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Majority of landlords waiting for lockdown measures to ease before investing

Over half (59.8%) of BTL landlords are waiting for lockdown measures to ease before investing in properties, according to the National Landlord Index by Accommodation.co.uk.

The research highlights that UK landlords still see the rental market as a safe place to invest especially as the stock market has been so volatile during the pandemic.

This desire from landlords to expand their property portfolios in 2021 is reflected in the demand for buy-to-let mortgages with the index revealing that nearly two-fifths (37.8%) of landlords are planning to apply for one this year.

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As the UK starts to see the benefits the vaccination has on the economy, Accommodation.co.uk says it is “clear” that landlords are optimistic that this recovery will be reflected in house prices long-term.

Aaron Short, founder and chief executive at Accommodation.co.uk, said: “We are always listening to our landlords and tenants to understand the needs of the market and this is why the National Landlord Index remains so important.

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“Understanding how BTL landlords are being impacted by lockdown measures and what their plans are post-pandemic help us to understand the future lettings market. It is great to see landlords looking to expand portfolios and generally positive about the future and this certainly mirrors the growth we have seen at Accommodation.co.uk.

“We have been at the forefront of updating this archaic industry and we believe our award-winning model offers tenants and landlords the best solution in the current market.”

Source: Property Wire

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Value of BTL portfolio rises despite drop in landlord numbers

The latest figures by estate agent Barrow and Forrester show that despite the number of landlords operating in the buy-to-let sector dropping by 8% in two years, the value of the average BTL portfolio has risen by almost £40,000 in the past 12 months.

Across Britain, the average landlord’s buy-to-let portfolio consists of 1.9 properties and with the current average house price sitting at £254,525, it equates to an estimated value of £491,234.

This is an increase of £38,820 in the value of their buy-to-let portfolio in one year.

The South West has seen the most considerable uplift in portfolio value with an increase of £49,000 in the past year.

The East Midlands has also seen a notable jump of £41,000 in value, with the East (+£38,000) South East (+£37,000) and West Midlands (+£36,000) also climbing considerably.

London still leads in terms of the most valuable landlord portfolios.

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With the average landlord owning two properties in the capital, the total value of their property investment is almost £1m having climbed by £34,000 in the last year.

The South East has not only seen one of the largest annual increases in portfolio value, but at £641,093, landlords in the region are also seeing the second-highest total sum.

The East (£575,187), South West (£530,890) and East Midlands (£427,942) are also home to some of the highest buy-to-let portfolios per landlord.

James Forrester, managing director of Barrows and Forrester, said: “A sharp increase in property values brought on due to the current stamp duty holiday has caused a considerable jump in the value of BTL investment portfolio up and down the nation.

“However, true to form, it seems as though the government will do their best to spoil the party with an increase in capital gains tax via next month’s budget.

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“This is quite astounding given the string of changes already implemented to stamp duty tax thresholds and tax relief and the impact it has had on landlord numbers.

“They don’t seem to understand that the BTL sector is the backbone of the rental market and fewer landlords means fewer properties and even less affordable rents.

“Who will provide the much needed rental accommodation if not the buy-to-let sector?

“Because it certainly won’t be the government, who have proved time and time again that they’re incapable of implementing any meaningful strategy where the delivery of property market stock is concerned.”

By Jessica Nangle

Source: Mortgage Introducer

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Landlords intend to continue purchasing after SDLT deadline

BTL landlords intend to continue purchasing rental property after the stamp duty holiday has reached its conclusion, according to Foundation Home Loans.

The data revealed that 16% of landlords intend to purchase over the next 12 months, 48% plan to do so in Q1, 41% in Q2, 28% in Q3, and 29% in Q4.

In addition, just 14% of landlords said that they would abort their transaction if completion before the SDLT deadline did not look achievable.

Of those landlords intending to purchase in Q1, 65% said they were very or quite confident they would complete by 31 March.

When the respondents were questioned whether they believed the government would extend the stamp duty deadline, 28% said yes, while 31% disagreed.

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In addition, only 4% of those surveyed said they were purchasing because of the availability of the stamp duty holiday

A quarter of those intending to purchase in 2021 said they were holding off purchasing as they believed property prices were currently inflated.

The research was undertaken by BVA BDRC and carried out between December and January with the results based on 846 online interviews.

George Gee, commercial director at Foundation Home Loans, said: “As we know landlords think long and hard before adding to their portfolios and, as our research reveals, they are unlikely to just confine any purchase activity to the first quarter of this year in order to simply benefit from the stamp duty holiday.

