Landlords urged to hold off from incorporating until after Budget

By Marc Shoffman

Port of Vancouver USA

The National Landlords Association (NLA) is urging members to hold off from incorporating in case the Government tries to clamp down on limited companies being formed to mitigate income mortgage interest relief changes.

Richard Lambert, chief executive of the NLA, said the Chancellor hinted in his Autumn Statement that the Treasury is concerned by the drop in tax revenues as a result of businesses across the economy incorporating to reduce their tax bills.

He warned that landlords, many of whom are incorporating to preserve mortgage interest relief, should wait to see whether a consultation is launched in next week’s Budget before making a decision.

It comes as the proportion of landlords intending to take out commercial loans to fund their property purchases has doubled over the past 18 months as they look to mitigate the impending buy-to-let tax changes.

Research by the NLA shows that the proportion of landlords planning to use commercial loans has risen from 10% in July 2015 – when the changes to taxation were first announced – to 19% at the end of last year.

The changes to taxation will take place from April and, once fully phased in by 2021, will prevent landlords with buy-to-let mortgages from deducting their interest payments or any other finance-related costs from their turnover before declaring their taxable income.

This rise coincides with increasing numbers of landlords telling the NLA’s quarterly landlord panel that they would form a limited company to preserve the mortgage interest relief perks. One per cent of landlords said they would incorporate in January 2016 and the figures now stands at 6%, which the NLA says equates to a rise from 20,000 to 120,000.

Lambert said: “Over the past year more than one hundred thousand landlords have formed a limited company in order to beat the tax changes, and this overlaps with an increasing intention to look to commercial loans to fund future purchases.


“While commercial loans are available to non-incorporated landlords, they tend to be a source of funding more commonly used by limited companies looking to expand their property portfolios, so we’d expect to see this trend develop as the year plays out.”

http://www.propertyindustryeye.com/landlords-urged-to-hold-off-from-incorporating/

Fixflo and Qube join forces on property maintenance platform

By Graham Norwood

Smart repair reporting software Fixflo is teaming up with Qube Global Software to allow letting agents and property managers to handle repairs more efficiently.

Qube Global Software launched its Qube Connect Partner Programme earlier this year, with the purpose of creating a network of software and service providers that will deliver better deals and improved service to customers.


Residential block managers who use the Qube Property Management product will now be able to access Fixflo software through a web app. Launched over three years ago, Fixflo is now used in more than 400,000 lettings units across the UK.

Using the service, which is available in 40 languages, tenants can report faults and issues as soon as they occur, receive instructions for handling emergency incidents and alert the relevant property manager. This brings operational efficiencies, improves asset protection by dealing with problems before they escalate and delivers enhanced customer service.

“With the Build to Rent sector set to grow rapidly over the next decade, our service will become a vital resource for property professionals keen to drive efficiency and deliver excellent customer service to tenants” claims Rajeev Nayyar, director at Fixflo.

“Tenants now expect to report a leak in their roof in the same way they report a problem with their Amazon delivery” according to Paul Manning, sales director at Qube.

https://www.lettingagenttoday.co.uk/breaking-news/2017/2/fixflo-and-qube-join-forces-on-property-maintenance-platform

Bristol, Oxford and Manchester lead annual house price growth in UK cities

House prices in key cities in the UK increased by 6.9% in the 12 months to January 2017, led by Bristol, Oxford and Manchester, the latest index data shows.

But the annual rate is down by 1% and London has seen growth fall to 6.4%, its lowest level for three and a half years, according to the figures from the Hometrack index.

Indeed, London is now in eighth place in the city price ranking. With a rise of 9.5% year on year to an average of £263,200 Bristol is top, followed by Oxford, up 9.2% to £430,200 and Manchester up 8.3% to £150,600.

The only city out of the 20 ranked to continue to see an annual price drop is Aberdeen where prices are down 3.7% to £186,200 but month on month they are up by 2.8%, one of the strongest monthly gains in the index.

Month on month Liverpool saw prices rise by 2.9%, Leicester by 2.5%, Bournemouth by 2.3% and Manchester by 2%. But Edinburgh prices were down 1.3% month on month, Belfast own by 0.2% and Sheffield down by 0.1%.

The index report says that the slight drop in annual price growth overall is due to weaker investor demand after stamp duty changes last year and the impact of the vote to leave the European Union in June.

London is being overtaken by large regional cities such as Birmingham, Manchester and Liverpool where prices are rising off a lower base and where affordability levels remain in line with their long run average, it also suggests. Manchester is the fastest growing city outside southern England where prices are up 8.3% in the last year on an average price which is a third that of London.

