Landlord Basics » property investors

Property investment likely to become increasingly popular

Rowena — Fri, 13 May 2011 08:32:02 +0000

Buy to let investors have been making impressive profits and returns on their investment for many years. Despite the difficult climates in the financial and property markets over the last few years a recent report has shown that the buy to let market has continued to grow and is set to become increasingly popular as the year goes on.

Many reports and officials have pointed out that now is a great time for property investors to take the plunge, as not only are property prices lower than they have been for some time but rental demand continues to climb to record highs, with tenants almost falling over one another to get their hands on privately rented homes given the lack of mortgage availability in the current climate.

According to recently released figures in the first quarter of this year buy to let lending came to nearly £3 billion, which was just a bit lower than the final quarter of last year.

Officials have reported that in the current market buy to let now accounts for 12.3 percent of all outstanding mortgage in terms of value and 11.6 percent in terms of numbers.

The Council of Mortgage Lenders has recently commented on how well the buy to let market is progressing in an essentially difficult environment. A spokesperson for the CML said: “Buy-to-let continues to progress positively in the context of a stable, but still low-volume, overall market.

Demand for rental property remains strong, and as more funding becomes available we would expect to see buy-to-let lending increasing. The performance of buy-to-let loans is also holding up well, and the differential between arrears rates in the buy-to-let sector and the owner-occupier sector has narrowed substantially so that there is now only a modest difference between them.”

It is thought that with property prices much lower in many areas than they were several years ago, and with tenant demand for rental homes set to continue increasing, there are now some very good opportunities for potential investors.

One official stated: “The owner-occupier and buy-to-let mortgage markets are in much the same situation as Kate and Pippa Middleton on the big day last month – all the attention maybe focused on one of them, but in reality, the junior sibling is quietly stealing the show. As house prices flat-line, the buy-to-let market still provides excellent opportunities for investors and professional landlords. And with rental demand likely to remain strong for the rest of the year, these opportunities will continue to be available.”

More viewings stem from sunshine

Rowena — Wed, 11 May 2011 10:58:32 +0000

As most industry experts know the figures relating to property sales and viewings have not been all that impressive over the past few years, with everything from unusually cold weather conditions to restrictions in the mortgage market keeping potential buyers away from property.

However, the past few weeks has seen something of a turnaround, with officials reporting some encouraging figures when it comes to the property market.

April has been an unusual month for many consumers for a number of reasons. Firstly, the sunshine this year along with the temperatures have been amongst the highest on record for the time of year, which has delighted many consumers who are often stuck in their homes because of the bad UK weather.

On top of this consumers have been treated to two extra long four day weekends on the trot as a result of Easter followed by the Royal Wedding.

This combination has obviously given consumers the time and the inclination to get out and about, as officials from the Royal Institute of Chartered Surveyors reported that there was an increase in the number of people viewing properties for the month of April.

It is thought that the great weather and the extra time off helped to spur people on when it came to viewing, and that this may have been further encouraged by lower property prices in many areas of the country.

RICS surveyors did not want to read too much into the encouraging figures, with one stating: “The return of sellers to the market is positive, but activity still remains subdued and it is difficult to see it picking up materially over the coming months.

Although there are signs that some lenders may be reducing their grip on the purse strings, in particular with mortgages aimed at first-time buyers, there is still a long way to go before lending levels increase enough to have any real impact. Economic uncertainty may also continue to weigh on sentiment for a while to come.”

However, with the group expecting property prices to fall further over the coming months there may be many property investors who will be keeping a close eye on the market in order to snap up the bargains as they come along.

Will The Property Market Repeat The Cycle?

Boris Johnson highlights the huge investment opportunities in London

Rowena — Thu, 10 Mar 2011 09:50:35 +0000

Having recently headed off to Cannes, France for the official opening of the world’s premier property conference MIPIM, Boris Johnson has said that he plans to highlight the fabulous investment opportunities that London has to offer to developers and investors.

The Mayor of London is set to hold meetings with investors and developers during his time in France – and plans to explain to them just why this is the perfect time to invest in the capital.

London is set to host a number of hugely exciting and historical events over the next eighteen months, which will put it at the centre of global attention. These events are also set to see the capital flooded with tourists from all around the world, as they descend on the city to be part of these huge events.

The first of these is set to take place in just six weeks when Prince William marries his fiancée Kate Middleton in THE wedding of the last couple of decades.

Hot on the heels of the Royal Wedding will be the momentous arrival of the Olympic Games in 2012, which will once again turn the city into a hub of global tourism. Next year will also see the Queen celebrate her Diamond Jubilee, bringing the focus of the world back to the capital city for a third time.

