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Landlord and Tenant News: Landlords positive about buy to let outlook

Tue, 15 May 2012 16:48:37 +0100

Landlords offering property to rent in London and elsewhere in the UK are positive about the buy to let market's outlook, according to a recent survey.

Lender CHL Mortgages' Landlord Survey shows that 71 per cent of landlords questioned are positive about the market's prospects with just five per cent feeling negative.

In terms of their portfolios, the majority were happy with its current size with 17 per cent making a purchase in the last 12 months and just five per cent selling.

Almost a third (31 per cent) said they intend to acquire more properties in the coming year.

"This latest [survey] shows the vast majority of landlords remaining optimistic about the buy to let market's prospects for the second half of 2012 and beyond, and still regarding the private rental sector as a safe place for their investment," said Bob Young, managing director at CHL Mortgages.

He added that the number of landlords boosting their portfolio is likely to be supplemented by accidental landlords and those making their first steps on the buy to let ladder.

Recent data from the Council of Mortgage lenders highlighted that buy to let lending rose by 32 per cent year-on-year in the first quarter of the year.

Residential Landlords News

Residential Landlords News: Landlords advised to consider contents insurance

Fri, 11 May 2012 16:05:49 +0100

Taking out contents insurance is something that landlords are advised to think about if they have any furnishings in their properties.

According to David Lawrenson, private rented sector expert at LettingFocus.com, most landlords have minimal furnishings which means it may not be worth them paying for extra insurance on top of their buildings premium. However, for others who provide more items of furniture it may be a sound investment.

"A lot of landlords do have a very small level of furnishings in their property so that they can get their ten per cent wear and tear allowance," he added.

Mr Lawrenson continued to say that it is also worth checking if contents insurance is covered within building insurance cover as some insurers offer a small element as standard.

The expert recently spoke about the importance of having the proper landlord insurance in place, saying that too many people who have started letting their property out think that standard insurance is sufficient.

Residential Landlords News

Landlord and Tenant News: Weak economy is a good thing for rental market

Fri, 13 Apr 2012 14:49:18 +0100

A weak economy can be a good thing for landlords or people looking to take out a buy to let mortgage, it has been claimed.

Michael Banks, commercial director for Upad, believes that despite the economic climate being gloomy at present, it is boom time if you have a property to let out.

"There is still confidence going forward. The whole idea of the extended double dip recession has rescinded, so people aren't as afraid anymore,” he said.

"The lack of job prospects should increase rental buoyancy because people are less willing to buy when there are question marks [about jobs]. The rental market runs contrary to the economy generally; the more uncertain the economy, the more buoyant the rental market."

His comments echo those made recently by Stuart Law, chief executive of property firm Assetz.

Mr Law said that despite the state of the economy, the private rental market will “continue to grow”.

Landlord and Tenant News: High demand keeps student market flourishing

Tue, 27 Mar 2012 17:13:40 +0100

The student rental market is growing at a rate of knots, but there simply is not enough housing stock to service the demand, it has been claimed.

Marcus Roberts, director of student investment and development at Savills, believes that despite student numbers falling this year, the sheer lack of suitable properties coupled with the fact that many universities are scaling back or even closing their own halls means that demand still way outstrips supply.

"Rental growth is still very much there – probably between three and five per cent on average across the UK,” he stated.

“As an investor you are looking at the fundamentals [of] the supply-demand imbalance and the rental growth as being key to the success of the sector over the last ten years.”

People looking to invest in student accommodation in London were recently advised to consider doing so in new or recently constructed buildings by IPINGlobal.com as they are generally easier to manage and often avoid some of the regulation attached to older properties.

Landlord and Tenant News: Rental yields continue to grow

Mon, 26 Mar 2012 17:07:36 +0100

Landlords are continuing to see significant rises in the amount of return they can get from their buy-to-let portfolio, new figures from BM Solutions shows.

According to the mortgage lender, which is part of the Lloyds Banking Group, average monthly rents rose from £682 to £716 last year.

