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Residential Landlords News: Innovation needed in the buy to let market, NLA claims

Fri, 18 May 2012 15:25:28 +0100

There is a need for greater innovation in the buy to let market, the National Landlords Association (NLA) has claimed.

A study by the body found that three-quarters of its members think that more innovation is needed while 89 per cent think that the market would benefit from more lenders and a greater level of competition.

It also revealed that many landlords want buy to let lenders to take into account their individual circumstances when applying for funds.

However, these concerns do not seem to be putting people off adding to their portfolios with one in ten landlords snapping up a property in the past three months.

NLA chairman David Salusbury commented: “Early signs of increasing property acquisition suggest that landlords are feeling more confident about future prospects of the buy-to-let market."

However, he went on to add: “The private-rented sector is playing an increasingly important role in the provision of housing. Buy-to-let products must be sustainable, with consideration for the longer term, if the private-rented sector is to rise to this challenge.”

Residential Landlords News

Landlord and Tenant News: Landlords advised to carry out pre-tenancy screening

Mon, 14 May 2012 16:55:32 +0100

Landlords with property to rent in London and elsewhere across the UK are being warned to make sure that they carry out thorough pre-tenancy screening.

While the majority of tenants are honest people, there are some who can cause issues when it comes to paying their way, paying only partial rent or making late payments, which can cause huge issues for landlords.

Pre-tenancy screening can help prevent such issues by assessing whether a possible tenant has a good credit rating.

"In my view, the most important aspect of renting out a property to tenants is doing pre-tenancy screening, which includes credit checks and referencing," Tom Entwistle, editor of Landlordzone.co.uk, said.

"Even then you can still have problems, so where landlords rely on the rental income to pay a mortgage they should consider rent guarantee and legal protection cover."

The expert added that not all landlords currently opt for pre-tenancy screening, however, it is becoming increasingly popular among more experienced property owners.

Landlord and Tenant News

Landlord and Tenant News: Research important in modern market

Wed, 25 Apr 2012 09:32:36 +0100

Would be landlords should do some research before looking for a buy-to-let mortgage and jumping into the property market.

This is according to Malcolm Harrison, spokesman for the Tenancy Deposit Scheme, who believes that the economic climate in recent years has changed the way the UK property market works and while one area may be buoyant, a neighbouring one may not be.

"You need to take the trouble to work out the location, the kind of people that want to live there and the kind of tenants that you are likely to get,” he advised.

"You need to look for all of the things that you have always looked for when investing in buy-to-let and that is a good mix of economic activity or for it to be on a commuter line or good transport links et cetera.”

He added that the most important thing is to be careful and ensure that you don’t buy a property which is either overvalued or in need of serious further investment.

Landlord and Tenant News

London Property Market News: Investors looking to add to portfolios in London

Thu, 19 Apr 2012 15:44:11 +0100

London landlords are currently enjoying the best yields from the private rental sector and are the most optimistic about adding to their stock in the next 12 months.

According to the latest Young Group property index, 46 per cent of investors are currently looking into buying more private rental assets this year, with homes in the capital the most desirable.

Somewhat unsurprisingly, respondents said the reason for this is because the capital offers much greater value growth and rental income yields than other areas of the UK.

Indeed, 41.2 per cent of landlord across the country are looking to add to their stock, but in London the figure is a mammoth 85.4 per cent.

Neil Young, CEO of Young Group and Young London said: “There is clearly a long term commitment to the private rental sector. Confidence in the asset class remains strong, particularly for property in the capital where investors see future tenant demand as virtually guaranteed.”

Landlord and Tenant News: Parents looking for better student accommodation

Wed, 18 Apr 2012 14:43:03 +0100

Parents who are packing their children off to university are increasingly looking for higher quality lets.

This is according to Marcus Roberts, director of student investment and development at Savills, who believes the days of grotty old student properties are over and demand for luxury is becoming prevalent.

He also feels that many parents are looking at better properties because it gives their loved one a nicer place to study and thus improves their grades.

