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More landlords look to expand outside London and the South East

One in 10 landlords plan to purchase buy-to-let properties this year, up from 3% at the end last year, Source Business research shows.

The rise in landlord confidence and a change in tenant priorities following the lockdowns is leading investors to a move away from London and the South East, to less built-up areas.

Increasingly tenants want greater home working space and leisure time, resulting into a spike in demand for larger properties.

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Mish Liyanage, managing director of The Mistoria Group, said: “We are seeing a rise in professional landlords looking to acquire affordable terraced properties with gardens and apartments in the North West. Lower prices, high yields, expanding population and Northern Power house initiative/HS2 have contributed to this interest.

“A significant proportion of the professional landlords that we work with are located in the Midlands and the South, but want to invest in the North West, because of the attractive property prices, high yields and occupancy rates. Many investors are moving away from London and the South East and are searching for regions that give them exceptional returns.”

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At the end of 2019, 82% of landlords claimed that they had no plans to acquire another property in 2020, while just 3% were intending to add more than a single property to their portfolio.

Soon after the stamp duty holiday was implemented, 10% of landlords said they are now planning to purchase more properties and build on their portfolio, while just 5% said they had any intention to sell any existing properties.

BY RYAN BEMBRIDGE

Source: Property Wire

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A positive outlook for BTL: Seeking more than a room with a view

As the final quarter of 2020 begins – following an unprecedented six months – the buy-to-let (BTL) market is bouncing back strongly, in a way that few commentators predicted a few months ago, in my opinion.

The residential and buy-to-let markets both felt a significant impact during the initial stages of the pandemic. Public health measures made it difficult for surveyors to visit properties, contributing to nearly two months of disruption in the housing market. However, since property valuations became possible again, demand has returned, and the UK property market is demonstrating its resilience.

It has quickly become apparent to me that landlords and investors have not lost their appetite within the buy-to-let sector either. Demand for new tenancies has risen and historically such increases have often continued when supported by a growing market for property sales, as we are seeing now. The Chancellor’s stamp duty cut has further fuelled interest.

In fact, by July the number of new tenancies was nearly back to pre-pandemic levels, according to The Deposit Protection Service’s (DPS) quarterly Rent Index.

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Most of the growth in new tenancies has been at properties owned by professional landlords, and we expect to see this trend increasing. Professional landlords with reliable portfolios of good properties are often in a better position to absorb financial shocks.

According to the Savills Global Market Sentiment Survey, concerns over the pandemic are driving more UK residents to seek properties in rural locations.

The rise of home working means there are fewer benefits in living close to workplaces, particularly those in city centres. More people seem to be taking up the chance to find a property with a garden or a garage – or simply a bigger home, whether to accommodate greater home working or simply to enjoy more space. Such properties are more plentiful in the shires, meaning demand in urban areas may continue to fluctuate.

The Royal Institute of Charted Surveyors’ (RICS) August survey found that 83% of surveyors in the UK anticipate greater demand for homes with gardens or balconies in the next two years and that 68% expect the desirability of properties with a ‘more private’ outdoor space to grow. The increased demand for properties with specifically ‘roomier’ features has led to confidence in the housing market rising to a four-year high.

Overall, I believe this represents a relatively positive picture for brokers, professional landlords and buy-to-let investors. The fact that rates are low, loan-to-values (LTVs) are almost back to pre-pandemic levels can only go to support this positive picture.

Demand for rental properties is likely to increase in many areas, as renters seek tenancies with more than just ‘a room with a view’ to make staying and working at home more comfortable.

By Paul Fryers

Source: Mortgage Introducer

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Salford most profitable UK city for BTLs according to new study

A new study has revealed that Salford is the most profitable buy-to-let city for landlords, following the stamp duty holiday pushing UK house prices to an all-time high.

The research by CIA Landlord reveals that Salford, with an average house price of £173,311 and average rent prices of £1,052 per month, is the best city for landlords looking to buy a new property for buy-to-let purposes.

CIA Landlord calculated the best cities for buy-to-lets under the Government’s latest stamp duty holiday by analysing the average house price, rental price and stamp duty savings in every UK city for the cheapest home prices and highest rental yield in order to calculate profitability.

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Manchester follows closely behind Salford with house prices averaging at £193,681 and rental incomes at £1,141 per month. Leeds, Portsmouth and Belfast also feature in the top five buy-to-let hotspots.

High Wycombe in Buckinghamshire ranked as the worst city for landlords purchasing a buy-to-let property, with average house prices reaching £430,891 and rental prices averaging at £945 per month. Cambridge also saw low profitability margins, with average house prices at £448,432 and rental income averaging £1,080 per month. Reading, Worcester and Watford also feature on the bottom of the table in terms of profitability.