“There are a number of positive results to come out of our exclusive research, not least landlords’ continued intention to keep on purchasing after the deadline has passed, and the news that many BTL landlords will not abort their transactions if there is no extension and they look unlikely to complete by 31 March.

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“In that regard, the next month and a half is very important for the sector.

“Foundation has put in place significant extra resources to our completions team in order to ensure we can complete as many cases as possible by the end of March.

“Looking beyond Q1, there will clearly be ongoing opportunities for advisers active in the landlord borrower space, and all the signals point to significant activity taking place in both the purchase and remortgage sectors.

“We should not forget that many landlords’ special rates are coming to an end over the months ahead, especially those that bought prior to the last stamp duty surcharge increase for additional homeowners back in Q1 2016.

“Foundation’s new range of buy-to-let products and our new limited edition limited company deals should offer landlord clients a variety of options, in order to achieve their aims through 2021.”

By Jake Carter

Source: Mortgage Introducer

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BTL Landlords to build portfolios beyond 31 March

Buy To Let landlords are undeterred by the looming stamp duty holiday deadline and intend to continue purchasing rental properties beyond 31 March, a survey by Foundation Home Loans has revealed.

Research by the intermediary-only specialist lender has revealed of the 16% of landlords who said they were going to purchase over the next 12 months, 48% said they would do so in Q1, 41% in Q2, 28% in Q3, and 29% in Q4.

Landlords were able to pick more than one quarter if they were unsure when they might complete.

The landlord research – undertaken by BVA BDRC and carried out between December and January with the results based on 846 online interviews – also found landlords seemed confident about their ability to complete purchases before the deadline. Only 14% said they would abort their transaction if completion did not look achievable.

Of those landlords intending to purchase in Q1, 65% said they were very or quite confident they would complete by the 31 March.

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Extending the deadline

When asked whether they believed the government would extend the deadline, 28% said yes, while 31% disagreed, although the questions were asked before the recent Parliamentary debate on the stamp duty holiday.

There has been growing industry support for a tapering of the deadline to allow those already within the purchase process to complete beyond the deadline date but still secure the tax saving.

Only 4% of those surveyed said they were purchasing because of the availability of the stamp duty holiday. Meanwhile, 25% of those intending to purchase in 2021 said they were holding off buying as they believed property prices were currently inflated.

The most recent house price index from Nationwide for January revealed that prices had dropped slightly by 0.3% month-on-month, and annual house price growth had slowed from 7.3% to 6.4%.

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Foundation’s research suggests landlords will look at slight house price drops throughout the year as an opportunity to add to portfolios.

George Gee, commercial director at Foundation Home Loans, said: “As we know landlords think long and hard before adding to their portfolios and, as our research reveals, they are unlikely to just confine any purchase activity to the first quarter of this year in order to simply benefit from the stamp duty holiday.

“There are a number of positive results to come out of our exclusive research, not least landlords’ continued intention to keep on purchasing after the deadline has passed, and the news that many landlords will not abort their transactions if there is no extension and they look unlikely to complete by the 31 March.

“In that regard, the next month-and-a-half are very important for the sector. Foundation has put in place significant extra resources to our completions team in order to ensure we can complete as many cases as possible by the end of March.

“Looking beyond Q1, there will clearly be ongoing opportunities for advisers active in the landlord borrower space, and all the signals point to significant activity taking place in both the purchase and remortgage sectors.

“We should not forget that many landlords’ special rates are coming to an end over the months ahead, especially those that bought prior to the last stamp duty surcharge increase for additional homeowners back in Q1 2016.”

Foundation relaunched its entire buy-to-let product range last month, with rate reductions across the board, and last week launched new Limited Edition two-and five-year fixed rates with reduced fees for those landlords purchasing or remortgaging via a limited company vehicle.

Source: Mortgage Finance Gazette

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These 10 UK cities are the most profitable for buy to let landlords

CIA Landlord has revealed its annual ranking of the best UK cities to buy to let for 2021, with some areas proving to be more profitable than others. The analysis is based on the average property price, mortgage cost, average rent income, and the monthly costs of being a landlord to calculate the monthly profit. Listed are the 10 cities with the highest monthly earnings for landlords.