"I think that parental expectations are changing in terms of the type and quality of accommodation that they are willing to pay for. First year [students] generally go into halls of residence and then second and third years typically go into terraced housing," he said.

"Parents are now thinking that actually they would rather pay a little bit more for their son or daughter to be in quality accommodation in an environment that will be more conducive to getting a 2:1 rather than a 2:2 in order for them to be able to compete with their peers."

Savills recently reported that despite concerns over the impact of higher tuition fees, demand for student properties is still high.

Landlord and Tenant News: Communication is key when tenants have financial problems

Mon, 16 Apr 2012 10:41:54 +0100

Owning and running a successful buy-to-let business is about taking the rough with the smooth, it has been claimed.

David Lawrenson, private rented sector expert at LettingFocus.com, says that things are good for the majority of landlords at present with record yields and a steady stream of people looking to rent properties out there to be had.

However, he points out that it isn't all plain sailing for people who have invested in the rental market and sometimes as a landlord you'll have to deal with issues which may make relations with your tenant tense.

One such situation is when the tenant has lost their job and is struggling to pay their rent as a result.

Mr Lawrenson believes that when this kind of issue comes up the most important thing is communication between the two parties.

"Most landlords ought to be supportive in trying to find a solution," he said. "The key thing is to make them aware of the issue and to try to find the solution, which might be perhaps paying less rent.

"It might be the landlord just being aware of it and just agreeing that they will make [up the shortfall in rent] when they find a job, or it might be them leaving and the landlord allowing them to leave early without making them pay to the end of the contract. It is about finding solutions like that with a flexible landlord."

He added that, faced with unemployment, tenants should make sure that they find out all the facts regarding what level of support they could be entitled to through the Department for Work and Pensions as they could potentially be eligible for things such as housing allowance.

While this probably will not rectify the issue entirely, the support potentially available will go someway to covering the cost of rent.

London Property Development News: Sardine apartments popping up all over London

Thu, 05 Apr 2012 13:15:31 +0100

The strength of the London rental market has brought about a rise in so-called sardine apartments.

This is where landlords have applied for change of use planning permission to convert areas such as roof space or storage rooms in buildings into flats to rent out.

However, this is often to the annoyance of existing residents but there is little they can do about it.

Paul Williams, a director of Savills, said that while longstanding tenants may feel that a new apartment being added to their building will cause disruption and in some cases spoil the property's character, it is easy to see way a landlord would consider it as an option.

“Because the freeholder owns the land already it is going to be a very profitable business, which is why they are keen to do it,” he told the London Evening Standard's Homes and Property website.

According to Lloyds TSB, the average rental property in London provides a landlord with an average yield of 4.8 per cent

Landlord and Tenant News: Scrimping on home maintenance could cost more in the long run

Wed, 22 Feb 2012 11:41:15 +0000

A large number of people are putting their property's value at risk by not keeping on top of routine maintenance jobs.

Research from the AA found that 39 per cent of Brits are letting their homes fall into disrepair through either forgetfulness or as a way of saving money.

For landlords the problem could be even worse as it may lead to them to having to cover a hefty bill in the future.

Tom Stringer, head of AA Home Emergency Response, said: "Many homeowners seem to be mirroring the government's drive for austerity but this can be a false economy as problems tend to get worse in the home if you leave them unresolved."

The Landlord Syndicate recently advised property investors to do all they can to ensure that their properties are in tip top condition through these colder months.

It said that landlords should arrange a suitable time to visit tenants and make checks both to the inside and outside of the property as leaving things to chance could have dire consequences.

Landlord and Tenant News: Insurance firm issues warning to would-be Olympic landlords

Mon, 20 Feb 2012 14:45:00 +0000

Landlords hoping to make a quick buck during this summer's Olympic Games could come in for a nasty surprise if anything happens to the property or its contents.

Insurance firm Paymentshield has warned people looking to rent out their homes to visitors during the sporting extravaganza that they could if they don't ensure that they have the relevant cover in place.

One in three homeowners are said to interested in either letting their home to a visitor or taking in a lodger during the games, but many do not realise that this could invalidate their existing insurance policy.