The report also says that slower growth in London is not surprising given house prices are 85% higher than they were in 2009 and this growth is primarily a result of rising incomes and strong demand with buying power fuelled by record low mortgage rates.

‘In our view there is material upside for house prices in the coming years in many cities where the recovery since 2009 has been limited. This is based on our analysis of previous housing cycles and the recent profile of the recovery in London,’ the report says.

‘The beneficiaries will be cities where investment in employment, infrastructure and regeneration will help stimulate the local economy. The timing and scale of future house price growth will, of course, depend upon the outlook for jobs, incomes and mortgage rates,’ it concludes.

http://www.propertywire.com/news/uk/bristol-oxford-manchester-lead-annual-house-price-growth-uk-cities/

Mortgage lender launches cut-rate deals

By Marc Da Silva

With interest rates at a record low level, competition among mortgage providers, somewhat unsurprisingly, continues to hot up, with lenders shaving percentage points off their buy-to-let mortgage rates in an effort to entice buy-to-let landlords acquiring new properties through their doors.

Pepper Homeloans has become the latest lender to improve its buy-to-let offering by expanding its product range and slashing rates by up to 0.5%.

The specialist lender has strengthened its range of buy-to-let mortgage products by launching a two-year limited deal with rates starting from 3.38% across its near prime range, while its five-year fixed rates now start from 4.18%.

Rob Barnard, sales director of Pepper Homeloans, said: “We are delighted to be making these enhancements to our buy-to-let range. Brokers can easily submit a decision in principle online and will be assured of a fast response.”


Pepper announced enhancements to its residential mortgage range earlier this month, which included lower rates and new 30-month, three and five-year fixes.

https://www.landlordtoday.co.uk/breaking-news/2017/2/mortgage-lender-launches-cut-rate-deals

East of England leads strong regional growth in rents

By Graham Norwood

New figures from Your Move suggest the rental market performed strongly across England and Wales, with rents rising in eight of nine regions.


The East of England was home to the fastest rising rents in the last year. Prices in this area increased by 6.9 per cent in the 12 months to the end of January and now stand at £870 per month. This region also also saw the fastest growth month-on-month with rents ticking up 0.7 per cent during January.

Your Move claims prices in this area may have been buoyed by people living in London looking beyond the capital for cheaper accommodation.

Other areas to see strong growth included Wales – where prices increased by 6.5 per cent in the past 12 months to reach £586 - and the East Midlands which saw a 4.5 per cent uplift compared to a year ago. The average property in this region – which includes major cities such as Derby, Leicester and Nottingham – now lets for £634 per calendar month.

https://www.lettingagenttoday.co.uk/breaking-news/2017/2/east-of-england-leads-strong-regional-growth-in-rents

RLA urges landlords to lobby MPs over tax changes

By Marc Da Silva

The Residential Landlords Association (RLA) is urging landlords to lobby their local MP over taxation changes announced by the now former chancellor George Osborne in 2015.

The Association is campaigning against the government over the proposed changes detailed in Clause 24 of the Finance Bill relating to the proposed removal of mortgage interest relief, which will be phased in from April.

The trade body wants landlords to contact and visit their MP over these changes and explain to them the damage that they will have for both tenants and landlords.

The campaign is timed to run in the days leading up to Chancellor Phillip Hammond’s Budget Statement, due on 8 March.

To highlight the wide-ranging campaign, the RLA has have pulled together the top 10 constituencies where its members have been most active, these even include the seats held by the Chancellor Phillip Hammond, the Prime Minister Theresa May, and the former Chancellor George Osborne.

Top 10 constituencies targeted by RLA members:

1/ Corby

MP: Tom Pursgolve (Conservative)

Majority: 2,412

2/ Warrington South

MP: David Mowat (Conservative)

Majority: 2,750

3/ Peterborough

MP: Stewart Jackson (Conservative)

Majority: 1,925

4/ Eastbourne

MP: Caroline Ansell (Conservative)

Majority: 733

5/ Brighton Kempton

MP: Simon Kirby (Conservative)

Majority: 690

6/ Tatton

MP: Rt Hon George Osborne (Conservative)

Majority: 18,241

7/ Runnymede and Weybridge

MP: Rt Hon Philip Hammond (Conservative)

Majority: 22,134

8/ Maidenhead

MP: Rt Hon Teresa May (Conservative)

Majority: 29,059

9/ Liverpool, Riverside

MP: Louise Ellman (Labour)

Majority: 24,463

10/ Gower

MP: Byron Davies (Conservative)


Majority: 27

https://www.landlordtoday.co.uk/breaking-news/2017/2/rla-urges-landlords-to-lobby-mps-over-tax-changes

Triple towers planned for Brentford:ambitious scheme for west London suburb includes ultra-modern 'vertical village' with 550 new homes and business pods

By Ruth Bloomfield

Ambitious scheme for three towers designed by award-winning architect Will Alsop is set to propel run-down west London suburb of Brentford into the premier league of London regeneration zones...