But in London the numbers are significantly greater with the average rental property now costing a monthly average of £1212 (up by 5.6 per cent from £1149 in 2010).

Phil Rickards of BM Solutions said: "There is a very healthy demand for rental properties across the UK right now, which in part may be driven by the costs associated with buying a home: costs which, for some, will only increase as the stamp duty holiday comes to an end.

“Average gross yields on a buy to let property have been just over six per cent for the past two years, driven by growth in rental values.”

The average rental property in London provides a landlord with an average yield of 4.8 per cent.

Landlord and Tenant News: Demand for rental property on the up and up

Tue, 20 Mar 2012 13:54:43 +0000

Demand for property from potential tenants is continuing to grow, a new survey suggests.

The Private Rental Sector Trends study from Paragon shows that 44 per cent of landlords had seen an increase in interest from people looking to rent a property during the first quarter of this year.

In contrast, just seven per cent said that they have seen a decline in the number of people approaching them, while the remaining 46 per cent said that levels had remained stable.

Looking forwards, 56 per cent of landlords said that they believe demand will continue to grow throughout the year, while 36 per cent felt that things would stablise.

Nigel Terrington, chief executive of Paragon Group, said: “Levels of tenant demand have for the most part remained steady throughout the first quarter of the year. This shows the continuing importance of the private rented sector as the tenure of choice for many people.”

London Letting Agents News: People who let to let should use a professional agent

Thu, 08 Mar 2012 13:28:45 +0000

A growing number of people across the country are choosing to rent out the home they own and then move into a separate rented property themselves, it has been claimed.

We've all heard of 'let to buy' (or accidental landlords as some have dubbed them) but this way is effectively 'let to let' and creates a situation where someone becomes both a landlord and a tenant at the same time.

According to research conducted by Townends, the phenomenon has become particularly common in some parts of the south east.

Malcolm Harrison, spokesman for the Tenancy Deposit Scheme, said that while he hasn't come across it too often, people who find themselves in this kind of situation should ensure that they are working closely with a professional letting agency.

"I would give the same advice to anybody renting in any way, they should use a regulated letting agent. They have to register their deposit with an authorised scheme," he said.

"They should do everything that they can to ensure that the tenancy is properly arranged because a well organised tenancy is probably going to be a happier tenancy and a happier tenancy means less problems."

Landlord and Tenant News: New landlords should follow some golden rules

Wed, 07 Mar 2012 13:43:46 +0000

People who are new to the property letting game could find themselves soon encountering problems if they do not follow a few simple rules, according to LettingFocus.com

Research conducted recently by specialist mortgage provider Platform shows that 20 per cent of all buy to let transactions it carried out in December and January were for accidental landlords, who are looking to recent out their own home while they search for a new one.

David Lawrenson, private lettings sector expert at LettingFocus.com, said that these people, due to their lack of experience, could come across issues if they failed to do the basics such as choosing tenants carefully and ensuring proper reference checks are carried out.

He also stated that any first-time landlord should also take time to ensure that they have a property in the best possible location if they are to attain the maximum yields possible.

"The key thing is choosing an area and choosing a type of property – particularly look out for any areas of oversupply," he said.

"They have got to pick an area which has got a strong economy behind it and where there is strong demand from tenants."

Landlord and Tenant News: Student property investors should focus on modern buildings

Thu, 23 Feb 2012 11:35:38 +0000

Property professionals looking to move into the lucrative student lets market should focus on modern or newly constructed properties rather than older traditional ones, it has been claimed.

Peter Mindenhall, researcher at IPINGlobal.com, believes that certain types of traditional student properties are finding themselves subject to increased regulations and requirements, while many older forms of university accommodation are also suffering from being outdated.

"New-build developments with planning approval and support from the university and local council are the primary things to consider,” he said.

“Some developers will also include management services or companies which will appeal to more active investors."