Antony Osborne, head of product at Paymentshield, told MyIntroducer.com: “Many people don’t realise that their policies could be void if they don’t notify their insurance providers ahead of any changes.

"The worry is that people will only realise this at the point of making a claim, which could mean they end up covering the cost of any damage or losses.”

He advises that people should ensure that they check their policy and inform the provider if cover is not current adequate. They should also put a tenancy agreement in place and seek advice from a professional lettings agent to ensure peace of mind.

London Property Market News: Investors are increasingly turning to large luxury flats

Thu, 16 Feb 2012 15:38:26 +0000

Property investors in London are switching their attention from traditional townhouses to luxury super-sized apartments, it has been claimed.

According to Stephen Dyer, managing director of Ideal Property, cash rich buyers from overseas are shying away from the giant houses of Chelsea and Kensington are instead looking to move into spacious new developments.

And as a result of this, professional investors are following the trend and restructuring the types of properties in their portfolios.

"If the only market appears to be from these super-rich people from abroad then that's who you're going to develop for, so I guess you would have to find buildings that exist in London that you can develop in that way," Mr Dyer said.

He added that a number of new developments are already under construction and the market is set to grow considerably this year.

A recent study from Hampton International’s found that biggest number of overseas buyers last year came from Russia.

Landlord and Tenant News: Tenants are staying put for longer

Wed, 08 Feb 2012 13:11:34 +0000

Tenants are staying in homes for longer on average than ever before.

According to Malcom Harrison of the Tenancy Deposit Scheme, a combination of economic uncertainty and the rising quality rental properties is meant that people these days stay put for longer.

This is great news for landlords, who at present are also enjoying unprecedented returns on their investments.

"If you go back five years then all of the surveys used to show that the average length of tenancy was around about 14 or 15 months," Mr Harrison said.

"Fairly quickly after that they were increasing up to two years and I would not be at all surprised if they have increased quite a lot since then.

"I haven't got any figures to substantiate that the initial tenancies are longer, but the probability is that people are looking to move and stay for longer than they would have done before."

And further good news for landlords is that rental values are likely to increase this year

A recent study by the Halifax found that 61 per cent of Brits feel a rise in rental prices is likely compared to just four per cent who feel prices will come down.

Landlord and Tenant News: This is the year of investment for landlords

Tue, 07 Feb 2012 13:46:03 +0000

High rental returns will mean that people rush out to find a good investment this year, it has been claimed.

According to property builder Miller Homes this will be the 'year of the investor'.

Steve McElroy, sales director for Miller Homes North East, said that because rental values are at all-time highs across the country, there will be fierce competition between landlords to purchase new properties and between tenants to get in them.

"We have begun to see a marked increase in the number of landlords who are looking to capitalise on the current situation, and we expect this upward trend to continue throughout 2012," he said.

“Recent research from specialist buy-to-let lender, Paragon Mortgages, backs this up. Its findings suggest more than 22 per cent of landlords expect to buy additional properties in the New Year, while just eight per cent are considering reducing their stock.”

Indeed, Paragon's findings also suggest that the majority of landlords feel a rise in people looking to rent property from this year is just around the proverbial corner.

Landlord and Tenant News: Aussies say g'day to a sound investment

Fri, 03 Feb 2012 16:01:43 +0000

The high rental returns available in London at present are convincing people that it is worth travelling from the other side of the planet to make a sound investment.

Indeed, it isn’t just the likes of Kylie Minogue who have come from down under to the UK’s capital and put some money in bricks and mortar.

According to Sourcing Property, the strong Australian dollar and the high yields available has attracted a large number of Aussies to invest their cash in buy-to-let properties in London.

"They view central London property as a relatively safe investment, and they're getting a saving on it due to the favourable exchange rate," said Sourcing Property’s company director Jo Eccles.

Typically, Aussies are investing in properties in the region of £400,000 to £800,000.

And it’s easy to see why overseas buyers see London as such a great place to invest in. A recent study conducted by HomeLet found that the typical rental yield in the capital is 80 per cent greater than in other parts of the UK.

