Tag Archives: Buy to Let

Evictions in England and Wales rise by 5%

The number of tenants evicted from rented homes in England and Wales in the first quarter of 2016 has risen by 5%, according to new figures. However, the Ministry of Justice (MoJ) says that repossession rates for those who own their homes has now fallen to a record low. The figures reveal that there were 10,732 repossessions granted to landlords of rented homes between January and March, compared to 10,253 repossessions in the final quarter of last year. The MoJ also reveals that record numbers of tenants are being forcibly evicted by bailiffs with 42,728 being removed from rental properties in 2015. The lack of affordable homes to rent   The reasons for the rise include the lack of affordable homes to rent and cuts in welfare payments with more than half of the evictions being brought by private landlords. PropertyLetByUs, an online letting agent, has also revealed in a survey that one in four landlords with buy to let property have had to serve an eviction notice in the last year a tenant. In addition, 5% of landlords had to pursue their eviction through the courts. The firm’s managing director, Jane Morris, said: “Landlords increasingly face rent arrears because […]

Top cause of stress for landlords revealed

One of the main causes of stress and worry for the UK’s landlords has been revealed as the controversial ‘Right to Rent scheme’, says a new study. In a report from letting agents PropertyLetByUs, they say that the legislation causes stress for one in three buy to let landlords and for those who have properties in areas with high numbers of immigrants, the situation is acute. Indeed, landlords in London, the West Midlands, the South East, the North West and in the East of England are said to be those suffering the most with the new law. The next stressful problem for landlords is dealing with tax issues with HM Revenue and Customs, then it is raising finance for their portfolio and then having to deal with tenant complaints and problems with void periods. The number one issue for causing stress and worry for landlords   However, according to the study, the number one issue for causing stress and worry for landlords is having to deal with rent arrears and arranging for property repairs. The research also reveals that landlords believe they are paying more than they should do for tenant reference checks which they are now required by law […]

Landlords face buy to let mortgage restrictions

Landlords are expected to face buy to let mortgage restrictions after one lender changed its criteria to demand that rental income was increased before a loan is agreed. The Mortgage Works said it is increasing the amount of rental cover required – which is how much a landlord needs to receive in rent in relation to their mortgage repayments – from 125% to 145%. In addition, the firm, which is the buy to let lending arm of Nationwide, will also not loan to landlords with less than 20% of a deposit and their minimum criteria is now 25%. The move is the Nationwide’s response to an announcement in March from the Bank of England insisting that buy to let mortgage lenders tighten their lending criteria when offering landlords buy to let mortgages. Industry experts are now forecasting that anyone wanting to invest in property will need a 40% deposit for any potential property investment. The managing director of Mortgages for Business, David Whittaker, said the Nationwide’s move did not come as a surprise and other lenders will follow suit. He explained: “The Mortgage Works is one of the biggest buy to let providers and they have taken the lead and […]

Pensioner buy to let landlords ponder selling-up

Despite offering a valuable retirement income, more than 40% of retiree landlords are considering off-loading their buy to let property, according to a survey. Responsible Equity Release also found that seven in 10 pensioner landlords said that without their rental income they would struggle to get by. More than 1,000 retired people who owned a rental property were surveyed and 92% of them said mortgage interest relief changes would have an impact on their profits. The situation is so worrying, says the firm, that pensioner landlords are now wondering whether it is worth hanging on to their buy to let property at all. Pensioners with a buy to let property   The firm’s managing director, Steve Wilkie, said: “For a lot of pensioners their buy to let property has helped because of low interest rates while savings have struggled and attract little interest, their property income is strong. “Many say they would really struggle to make ends meet without their buy to let income boost.” He said that it appeared the Chancellor George Osborne has forgotten that his new tax on buy to let properties will not affect wealthy landlords. Mr Wilkie added: “The changes will hit hard-working honest people […]

Buy to let mortgage approvals soar

The latest figures for buy to let mortgage approvals have revealed that numbers rocketed in January as buyers rushed to beat the upcoming stamp duty changes. In research from esurv, January saw 85,400 house purchase approvals – a rise of 20.6% on December’s figure. However, this is the highest number recorded since October 2007 when 87,594 approvals were registered. Over the past year, house purchase lending has risen in the UK by nearly 40%. Rush to obtain buy to let loans   A director of the chartered surveyors esurv, Richard Sexton, said: “Buy to let mortgage approvals have contributed to January’s home lending growth with a rush to obtain buy to let loans before duty changes begin in April. “Many predicted that the buy to let sector would narrow but we’ve seen lending appearing to do the opposite. “The rise in buy to let has not been at the expense of first-time buyers since the number of small deposit loans granted in January has risen and it’s a sign that lenders are giving first-timers a chance.” He added that the surge in buy to let buying has helped to conceal the strength of small deposit lending and the picture for […]