Mr Mindenhall’s comments come following research from Knight Knox International which found that contrary to popular belief many universities and colleges are experiencing record levels of applications.

It was felt that an increase in the cost of tuition would led to thousands of young people choosing not to go into higher education but numbers are rising in many parts of the country, increasing the need for quality accommodation.

Landlord and Tenant News: Rental market boomed last month

Fri, 17 Feb 2012 13:25:05 +0000

Residential rental returns continued to grow last month according to the latest buy to let index from LSL Property Services Ltd.

The average rent in England and Wales rose by 0.1 per cent to an average of £712 per month, taking the total annual rent inflation from 4 per cent in December to 4.3 per cent.

Putting that into simpler terms, it means that on average a rental property is providing its landlord with around £30 per month more than it was a year ago.

The largest annual increases have unsurprisingly come in London. Buy to let properties in the nation’s capital city now yield a 6.3 per cent better yield than they did at the beginning of 2011.
David Brown, commercial director of LSL Property Services, said: “The rental market burst back into life unseasonably early in January, with tenants on the move trying to take advantage of what is usually a quieter period for the rental market.”

And the supplier of rental stock is set to increase this year as recent indications suggest that a large number of landlords are currently looking at expanding their portfolios.

Landlord and Tenant News: Era of the silver landlord

Fri, 10 Feb 2012 14:36:42 +0000

Becoming a landlord is not just a young man's game anymore.

According to mortgage broker John Charcol, many older people who have built up significant equity in their properties are choosing to rent them out rather than sell up.

Simon Collins, an advisor at John Charcol, believes this is because of two reasons.

Firstly, they do not wish to take a lower asking price than was achievable a few years ago. And secondly, the yields available at present can make a nice nest egg for retirement.

"The dramatic rise in house prices over the last 15 years have made people see their home as an asset rather than a home," he told the Daily Mail.

"As a result many of those who have paid a large chunk of their mortgage are instead looking to rent out their home rather than selling it."

And this year looks likely to be boon for landlords as a further rise in interest from potential tenants is predicted as well as an increase in the returns attainable.

Mortgage and Home Loan News: 2012 set to be solid year for landlords

Mon, 06 Feb 2012 11:03:28 +0000

2011 was a solid year for landlords but this year things will get even better, according to the Hinckley & Rugby Building Society.

Speaking at the launch of its new 60 per cent LTV buy-to-let mortgage range, Gill Vernau, intermediary development manager for the society, said that this year will bring a marked improvement on what has already been an exceptional past 12 months.

Hinckley & Rugby has teamed up with specialist commercial and buy-to-let intermediary TBMC to launch products which start as low as 3.25 per cent and feel this will help it play a significant part in moving the market forwards this year.

"We are expecting 2012 to offer further opportunities and have been working with TBMC to develop our buy-to-let mortgage proposition," Ms Vernau said.

"Hinckley & Rugby is currently looking to increase business for loans up to 60 per cent LTV and this product has been specifically designed to meet the needs of landlords with higher deposits. We anticipate this being a popular product that will drive good levels of new applications.”

Recent research by Mortgages for Business found that are also a wealth of buy to let products up to 80 per cent LTV now available on the market.

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: 2012 will be boom time for landlords

Thu, 02 Feb 2012 10:47:49 +0000

This year will be boom time for landlords, according to specialist buy-to-let lender Paragon.

A new survey conducted by the firm found that demand for properties is flourishing, with 56 per cent of landlords saying they are expecting a rise in interest from potential tenants.

Just six per cent said they could see a decline in demand.

Nigel Terrington, chief executive of Paragon Group, said that the numbers were far from surprising considering the way in which demand shot up last year.

But demand is not the only reason he says landlords should feel confident about the market. A rise in available mortgages allowed more landlords to invest in their portfolios.

“I believe that the foundations that we laid as a sector in 2011 will allow lenders and landlords to continue to do business, in particular if we see a greater level of product innovation,” he said.