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  1. Brighton
    Average property price: £410,541. Average rent: £2,044. Monthly mortgage cost: £1,411. Monthly profit: £571.85
  2. Bangor
    Average property price: £185,833. Average rent: £1,193. Monthly mortgage cost: £639. Monthly profit: £500.53.
  3. Portsmouth
    Average property price: £243,945.. Average rent: £1,379. Monthly mortgage cost: £838. Monthly profit: £479.27.
  4. Leeds
    Average property price: £228,424. Average rent: £1,323. Monthly mortgage cost: £785. Monthly profit: £477.60.
  5. Lancaster
    Average property price: £210,979. Average rent: £873. Monthly mortgage cost: £725. Monthly profit: £474.54.
  6. Bristol
    Average property price: £344,667. Average rent: £1,699. Monthly mortgage cost: £1,184. Monthly profit: £453.20.
  7. Coventry
    Average property price: £209,309. Average rent: £1,213. Monthly mortgage cost: £719. Monthly profit: £432.27.
  8. Manchester
    Average property price: £200,517. Average rent: £1,176. Monthly mortgage cost: £689. Monthly profit: £425.48.
  9. Nottingham
    Average property price: £225,917. Average rent: £1,248. Monthly mortgage cost: £776. Monthly profit: £410.21.
  10. Salford
    Average property price: £172,622. Average rent: £1,048. Monthly mortgage cost: £593. Monthly profit: £393.33.

By Claire Schofield

Source: The Scotsman

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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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Buy-to-let sentiment on the rise

There has been a rise in rental property instructions in recent months in a sign the buy-to-let market is rebounding, according to a survey of chartered surveyors.

The July 2020 RICS UK Residential Survey, published yesterday (August 13), saw 6 per cent more respondents report an increase in new buy-to-let property coming to the market in the past three months than did not.

This means surveyors are seeing landlords starting to come back or existing ones purchasing more properties.

While the professional body described the figures as only “marginally positive”, it noted it was the first time since 2016 that the flow of landlord instructions had reportedly improved.

The buy-to-let market grew rapidly after the financial crisis but has since taken a beating as a number of tax and regulatory changes have hit landlords’ pockets.

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The changes led many to predict the buy-to-let market would shrink in size leaving only ‘professional landlords’ able to make viable returns, and many buy-to-let investors did leave the market earlier this year.

Meanwhile rents are also predicted to rise by about 1 per cent at national level in the next 12 months, according to the survey, although London was the only region where projections remained negative, at -1 per cent.

The sentiment survey found anecdotal evidence to suggest the chancellor’s stamp duty cut was playing a “significant role” in lifting demand for house purchases, although respondents did not expect this to continue when wider government support measures are phased out later in the year.

Simon Rubinsohn, chief economist at RICS, said: “The strong impetus provided to the housing market is evident both in the results of the RICS survey and many of the anecdotal comments from respondents.

“However, it is interesting that there remains rather more caution about the medium term outlook with the macro environment, job losses and the ending or tapering of government support measures for the sector expected to take their toll. Significantly, some contributors are now even referencing the possibility of a boom followed by a bust.”

The government’s coronavirus support schemes for furloughed employees, the self-employed and mortgage borrowers are due to end in October.

In the survey 57 per cent more respondents saw an increase in agreed sales in July than did not, indicative of a strong pick-up in transaction levels after the hefty declines reported during the crisis.

However, 10 per cent more respondents predicted a decline in sales over the year ahead.

By Chloe Cheung

Source: FT Adviser

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Paragon: Rise in BTL remortgages shows landlords raising capital

Landlords raising capital has contributed to an increase in the number of buy-to-let (BTL) remortgages in the second quarter of the year, according to research by Paragon Bank.

Mortgage intermediaries indicated that remortgages accounted for 60% of BTL cases in the second quarter, up from 48% in the previous quarter, as new lending for house purchase fell as a result of the lockdown.

The ability to secure a better interest rate (54%) was the most common reason for remortgaging; however, 30% of landlords said that they remortgaged to raise capital, making this the second most common driver, accounting for double the remaining reasons combined.

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Landlords who own four or more properties accounted for the highest proportion of buy-to-let mortgage business, rising from 25% in quarter one to 28% over the last three months.

Moray Hulme, director for mortgage sales at Paragon, said: “These findings are encouraging for the sector because they show that landlords have not only been resilient during the recent challenges but have been planning for the future.

“The data also supports the idea that there is a shift towards a professionalisation of the private rented sector.

“This is positive because a higher number of professional landlords has been shown to correlate with higher standards in the sector.”

By Jessica Bird

Source: Mortgage Introducer