolios with Houses in Multiple Occupation, 15% with multi-unit freehold blocks, and 14% with commercial or semi-commercial property, all of which provide higher average yields for investors.


David Whittaker, managing director at Mortgages for Business, said…


“Although overall mortgage and lending to first-time buyers is finally starting to increase, landlords remain confident about the future of the private rental market and plan to expand their portfolios over the coming months.”


“However, more and more investors are exploring which options will give them the best returns on their investment.”


“While vanilla buy-to-let properties remain popular, more complex deals are offering higher yields on average and are growing in popularity, particularly because of the shortage of housing stock currently on the market.”


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Categories: Buy to Let, House Prices, House Renting, Uncategorized.

By admin
— 26/03/2012 at 4:55 pm

Landlords reminded of upcoming EPC regulations

Landlords have been reminded that changes to the legislation surrounding Energy Performance Certificates (EPC) is going to impact the private rented sector (PRS).


The National Landlords Association (NLA) noted from April 6th, letting agents and owners of rented property will have a week to produce an EPC when they begin advertising a home for new tenants, instead of the previous 28-day deadline.


Prospective occupants will also have to be shown the full report on energy performance, instead of just a graph detailing fuel efficiency.


This document will contain recommendations regarding how to improve the eco-friendliness of a particular home and shall give tenants an indication of how much it will cost for them to run the house.


EPCs will be mandatory for all dwellings in the PRS and detail the environmental impact and sustainability of a particular structure.


NLA EPC representative Nigel Hoath said…


“These changes mean that it is even more important for landlords to have a fast and efficient supplier of EPCs.”


Qualified Domestic Energy Assessors must undertake these evaluations, the organisation pointed out.



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Categories: Health and Safety, House Renting, Illegal, Uncategorized.

By admin
— 26/03/2012 at 4:24 pm

Recession ‘makes live-in landlords socially acceptable’

The recession has caused the number of homeowners looking to rent rooms out to lodgers to shoot up in recent years.


This is according to director at SpareRoom Matt Hutchinson, who explained how the financial pressures have forced some people to look for alternative means to make extra money.


He noted the idea of people being a landlord within their own home no longer has the stigma attached to it and more and more young professionals see it as a reputable option.


Mr Hutchinson said…


“The need is there and also, as more people do it, it becomes an easier thing to do and a more acceptable thing to do”.


It was suggested that…


“The current shortage of rental accommodation means there will always be demand for rooms”.


Mr Hutchinson’s comments follow a recent report from Easyroommate that revealed the number of live-in landlords across the UK has increased by 19 per cent in the last six months.


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Categories: Finding Tenants, House Renting, Housing Benefit, Uncategorized.

By admin
— 26/03/2012 at 4:20 pm

Asking price rents rise again, but over one in ten tenants struggle

Rents rose in January, in an unusual start to a new year.


According to LSL, it was the first time on record that there has been a January increase in rents. Rents were 4.3% up on average from January 2011.


But tenants are struggling with their rents, with 10.7% of all rent either late or unpaid during the month.


LSL, parent company to the Your Move and Reeds Rains chains, put January’s average asking rent in England and Wales at £712 a month.


Rents rose the fastest on a monthly basis in the West Midlands and South-West, where they increased by 1.8% and 1.5% respectively. Rents rose by 0.8% over the month in London, where they have only fallen once in the past 13 months.


However, rents fell in four regions. The biggest declines were in the East of England and Wales, where they fell by 1.7% and 1.5%.


In the last 12 months rents have risen in all regions of England and Wales but one. The largest annual increases were in London where rents rose by 6.3%. The next biggest increase was in the East of England where rents rose by 5.9%.


Rents fell in the North-East by 0.7%, although the rate of annual decline slowed from 1.3% in December.


David Brown, commercial director of LSL Property Services, said…


“Mortgage lending has shown signs of improving in recent months, but transactions remain at almost half their historic levels, and the increasing dependency on rental accommodation will drive further rent rises over the long term.”



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Categories: Buy to Let, House Renting, Landlord Advice and Information.

By admin
— 11/03/2012 at 6:34 pm

Research shows 1 in 3 live in rented property

New research has revealed one in three families and individuals live in property rented from a private landlord.


According to the Daily Mail’s This is Money, this is the largest proportion of the UK population since 1988.


Only 66 per cent of homes are owned by those who live in them, which has fallen from 71 per cent nine years ago, figures from the Department for Communities and Local Government show.


Difficulties accessing mortgage lending and the impact of the economic situation on incomes is said to have led to an increase in individuals having to rent property for longer.


The study revealed just ten per cent of homeowners are under 35, with competition for private rented homes remaining strong among this age group.


Letting agent and property services group Countrywide recently reported a 24 per cent increase on the number of people living in this form of accommodation in 2010.