“We should look to 2012 with optimism as it is sure to bring further opportunities."

And it isn’t just landlords that have reason to feel optimistic, Building Societies Association (BSA) said recently that consumers should see more reasons to be confident about purchasing a home in 2012.

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: Lack of stock keeping rental values high

Thu, 26 Jan 2012 14:32:29 +0000

A lack of property stock is keeping rental values high, it has been claimed.

Peter Bolton King, chief executive at the National Federation of Property Professionals (NFOPP), believes that in many parts of the country the need for rental properties is soaring but there simply aren't enough landlords out there to satisfy the demand

"The demand is there and the supply is a problem, therefore in many areas I think that rents will keep going up," he said.

"All of the research that has been done shows that over the next ten-plus years the growth in the private rented sector is going to continue. It has to because we have got an increasing number of households for various reasons and that is not projected to be met by the owner-occupier sector."

And it's just the cost of rental properties which is being kept up by a lack of stock. A recent report from the National Housing Building Council (NHBC) said that house sale values are being maintained at a healthy level due to a lack of new properties being built.

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.

Landlord and Tenant News: Landlords need to look at areas rather than national statistics

Mon, 23 Jan 2012 13:49:08 +0000

Potential landlords should spend time research individual districts rather than looking at national statistics when they are planning their next property purchase.

This is according to Malcolm Harrison of the Tenancy Deposit Scheme.

He believes that while the national figures make good reading, they hid some of the regions where yields are not as high and the rental market is stagnating.

“I think the days of taking a national average are gone; everything is becoming much more regional and it is area by area,” Mr Harrison said.

“There will be some areas which are doing very well and everybody is getting what they want, and then there are other areas which, for one reason or another, are seeing a downturn.”

Currently the region which is far outperforming any other in terms of rental income is London.

Indeed, HomeLet’s Rental Index for November found that the average rental amount in the capital is 80 per cent greater than the national average.

Landlord and Tenant News: Lenders preventing longer-term tenancies

Tue, 17 Jan 2012 12:56:29 +0000

Mortgage lenders are preventing landlords from signing tenants up to longer agreements, claims one industry expert.

David Lawrenson, founder of LettingFocus.com, believes that longer tenancy agreements would benefit both tenants and landlords as it would mean longer security and a protection against cost rises.

However, he feels that banks and building societies are preventing this by insisting that all their buy-to-let customers adhere to the industry standard six month agreement, but feels a change could be near.

"Despite popular perceptions, our findings are that the majority of landlords actually want to hold on to good tenants for a long time - even if it means they have to accept less than market rent,” Mr Lawrenson said in a blog for the Guardian.

“Our work with lenders has challenged the logic of this and I'm sure we will see longer-term assured shorthold tenancies become the norm in the future.”

The Tenancy Deposit scheme also recently advised landlords that the best way to ensure a harmonious relationship with tenants is by using the services of a professional lettings agent in the first instance.

Landlord and Tenant News: Tenants should feel confident about using a lettings agent

Thu, 12 Jan 2012 12:36:53 +0000

Tenants should feel safe in the knowledge that their deposits are safeguarded and that the number of bad letting agents are small in UK.

This is according to Malcolm Harrison, spokesman for the Tenancy Deposit Scheme, who stated that while many people do still worry about what happens to their deposit money when it is handed over to an agent, the law dictates that it must be placed into one of three protection schemes.

"All of the schemes have done a pretty good job in educating the public, but a lot of people still don't understand that.

“All letting agents have a responsibility having taken the deposit, to register that deposit with one of the three schemes. It is a legal requirement. Landlords can get muddled, don't know what to do or forget to do it.”

He added that it is important not to tar all letting agents with the same brush as the number of bad ones is miniscule compared to the size of the market.

The Tenancy Deposit Scheme recently stated that since 2007, changes to laws on deposits have made relationships between tenants and landlords far more harmonious – especially if the agreement is looked after by a registered agency.