Landlords say buy to let sector will be damaged

Landlords around the UK say that the government’s continued assault on buy to let will end up causing serious damage to the market, according to one survey. Property management firm Orchard and Shipman says that 90% of the 500 landlords they questioned, said that the coming tax hikes will lead to higher rents for tenants. In addition, one in four landlords are planning to sell their buy to let properties because of the tax changes. Worryingly, one in five landlords also say they are planning to leave the buy to let sector altogether. Landlords are passionately committed   The firm’s chief executive, Shane Speirs, said: “Many property investors and landlords are passionately committed and will do what it takes to protect tenants but our research shows landlords are looking at ways of recovering a potential drop in revenue.” He added: “The buy to let market will, I believe, pull together to continue to provide accommodation for growing tenant demand.” The survey also reveals that 90% of landlords believe they should be able to deduct their legitimate expenses from tax bills. This is in response to the government’s plan to limit mortgage interest tax relief on a landlord’s income. Landlords are […]

BTL landlords ‘don’t assess true costs’

The boom in the buy to let sector is seeing growing numbers of landlords not assessing properly the true cost of their outgoings, says one BTL specialist firm. According to Platinum Property Partners, this means the landlords have no idea about whether a property investment will be profitable or not. In addition, around half of buy to let landlords fail to calculate the cost of any potential repairs to the property as well. From a study by the firm, they have calculated that the gross average cost for a buy to let property the UK is £8,359 every year. This figure is calculated by considering letting agent fees, property repairs as well as mortgage interest. Landlords may be overestimating their potential returns   Platinum is claiming that landlords may be overestimating their potential returns on a property investment by 50%. They say that the best way of gauging an investment’s performance is to use either a return on equity or a return on investment calculation. By doing so, a landlord will factor in the potential gross profit, the capital gains and all associated costs that come with maintaining a buy to let property. The study has also revealed that many […]

Landlords plan for buy to let portfolio investment

Nearly one in five buy to let landlords in the UK are looking to add to their portfolio which will help fuel a boom in the property market, according to the Nottingham Building Society. The building society has published a report which also says that 4% of homeowners are planning to invest in buy to let over the next 12 months for the first time. Around one in three of these new property investors will be aged over 55. Nottingham’s research also reveals that 70% of mortgage brokers believe that the government’s introduction of new pension freedom rules will help fuel the demand for buy to let mortgages. In addition, around a quarter of mortgage brokers said that demand for these mortgages will rocket over the coming year and 41% said there would be a slight increase in demand. Demand for buy to let mortgage products   From the research, just 2% of brokers believed that the demand for buy to let mortgage products will fall. The mortgage services manager for Nottingham Building Society, Ian Gibbons, said: “Our love affair for property is strong and is reflected with growing demand for buy to let property. “Our research would suggest that […]

BTL landlords could be forced out of business

Worries that the tax crackdown on landlords announced in the recent Budget have been proven with a new survey which reveals that one in five landlords believe they will be put out of business within the next two years. The findings come from specialist landlord law firm, Access Legal, who say that their research shows the loss of higher rate tax relief is a financial burden too far for many landlords. The move was announced by the Chancellor George Osborne which means that all landlords can only claim tax relief at the lower rate. The firm says that landlords in the UK lose nearly £10 billion in damage and rent arrears every year and the proposed cuts to tax breaks will put many out of business. Around a third of landlords believe the law is on the side of tenants with nearly half of those renting not able to pay rent arrears even after they have been taken to court to recover the loss. Landlords also complain about ‘extortionate’ up-keeping costs and 75% of those who have invested in buy to let do not believe they can save money with a letting agent. Half of BTL landlords have stopped using […]

Number of buy to let products rockets

The growing popularity of buy to let in the UK has been underlined with news that there are now more than 1,000 financial products available for landlords, according to Moneyfacts. The website says this is the first time that more than 1,000 buy to let mortgages have been available since April 2008. Moneyfacts says that landlords can choose from 1,011 buy to let mortgages which has rocketed from the 460 products that were available two years ago. Alongside the rapid growth in buy to let mortgage choice, there’s also extreme competition in interest rates from lenders. In 2008, the average buy to let variable mortgage rate was 6.84% – the same rate today is 3.6%. Rate for a buy to let fixed-rate mortgage   In addition, the rate for a buy to let fixed-rate mortgage today is now 3.8%, down from 7.34%. The organisation says that landlords wanting to fix a two-year deal can find a mortgage at just over 2%. Charlotte Nelson, from Moneyfacts, said: “With poor savings rates and higher rents it’s no wonder that buy to let is booming. “The number of finance deals have hit the 1,000 mark for the first time in more than seven […]