In the capital, Havering was the best borough for profitability according to the study, with house prices averaging £395,832 and monthly rental prices reaching £1,895. Alternatively, with average house prices reaching over £2m and average monthly rent coming to £4,003, properties in Kensington and Chelsea see the lowest profitability margins.

Source: Property Wire

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Paragon launches 70% LTV buy-to-let fixed rate deals

Paragon Bank has launched a range of 70% loan-to-value (LTV) two and 5-year fixed rate deals.

The specialist buy-to-let mortgage lender has launched new 70% LTV products for both portfolio and non-portfolio landlords across single self-contained (SSC) properties and Houses in Multiple Occupation (HMOs).

The 70% LTV range starts from 2.95% for a 2-year fixed rate for SSC properties, and all products are offered with no valuation fee.

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The products are available for purchase and remortgage and complement Paragon’s existing 75% LTV product offering.

Moray Hulme, Paragon director of mortgage sales, said: “These new products offer landlords more choice at a time when product availability more broadly has been constrained and will suit landlords with greater levels of equity to invest.

“Demand remains robust for both new purchase and remortgage activity, despite the current difficult conditions.”

Paragon has been adding to its product range over the past few weeks. At the beginning of May it launched a market-first Discounted SVR product to support landlords through a period of uncertainty.

By Ryan Fowler

Source: Mortgage Introducer

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85% of buy-to-let lenders still lending

Some 42 of the 49 buy-to-let lenders operating at the beginning of March are still lending despite the impact of coronavirus, analysis from Mortgages for Business shows.

Together Money and Vida Homeloans have both pulled out of the market, while HSBC is no longer accepting buy-to-let applications.

However Santander, Clydesdale, Precise Mortgages and Kent Reliance have now restarted lending, after initially taking a step back.

Shawbrook and Paragon meanwhile are using virtual valuations against standard properties up to 75% loan-to-value.

Steve Olejnik, managing director of Mortgages for Business said: “Lenders have cut down the sorts of landlords that they will lend to.

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“They’re pulling product ranges, tighten lending criteria, and increasing margins. But different lenders are derisking against different kinds of landlord borrowers. So, while some lenders are no longer lending to first time landlords, there are still lenders who are.

“My advice to landlords looking to remortgage is act sooner, rather than later. You may have to answer a few more questions when you’re applying for a remortgage that you would have had to last month – but a broker will still be able to find you a deal.”

Saffron Building Society withdrew from the market before the outbreak in March, though the lender has indicated that it will return to the market later in the year.

Lenders that have stopped lending to landlords since include: HSBC; Foundation Home Loans; Together Money; Vida Home Loans; Platform Home Loans; State Bank of India; and Furness Building Society.

BY RYAN BEMBRIDGE

Source: Property Wire

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Barclays issues payment holidays for BTL customers

Barclays will now allow buy-to-let mortgage customers to request a mortgage payment holiday.

BTL borrowers can now apply for a mortgage holiday through an online form on the lender’s website.

Furthermore, the bank said customers could access additional information on repayment holidays through its dedicated coronavirus hub.

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Last week, Barclays said it would not be offering BTL borrowers the option of a repayment holiday.

The mortgage holiday repayment initiative, which was first announced by Chancellor Rishi Sunak two weeks ago, has seen lenders across the country alter their policy criteria and implement three month repayment holidays for customers.

By Jake Carter

Source: Mortgage Introducer

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More UK women investing in buy-to-let properties

The number of women investing in buy-to-let properties in the UK has increased slightly to almost half the total, a new study has found.

Women now account for 47% of the 2.5 million buy-to-let investors in the UK up from 46% the year before, narrowing the gender gap in the investment class, according to the research by London estate agents Ludlowthompson.

The number of female residential property landlords rose by 5% to 1.2 million for the 2016/17 tax year, up from 1.1 million the previous year, according to the latest available HMRC data.

The narrowing of the gender gap in buy-to-let investment reflects how property has become an increasingly popular investment among women Ludlowthompson said.

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The company cited research from Kings College London that suggests that women are generally less likely to make high-risk investments. The relatively transparent business model, regular pay-outs, and low price volatility associated with buy-to-let property as opposed to shares has contributed to the rise in popularity of the asset class among women.

The narrowing of the gender gap among buy-to-let investors stands in contrast to the gender split across other asset classes such as cryptocurrency where women represent just 8.5% of investments, and stocks and shares ISAs where women account for only 43%, owning 957,000 shares ISAs compared with 1.2 million men.

Stephen Ludlow, chairman of Ludlowthompson, said: “The buy-to-let sector has a reputation of providing stable, long-term returns. Whilst some investors have become distracted by more speculative investments, buy-to-let continues to build increasing interest amongst investors who value income and long-term growth.

“It may not be long before we see a 50/50 gender split amongst buy-to-let investors, which is significant given the much wider gaps in other asset classes, such as equities.”

By Kalila Sangster

Source: Yahoo News UK