With so much going on in London over the next year and a half Boris has stated that there couldn’t be a better time to invest in the area.

The mayor plans to make in clear that there is no shortage of investment opportunities in the capital – in fact, quite the opposite, with the arrival of so many huge events in such a short space of time resulting in the development and creation of huge investment opportunities.

He said that there were many excellent investment opportunities in the Olympic Park, the Royal Docks and other parts of East London, and as a result of the creation of a brand new district in the city with excellent transport links.

He said: “Now is the time to invest in the world’s best big city. London is packed with many golden opportunities for overseas investors and it can only get better.

We’re already off the starting blocks delivering the London 2012 legacy well over a year before the first athletes have gathered on the starting line.

The promise London offers is unrivalled and that is what I will be telling this key gathering of developers and investors.”

Demand for rental properties is at a record high

Rowena — Thu, 06 Jan 2011 10:07:48 +0000

The Association of Residential Letting Agents (ARLA) has reported that the number of people trying to find homes to rent in the UK is higher than ever and is in fact at a record high.

Just a year ago, only a quarter of agents were saying that the demand for properties was higher than the number of properties available but when recently questioned, that figure has now tripled to three quarters.

When recently questioned, three quarters of agents said that the demand for properties was higher than the number of properties available. That figure has tripled from a quarter just a year ago.

The fact that more people are being forced to rent due to problems with mortgage availability, is making this situation much worse. Because of this, many people end up in a property they don’t really want, an unsuitable area or with high rent after spending months trying to find a home.

ARLA, the only professional self-regulating body that looks after lettings, is concerned that many tennants may start getting ripped off due to more independent landlords joining the market and trying to exploit desperate renters.

UK housing market ends 2010 on the up

Rowena — Wed, 05 Jan 2011 11:06:18 +0000

2010 saw the best December for the number of house sales for 3 years in the UK, according to the latest Agency Express Property Activity Index.

According to the index December saw sales up 8.2% on December 2009 and 56.5% higher than December 2008. This was despite a fall in monthly UK house sales of 26.7% in December compared to November, but this pre Christmas dip is in line with the historic trend.

The year ended in a better state than it began with December house sales 32% up on January’s. Also in line with previous years was the 41.3% decrease in December compared to November, but still 22.5% higher than December 2009 and 37.1% better than December 2008.

Managing director of Agency Express, Stephen Watson said: “2010 has certainly been a fascinating year for house sales activity. So many factors have had an effect on home owner and house buyer sentiment that it’s difficult to draw too many firm conclusions about what 2011 will bring. However, the contraction in supply of houses on the market could mean that there will be a stabilisation of house prices after the recent falls that may lead to renewed confidence returning to the market.

“With the impacts of the government’s austerity measures still to be fully felt in the economy, the increase in VAT and the expected continuation of very low interest rates, 2011 will undoubtedly be another interesting year for the property and mortgage markets. January has traditionally seen a significant uplift in properties being put on the market so we will be closely monitoring the findings of our Index for signs of evidence of an increase in activity over the next few weeks.”

The North East, Wales and Central England fared best for house sales in December with falls of 13.0%, 18.8% and 19.6% respectively.

Worst hit regions were Scotland down 36.6%, Yorkshire down 35.2% and the South East down 30.7%. The only UK city not to see a drop in sales during December was Milton Keynes, with Nottingham seeing just a 4.2% drop with Exeter seeing a 4.4% decrease.

At the other end of the scale, Coventry had the worst monthly decline at 53.3%.

Rural property values 96% up over 10 years

Rowena — Tue, 16 Nov 2010 10:09:41 +0000

Figures published by Halifax reveal that in the past 10 years the average cost of a UK house in the countryside has almost doubled.

Rural property prices have risen by the equivalent of £200 a week, which is a total of 96% (an average £102,722) since 2000, the bank’s data shows. And urban property prices have gone up by 91%, which is almost the same rate over the same period.

Compared with city houses, countryside homebuyers paid an average 17% extra in 2000, but now this proportion is up to 20%.

The downturn has reduced prices by 20% on rural property, slightly less than the 25% of urban property in 2007-09. But over the past year urban property price rises were slightly higher than for rural homes. Urban property values since the end of 2009 were up 5%, while countryside homes increased just 4%.

The most expensive rural local authority in which to buy a home South Oxfordshire, has an average house price of £388,326, which is 85% above the UK-wide rural average. East Ayrshire in Scotland is the cheapest, averaging £107,515.

New Initiative Offers Property Investors Protection Against Squatters

Rowena — Thu, 11 Nov 2010 08:53:10 +0000

With the number of people turning to squatting increasing, Grant Shapps has revealed a new initiative to help property investors and homeowners to protect their properties from squatters.