A new landmark: Will Alsop’s residential Brentford towers

This is the ambitious scheme set to propel humble Brentford into the premier league of London regeneration zones. The run-down west London suburb is the planned location for homes in ultra-modern triple towers designed by RIBA Stirling Prize-winning architect Will Alsop.

The design is show-stopping but it has to be said, the location at Capital Interchange Way, tucked between the M4 and the South Circular, is less so.

However, as well as being very near the motorway and Heathrow airport, it’s handy for central London. If approved by Hounslow council, the project will include 550 new homes, completed by about 2021.

There will also be transport links, a bus depot, new offices and business “pods” for start-up firms, parks between and on top of the blocks, and a stadium for Brentford Football Club on the industrial site close to Kew Bridge station.

While modest by central and east London standards, the planned three main buildings will, at 18, 19, and 20 storeys, form a west London landmark that will be easily visible from the M4, Gunnersbury Park, and from planes approaching Heathrow.

As well as their unusual design — one tower will be rectangular, one oval, and one will taper outwards from a narrow base, with Alsop’s trademark pops of primary-colour cladding — the buildings feature some novel approaches to “vertical village” living.

Runners will enjoy a roof-level running track “providing opportunity for exercise away from the busy roads”, and there will be areas for residents to use as allotments for growing fruit and veg.

Given its proximity to the M4, air pollution at the site will be a concern. However, a report commissioned by site owner Facilitas Technical Engineering Services, a privately owned property and construction company, claims that after three months of monitoring nitrogen dioxide and particulate levels on Capital Interchange Way it concluded that local air quality is within standards set out by the World Health Organisation, the European Union and the British Government.

Alex Moussaieff, development consultant at estate agents Aston Chase, believes buyers will consider homes with a motorway blight on the doorstep because they are desperate for somewhere to live at the right price. The homes in the new scheme have not yet been priced.

The development is part of the ongoing rejuvenation of the hinterland of the Great West Road, once nicknamed the Golden Mile and lined with some of London’s finest Art Deco industrial buildings. Over the last few years developers have been taking over these buildings and repurposing them as housing, notably Bellway Homes’ WestSide scheme on the site of the Thirties Alfa Laval building, and Barratt London’s Great West Quarter, a 900-home scheme centred on the Grade II-listed Wallis House, originally occupied by aircraft company Simmonds Aerocessories.

http://www.homesandproperty.co.uk/property-news/triple-towers-planned-for-brentford-ambitious-scheme-for-west-london-suburb-includes-ultramodern-a108306.html

Barclays offers to pay your stamp duty, but would you do better to pick up the tab and get a lower-rate mortgage?

By Myra Butterworth

• Barclays is offering to pay £1,250 in cashback to borrowers who are buying a property costing between £100,000 and £150,000
• For those buying a property above this amount - to a top limit of £500,000 - it is offering to pay £2,500 in cashback 
• But experts suggest you'd be better off paying the stamp duty yourself

Homebuyers could get their stamp duty paid with a new mortgage from Barclays.

The high street lender is offering to pay borrowers up to £2,500 in cashback via its Homebuyer Cashback Mortgage, which is  fee-free and fixed for five years at 2.69 per cent.

This amount of cashback would completely cover the stamp duty bill on a £250,000 home.

Homebuyers could get their stamp duty paid in full with a new mortgage from Barclays

There are different amounts of cashback on offer under the scheme. Barclays is offering to pay £1,250 in cashback to borrowers who are buying a property costing between £100,000 and £150,000.

And for those buying a property above this amount - to a top limit of £500,000 - it is offering to pay £2,500 in cashback.

But is this a good deal, or would you be better off opting for a different mortgage and paying the stamp duty yourself?

For this Barclays deal to be attractive, the saving on stamp duty would have to outweigh any saving offered by a cheaper mortgage rate elsewhere.