Landlord and Tenant News: Landlord Syndicate offers winter tips

Wed, 01 Feb 2012 17:35:34 +0000

After a period of mild temperatures the cold snap is finally upon us and the Landlord Syndicate is urging landlords to do all they can to prepare the properties for the freezing conditions.

The independent network for property investors says that landlords should arrange a suitable time to visit tenants and make checks both to both the inside and outside of the property.

This includes inspecting all pipes, ensuring that water tanks are adequately insulated and overflow pipes are not blocked.

On the outside, all gutters and downpipes should be clean and free from cracks, while gratings should be cleared of leaves or any other debris which may have built up over time.

Eddie Hooker, CEO of Total Landlord Insurance, which is aiding the Landlord Syndicate with its advice, added: "Most importantly, we advise landlords to ensure tenants know where the stopcock or isolation valves are located in case they have to turn off the water to any part of the property.”

Similarly the Association of Residential Letting Agents (ARLA) said last month that landlords need to make managing their properties a key health and safety priority over the coming months.

Mortgage and Home Loan News: Number of buy-to-let mortgages available rises significantly

Wed, 01 Feb 2012 17:32:14 +0000

Moneyfacts has conducted research which shows that the mortgage market is getting much easier to navigate for landlords or potential landlords.

According to the financial website, the availability of buy-to-let mortgage products has risen in recent months and the rates on offer have become more competitive.

Indeed, in February last year there was a total of 386 buy-to-let mortgages on the market, but today that figure is almost 26 per higher at 486.

In February 2010, there were just 243 buy-to-let products on the market.

In terms of rates, the average buy-to-let mortgage stood at 5.31 per cent in 2010, it was 5 per cent last year and stands at 4.79 per cent today.

Louise Holmes, spokesperson for Moneyfacts.co.uk, said: “These latest figures, particularly a reduction in the average rate, should make pleasing and encouraging reading for landlords and property investors.”

The findings follow on from Mortgages for Business’ research which found that buy-to-let mortgages available up to 80 per cent LTV (loan to value) are on the increase.

Landlord and Tenant News: Landlords can still find value in 2012

Tue, 31 Jan 2012 14:01:00 +0000

Potential landlords will still able to find excellent investments this year, claims the Association of Residential Letting Agents (ARLA).

According to figures released by the body this week, the number of property transactions conducted by landlords rose steadily in 2011 and although the same numbers may not be hit this year, there will still be enough activity to keep the market buoyant.

During the final three months of 2011, 25 per cent of landlords questioned said that they had purchased new properties for their portfolios, and increase of two per cent on the previous quarter.

While at that the same time, the number of landlords which sold a property rose from six per cent to eight per cent.

Looking into this year, 25 per cent of respondents stated that they intend to add buy new properties. And while that is down by two per cent on last year, it is still a significant number.

Tim Hyatt, president of ARLA, said landlords can still expect to growth from the private rental sector (PRS) in 2012, although it will be at a more cautious rate than seen in 2011.

"PRS forecasts have stated that the rental sector will still offer growth in the coming year," he said. "Rental growth will remain robust across all sectors, albeit at a more sustainable level of around four per cent to five per cent for this year.

"This will come about in part because of the continued inactivity in the sales market but nothing like the growth we have seen for the past two years.

“But the PRS still represents substantial value for investors looking to enter the market or increase their participation."

The findings made by ARLA back up those which were released as part of the Young Index report last week, which showed that one in five landlords added new properties to their books last year.

Landlord and Tenant News: One in five landlords extended their portfolio last year

Thu, 26 Jan 2012 14:34:06 +0000

Almost one in five landlords added to their property portfolios during 2011.

The latest Young Index report of Private Rented Sector sentiment shows that 19.1 per cent of property investors added new assets to their books because of the high capital growth and rental yields currently available.

As usual, property in London leads the way with rental returns expected to continue to grow this for 85.1 per cent of respondents, while 100 per cent said that feel property values will either be at the same level of higher at the end of the year than they are today.