Offering a ‘proactive’ approach to handling this problem; what many property experts are becoming increasingly worried about is who is turning to squatting.

Unable to afford to rent or invest in property, new research has discovered that many young professionals are turning to squatting as a solution to their housing problems. As a result, properties which look or appear vacant are becoming increasingly targeted.

So how does Shapps suggest overcoming this problem?

In his legal guide, he began first by reassuring property investors/homeowners that the law is on their side, before offering them the following tips:

· Keep void periods in your property to a minimum

· Make sure your property investment looks occupied at all times

· Increase security in the property by limiting accessibility

However, despite these tips, Katherine Hibbert from the Advisory for Squatters has revealed one key concern to Shapps initiative i.e. that he is wrongly informing property owners that the law is on their side. Squatters technically have to locate a property which is empty in order to squat in it. This means, the law actually only protects property investments that are in use as homes and not those that are empty.

And if this information is to be taken seriously, then now more than ever it is essential to make sure that your property let is never vacant…

Luckily with statistics revealing that 5.8 tenants are currently vying for every property and properties are only remaining empty for less than a week, preventing squatters from infiltrating your property should become a lot easier.

Eviction Petition Gets 2,000 Signatures

Rowena — Wed, 10 Nov 2010 08:46:48 +0000

The recent Rebalancing the Law petition has already attracted a lot of attention according to new reports. Aimed at speeding up the eviction process of bad tenants, in the last month alone it has attracted 2,000 signatures.

At the moment, regaining possession of a rental property can take nearly 6 months because of the need to take tenants to court.

However, with many courts divulging that they have got more cases than they can handle – plus the risk of closure (due to spending cuts) – this wait is only going to get worse.

And this could spell bad news for property investors…

Essentially allowing tenants to remain in their rental properties for months on end whilst still making no rental payments; should it take property investors over 6 months to evict them, this could damage a property investors income.

Hopefully, this petition will put a stop to all this when it is presented to Downing Street this coming Friday, and ensure property investors are no longer being punished by bad behaving tenants. We will have to wait and see…

Green Deal Urges Property Investors To Become Eco-Friendly

Rowena — Thu, 04 Nov 2010 08:33:48 +0000

With the energy bill fast approaching and Green MEP Jean Lambert calling for more funding, incentives and policies to make properties more environmentally friendly, Climate Change Secretary Chris Huhne has recently revealed plans for a new ‘Green Deal’ scheme.

Created to encourage property investors who have got landlord insurance to renovate their property lets and make them more environmentally friendly, during his statement Huhne announced:

Tenants asking for ‘reasonable’ property improvements that will improve the energy efficiency of a property investment will have them done after 2015
The costs of performing these eco-friendly improvements will not have to be covered by landlord insurance holders
Local authorities will be given the power to insist that property investors who own the poorest performing property lets carry out these improvements to make their properties more attractive to tenants

And these plans could spell good news for both property investors and tenants alike…

With rising gas prices making property affordability more difficult, by offering property owners/tenants a property investment that is energy efficient, the property will instantly become more rentable.

Currently the Green Deal Scheme is not set to launch until autumn 2012 but with the energy bill just around the corner, property investors are encouraged to keep an eye out for how this scheme develops.

The future is private rented accommodation

Rowena — Tue, 02 Nov 2010 10:08:04 +0000

According to London property developer and landlord Iain Hutchinson, whose London Rental Housing Company owns 150-odd houses, Britain’s property owning boom is at an end.

The future is private rented accommodation provided by big City institutions, and he’s not the only one with that view. Powerful lobbyists and financial giants such as Legal & General, Aviva and ING, have been supporting ‘Build to let’.

With a quarter of all rental properties being let through sealed bids, London’s rental market is flying thanks to the recession, according to letting agent ludlowthompson.com.

But only 140,000 new private houses will be built in the UK this year, even though there is this level of demand.

Hutchinson wants to build something similar to Swiss private rented housing which consists of simple, three-bedroom, family flats in complexes which have their own centralised heating plants with simple-to-maintain plumbing and electrics. There will also be cafes, laundrettes and shops.

Rents would be just below the £340 housing benefit limit to be introduced next year for three-bedroom accommodation, at around £300 per week.

Hutchinson says gross returns of ten per cent are possible and is looking to buy London sites in Greenwich, Hillingdon, Bromley and Croydon as land prices are half what they were in 2006.

He also predicts his big rental schemes would thrive alongside private rental sector landlords, who will not cope with the surge in rental demand.