There are cheaper mortgage rates available than the 2.69 per cent on the Barclays product, which is fixed for five years and comes with no arrangement fee.

However, some of those cheaper deals require you to have a larger deposit, as much as 40 or 50 per cent, while the Barclays deal only requires borrowers to have a 20 per cent deposit.

Ray Boulger, of mortgage brokers John Charcol, explains: 'The Barclays deal is unlikely to be good value to anyone with a deposit of at least 25 per cent as that's when much cheaper rates are available elsewhere.

'Rates are much higher for those with a smaller deposit and so this deal could in theory be helpful for those in that category – but with five year fixed rates as low as 2.14 per cent available from other lenders with a 20 per cent deposit, most borrowers will find better value by forgoing the cashback.

'The sweet spots are only going to provide good value for people who have a deposit of between 20 per cent and 24 per cent and are buying a property at just over the £150,000 limit.'

The Barclays product does not apply to buy-to-let properties or Help to Buy. However, it does apply to shared ownership schemes and shared equity.

The higher level of cashback being offered by Barclays - at £2,500 as opposed to £1,250 - only cuts in if the value of the property being bought is above £150,000.

With this in mind, Mr Boulger suggests it would be worth paying an extra £6 if a property has an asking price of £149,995 in order to obtain the extra £1,250 cashback being offered on more expensive properties.

For the Barclays deal to be attractive, the saving on stamp duty would have to outweigh any saving offered by a cheaper mortgage rate

Take the cashback or opt for a cheaper rate?
Mr Boulger crunched some numbers to determine if borrowers could save money with the Barclays deal, covering various price points included in the deal, from the bottom of the scale at £100,000 to the top at £500,000.

He  also considered how much the deal costs if you buy a property worth £150,000.01, which is the point at which Barclays offers a higher level of cashback.

The table below compares the Barclays mortgages with alternative deals offering a more competitive rate, including one from the lender Platform that comes with a rate of 2.14 per cent. It also includes Barclays non-cashback mortgages that come with a lower rate, as a point of comparison.
It looks at the cost of interest over the five-year period, minus any cashback on offer.

For example, a borrower pays £47,337 for the Barclays cashback option on a property costing £500,000 with a £400,000 mortgage, while they pay almost £7,000 less for the Platform deal.

Someone purchasing a £250,000 home with a £200,000 mortgage pays £22,419 with Barclays but £20,717 with Accord.

Indeed, there are no scenarios in Mr Boulger's calculations where a borrower would be better off with the Barclays deal. Instead, they would save money by taking a cheaper rate elsewhere and  paying the stamp duty themselves.

Barclays is keen to point out, however, that their products offer the highest cashback in the market, and come with free valuations and no application fee.

It suggested that an average customer would look to shop around once the initial fixed period of five years has come to an end, claiming: 'Customers tend to consider both the effective cost over the initial fixed term (in this case five years), as well as cash flow implication when choosing a product, rather than the full 25 year term.'

It concluded: 'Essentially we believe these products offer fantastic value for customers and we have not claimed them to the cheapest.'


You can compare the cost of rival deals using our True cost mortgage calculator

http://www.dailymail.co.uk/property/article-4220240/Barclays-offers-pay-stamp-duty-mortgage-cashback.html

Letting agent launches new Airbnb service which passes on financial benefit to landlords

By Rosalind Renshaw

A new home-sharing service has launched, allowing tenants to sub-let their homes in Airbnb-style – but passing on some of the financial benefit to the landlord.

Letting agents Lavanda says London landlords could benefit to the tune of a 10% uplift in rental yields.

The firm claims to be offering an innovative and fully compliant letting product.

While home sharing via platforms like Airbnb is a fast-growing activity, the drawback is that it has largely been conducted in breach of tenancy agreements, planning permission, mortgages and insurance policies.

Lavanda claims to get round this with a new form of lease, which entitles the tenant to sub-let for up to 90 days a year, while Lavanda itself manages the properties.

A portion of the sub-letting income is shared transparently with the landlord.

Lavanda can also provide the tenant with a hotel type of service in return for a monthly fee, which is also shared with the landlord.

Guy Westlake, CEO of Lavanda, said: “Our product taps into the way people want to live today, ultimately powering maximum yield to landlords and a more affordable rental proposition to tenants.

“Home sharing and serviced living are the new norms. It is time to embrace and professionalise this market, and we are excited to help the industry take its first steps in this direction.”

The business aims to capture 10% of the London lettings market within the next five years.


