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London’s housing market has ‘suffered from the drop off in buy-to-let investors’

London house prices are continuing to fall, with the collapse in the buy-to-let sector increasing the number of homes on the market for sale, which is placing downward pressure on property prices.

The latest Land Registry UK House Price Index shows that London saw the lowest annual price increase in May, down by 0.4%, taking the average property value in the capital to £478,853.

Although the existing political climate and Brexit uncertainty continues to weigh heavily on London’s housing market, the fact that buy-to-let investors are shunning fresh property purchases is contributing to the sharp decline in agreed sales in the capital as demand from buyers falls.

New HM Land Registry sales figures available for London reveal that the number of completed house sales in March 2018 fell by 28.6% to 6,180 compared with 8,659 in March last year.

These figures reveal a property market that is “stuttering” at the moment, according to Sam Mitchell, CEO, online estate agents Housesimple.com.

Mitchell commented: “London's property price malaise continues, with annual growth in negative territory again.

“More than anywhere else, the capital has suffered from the drop off in buy-to-let investors deserting the market as a result of punitive tax changes.”

The number of homes available for sale has therefore increased, which has pushed down prices, presenting fresh opportunities for first-time buyers, but affordability constraints unsurprisingly remains an issue in London.

John Goodall, CEO and co-founder of buy-to-let specialist Landbay, said: “House prices succumbed to an early summer slowdown in May, helping to provide a slight respite for those hoping to get a foot on the property ladder. However, the overall cost of living and outstandingly high deposit costs continue to prevent many aspiring homeowners from entering the market.

“More and more of the so called ‘Generation Rent’ have surrendered to the fact they may never own a home in their lifetime. As a result, the private rental sector is increasingly becoming a crucial part of the housing mix and needs to be supported now more than ever.

“Recent government initiatives to professionalise the buy-to-let market and improve tenancy conditions are certainly a step in the right direction, but investment in building more properties specifically designed to rent will help to ensure the cost of renting doesn’t hit unsustainable levels.”


Article courtesy of Landlord Today | Sign up for Landlord Today newsletter | Get this news on YOUR site!


Cost of five year fixed rate buy-to-let mortgages fall

The cost of five-year fixed rate mortgages has continued to fall despite fears of an imminent interest rate rise, new figure show.

The Bank of England raised the chances of a rate rise next month after its chief economist recently joined two other members of its rate-setting monetary policy committee voting for an immediate hike in borrowing costs.

But new data from online mortgage broker, Property Master, shows that five-year fixed rate offers for 50%, 65% and 75% of the value of a property have continued to fall since the start of the year. 

Savings for each of these mortgages respectively were £11, £24 and £13 per month, according to the digital start up that uses algorithms to match the requirements of individual private landlords against the entire buy-to-let mortgage market.

Two-year fixed rates remained relatively stable although savings were available for landlords borrowing 65% of the value of a property.

Angus Stewart, Property Master’s chief executive, said: “Buy-to-let mortgage rates have remained competitive despite gathering fears of a rise in interest rates. 

“Any increases in cost that we have recorded in our research, mainly for two-year fixed rates, have been moderate whilst the cost of the increasingly popular five-year fixed rates has continued to fall. Much of this has been the result of increased competition in the marketplace, recent figures recorded a 13% increase in the number of buy-to-let mortgages on offer.

“Landlords are also benefiting from greater innovation as lenders respond to the changing complexity of regulation in this marketplace.”

Stewart continued: “Nevertheless, at some point the Bank of England will have to move rates.  There are only four more meetings this year of the Monetary Policy Committee at which a rate rise could be announced so landlords looking to refinance should not assume the deals they see currently on the market will continue to be available.”

Average rate and monthly cost for a loan amount of £150k.

 

Average rate

Monthly cost

Product

2 Year Fixed 50% BTL

2 Year Fixed 65% BTL

2 Year Fixed 75% BTL

5 Year Fixed 50% BTL

5 Year Fixed 65% BTL

5 Year Fixed 75% BTL

SVR 100% loan

2 Year Fixed 50% BTL

2 Year Fixed 65% BTL

2 Year Fixed 75% BTL

5 Year Fixed 50% BTL

5 Year Fixed 65% BTL

5 Year Fixed 75% BTL

SVR 100% loan

01/01/2018

1.62%

2.16%

2.65%

2.40%

2.86%

3.33%

4.82%

£272

£318

£370

£321

£375

£434

£602

01/02/2018

1.52%

2.15%

2.62%

2.28%

2.80%

3.26%

4.78%

£246

£314

£368

£305

£367

£424

£597

01/03/2018

1.99%

2.16%

2.65%

2.26%

2.81%

3.26%

4.78%

£270

£318

£376

£303

£369

£426

£597

01/04/2018

2.03%

2.13%

2.65%

2.32%

2.77%

3.27%

4.78%

£285

£312

£374

£310

£364

£426

£597

01/05/2018

2.05%

2.12%

2.64%

2.33%

2.78%

3.20%

4.78%

£287

£314

£373

£312

£365

£417

£597

01/06/2018

1.71%

2.14%

2.67%

2.33%

2.70%

3.20%

4.82%

£276

£311

£375

£311

£353

£418

£603

01/07/2018

1.71%

2.17%

2.74%

2.32%

2.68%

3.22%

4.82%

£277

£315

£387

£310

£351

£421

£603

 


Article courtesy of Landlord Today | Sign up for Landlord Today newsletter | Get this news on YOUR site!


Tipton & Coseley launches short-term let loans for landlords using AirBnB

The Tipton & Coseley Building Society will now accept mortgage applications for second homes and holiday lets where borrowers wish to use AirBnB, enabling BTL landlords to rent properties out on shorter and non-fixed-term agreements.

The building society has also introduced additional flexibility on overall income, by taking into consideration holiday let income where there’s a proven track record.

The product, which applicants borrowing up to 75% loan-to-value (LTV) can access, is available on purchase and remortgage. But holidays parks and properties with local ownership restrictions are excluded.

The property can be a second home, or a property let out for short periods. However, only a single second home/holiday let is allowed per applicant.

It must be a single dwelling so multiple occupancy is not accepted and there should be no assured tenancy agreements in place.

Cammy Amaira, director of sales & marketing at Tipton & Coseley Building Society, commented: “After listening to brokers and the marketplace, we can now accept applicants who wish to let their property over a short term, including AirBnB.

“The changing nature of people’s working circumstances for example, means that some tenants require shorter or more flexible rental periods. It therefore makes sense to accommodate landlords who wish to attract shorter term tenancies.”


Article courtesy of Landlord Today | Sign up for Landlord Today newsletter | Get this news on YOUR site!