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Categories: Buy to Let, Finding Tenants, House Renting.

By admin
— 11/03/2012 at 6:31 pm

Landlord behaviour ‘remaining stable’

The behaviour of long-term investment landlords has remained stable in recent months, despite claims to the contrary, according to one expert.


In an interview with Stroud Life, Debbie Vowles of Andrews Letting & Management explained how there has been relatively little change in the sector.


Vowles said…


“We have seen some people looking to sell their rental properties over the past few months, but this has tended to be what we would describe as reluctant landlords.”


It was also claimed that…


“Those who purchased abodes with a view to long-term investment have remained consistent.”


Ms Vowles’ comments follow a recent report from the Association of Residential Letting Agents that suggested rental property sales rose from six to eight per cent in the final quarter of 2011.


The body explained how there has also been a rise in the number of “reluctant landlords” entering the market, due to individuals finding it difficult to sell their homes.


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Categories: Buy to Let, Finding Tenants, House Renting.

By admin
— 11/03/2012 at 6:28 pm

Buy-to-let investments ‘need to be carefully considered’

Landlords have been advised to take a cautious approach when looking to invest in new property.


With buy-to-let purchases on the rise, the Landlord Syndicate has warned individuals to carefully consider location, affordability and commitment in order to avoid making the same mistakes as last time.


Simon Thompson, chairman of the organisation, stated…


“For the foreseeable future, capital growth will be negligible and hence rental yields are crucial, demonstrated by the fact that lenders view rental yields more critically than in the past.”


It was noted that location is the key to a good return, with landlords advised to focus on areas with high owner-occupier status, safety, decent transport links, good schools and family orientated communities.


Member of the Landlord Syndicate Nick Lyons explained…


“This is the best strategy for long-term growth.”


The comments follow recent remarks from director at Landlord Mortgages Lee Grandin, who explained the buy-to-let market remains a profitable option.


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Categories: Buy to Let.

By admin
— 11/03/2012 at 6:24 pm

UK homes rise in value by 84% in 10 years

Investors may be inspired to purchase buy-to-let properties and become landlords after hearing how the value of homes in the UK has risen by 84 per cent in the past decade.


Halifax’s Value of Housing Stock review revealed that between 2001 and 2011, owner-occupied and privately rented abodes increased in value by £1.8 trillion.


By the end of last year, the total worth of UK homes was estimated at £3.9 trillion, which is up from £2.1 trillion ten years previously.


Martin Ellis, housing economist at Halifax, noted…


“Mortgage debt has more than doubled in this time frame, while the value of the housing stock has risen by more in monetary terms”.


The expert added…</p>


“For most homeowners, housing is still very much the main store of private wealth.”


In December, house prices declined 0.2 per cent, but were up one per cent in 2011 as a whole, according to the latest figures from Nationwide.


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Categories: House Prices.

By admin
— 27/02/2012 at 3:22 pm

Buy-to-let investments rise in fourth quarter of 2011

Letting agents reported a rise in buy-to-let business in the final quarter of 2011, according to a new report.



Research by Paragon Mortgages revealed interest in the sector increased from 19.3 per cent in the final three months of 2010 to 23.3 per cent a year later.



Buy-to-let mortgages were sought by 40 per cent of landlords in a bid to expand their existing property portfolio, the study found.



Meanwhile, the number of first-time landlords applying for this type of loan increased from 19 per cent in the third quarter of 2011 to 23 per cent in the following three months.



Managing director of Paragon Mortgages John Heron remarked…


“With record levels of rental demand being reported it is good to see that existing landlords are increasing the size of their portfolios.”



He also welcomed the rise in the number of individuals looking to purchase and then rent out an abode for the first time.



Mr Heron’s comments follow recent figures released by property services group Countrywide, which showed interest in renting a home rose by nearly a quarter in 2011.


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Categories: Buy to Let.

By admin
— 27/02/2012 at 3:18 pm

Buy-to-let ‘remains a profitable investment’

Landlords should find it easy to secure a buy-to-let mortgage, as lenders see this type of investment as a profitable option.


This is according to director at Landlord Mortgages Lee Grandin, who explained how the rental sector is more favourable than the “highly competitive first-time buyer market”.


It was suggested that interest in purchasing buy-to-let property has risen as rental returns are “holding very well” due to a lack of housing supply.


Mr Grandin claimed…


“The drive in the market is partly as a result of both lenders and landlords making a profit from letting property to tenants.”


Buy-to-let rates are currently proving more competitive, which means a “slight improvement” can be seen in the mortgages offered by lenders, it was noted.


Mr Grandin’s comments follow a recent report from Paragon Mortgages that showed a third of intermediaries saw an influx in rental business in the final quarter of 2011.


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Categories: Buy to Let.

By admin
— 27/02/2012 at 3:14 pm