Neil Young, CEO of the Young Group, said: "Without a doubt, the appetite from private investors in the private rental sector for additional investments is extremely strong.

"The London rental market is particularly strong and demand from tenants seeking quality Private rental sector accommodation shows no sign of abating, buoyed by a population that is spending longer than ever living in rented homes and increasingly living in solo households."

Knight Frank’s Student Property Report recently revealed that rental returns in the student letting sector had doubled to 15.1 per cent in September.

Landlord and Tenant News: Landlords need support with first let

Wed, 25 Jan 2012 10:08:58 +0000

Getting over the hurdle of your first letting is a very rewarding thing for new landlords, but that's not to say that it should be done without support.

Tom Entwistle, editor and founder of online property portal LandlordZONE.co.uk, believes that ensuring you have the correct level of backing and support should be the first thing you do when considering a move into the lucrative world of a professional property investor.

"Letting is a growing market and new landlords are entering the field all the time, so they need all the help they can get - letting out a property yourself is a huge learning curve," he said.

"There is the opportunity at the moment for good income returns for those able to buy the right properties in the right locations for the right prices, providing they know how to manage them well."

Mark Durban, senior lettings negotiator for Paramount added: “In the rapidly evolving Private rented Sector, and with more and more regulatory legislation brought in to protect landlords and Tenants alike, (EPCs and the Tenancy Deposit Scheme for example) Landlords have required more assistance than ever before from their Lettings Agent.

"Paramount, given our ARLA status, are perfectly placed to offer valuable advice to Landlords who are getting on the BTL ladder for the first time.”

The Tenancy Deposit scheme recently advised landlords to look carefully at local factors when considering their next purchase rather than reading too much into national statistics.

London Property Market News: Overseas investors continue to drive central London housing market

Thu, 19 Jan 2012 13:52:52 +0000

Investment from overseas is continuing to drive the housing market in the heart of London.

This is according to Naomi Heaton, chief executive of London Central Portfolio, who believes that the financial security of homes in the capital appeals to cash-rich foreign investors more than in other European cities.

"Inevitably, foreign buyers will dominate by virtue of the fact that there are far more wealthy people globally, than there are located in the UK," she said.

"London Central is increasingly seen as a safe haven market which offers capital preservation with long-term upside potential."

And it seems the figures back up her claims.

Recent statistics released by the Royal Institution of Chartered Surveyors (RICS) show that nationally property values have seen a slight decrease. But London has continued to buck the trend.

There's also good news for landlords in London as HomeLet's Rental Index for November showed that in some parts of the capital, rental values are 80 per cent greater than the national average.

Landlord and Tenant News: Student rental market to continue growth

Tue, 17 Jan 2012 12:55:14 +0000

The student rental market is set to grow further in 2012 despite concerns over falling enrolment numbers due to hikes in tuition fees.

New research from CBRE shows that some £840 million was invested into developing properties for students in 2011, while figures published in Knight Frank’s Student Property Report says that rental returns in doubled to 15.1 per cent in September.

The report also suggested that properties close to the most prestigious universities will be the most profitable when the new tuition fee structure comes into force.

According to CBRE, recent student rents have grown by four per cent nationally in the past year except in London where the ratio is slightly better at five per cent.

Occupancy rates are also striking in comparison to the private rental sector with some 99 per cent of student homes let out on average.

Concerns over fee hikes leading to a drop in the student rental market are unfounded, claim CBRE. Rather than a decline the commercial property firm anticipates that a shift in the type of student will take place rather than a drop in numbers.

Overseas students will play a major part in this as numbers are expected to increase from an average of three per cent to six per cent.

“Any uncertainty in the wider Higher Education market is not reflected in the accommodation sector and we expect the strong rental growth to continue,” said Jennet Siebrits, head of research for CBRE.

He added: “The private rented sector still houses the highest proportion of students at 27 per cent followed by institutional halls and students' families both of which house 19 per cent of the population.”

Research conducted by specialist mortgage provider Paragon in October found properties let to students provide a landlord the highest possible yield, with an average of 7.62 per cent.