The company – which provides three core products, lettings, Airbnb management and serviced living – has a 30-strong team which includes ‘growth manager’ James Robotham, a former senior negotiator at Knight Frank.

A new home-sharing service has launched, allowing tenants to sub-let their homes in Airbnb-style – but passing on some of the financial benefit to the landlord. Letting agents Lavanda says London landlords could benefit to the tune of a 10% uplift in rental yields. The firm claims to be offering an innovative and fully compliant letting product. While home sharing via platforms like Airbnb is a fast-growing activity, the drawback is that it has largely been conducted in breach of tenancy agreements, planning permission, mortgages and insurance policies. Lavanda claims to get round this with a new form of lease, which entitles the tenant to sub-let for up to 90 days a year, while Lavanda itself manages the properties. A portion of the sub-letting income is shared transparently with the landlord. Lavanda can also provide the tenant with a hotel type of service in return for a monthly fee, which is also shared with the landlord. Guy Westlake, CEO of Lavanda, said: “Our product taps into the way people want to live today, ultimately powering maximum yield to landlords and a more affordable rental proposition to tenants. “Home sharing and serviced living are the new norms. It is time to embrace and professionalise this market, and we are excited to help the industry take its first steps in this direction.” The business aims to capture 10% of the London lettings market within the next five years. The company – which provides three core products, lettings, Airbnb management and serviced living – has a 30-strong team which includes ‘growth manager’ James Robotham, a former senior negotiator at Knight Frank.

Bovis to pay £7m to compensate customers for poorly built homes

By Rupert Neat and Graham Ruddick

Housebuilder apologises for poor quality of some properties as dissatisfied owners organise protests

Bovis admitted that some homes were rushed to meet sale targets. Photograph: Rui Vieira/PA

Bovis Homes is to pay £7m to repair poorly built new homes sold to customers, raising fresh questions about the standards of new-build properties across the country and the regulation of the market.

The company – one of the biggest housebuilders builders in Britain – will pay compensation after angry customers formed a Facebook group accusing Bovis of pressuring them to move in to incomplete houses so it could hit sales targets.

The boss of Bovis apologised to customers on Monday for the poor quality of their houses and promised to finish them “to their satisfaction”. He refused to state how many homes needed the urgent repair work, or how much it will cost to fix each house. The company also refused to say which developments were worst affected, but it is understood that many of the problem homes are in Kent.

The announcement led to more than £100m being wiped off the stock market value of Bovis, with its shares falling 10% to 757p.

The news comes amid growing complaints about the quality of new homes and the organisation that sets the standards for new-build properties. Critics claim NHBC , which provides 10-year warranties for most new homes in Britain, is failing to protect consumers. Another recent controversy over new homes has seen Britain’s largest housing association, Clarion Housing Group, agree to buy back some properties on a housing development in the east London borough of Havering.

Oliver Colvile, the Conservative MP who chairs an all-party parliamentary group on new builds, called for an independent ombudsman to hold housebuilders to account.

“A lot of developments across the country are not very good, and I’m concerned about all of this,” he said. “There is a genuine need for more housing but we need to ensure they are going to be good quality housing rather than the sometimes frankly rubbish.

“Buying a house is the biggest financial investment families are going to make. It is their dream and suddenly they find out it is not fit for purpose.”

Paula Higgins, chief executive of the Homeowners Alliance campaign group, said buying a new homes is “riskier than buying a home that has been standing for 100 years”.

She added: “People are going in with their eyes shut because they think they are getting the same protection as other big purchases. There need to be alot more consumer protection.

“[The Bovis homes] were signed off for the needs of the shareholder, not for the needs of the homeowner.”

Earl Sibley, Bovis’s interim chief executive, announced the £7m “customer care provision” as homeowners prepare to protest at the company’s annual meeting in May.

Sibley, who stepped in after Dave Ritchie quit after a profits warning last month, said he would make fixing customers homes the “absolute operational priority”. He said the company had experienced a much higher number of “snagging issues” on new homes than it would normally expect and had conducted a “thorough and detailed review”.

He admitted that the company’s customer service “fell materially short” and had been “declining for some time”. Sibley promised to conduct an “end-to-end review” of the company’s whole production process, and has launched a “customer service task force” to urgently fix faulty homes.

Sibley declined to comment when asked if Ritchie’s exit from the company after 18 years concerned the shoddily built homes.

Just one of many issues that angered Bovis customer Robert Elmes at his new home in Milton Keynes. Photograph: Robert Elmes

The affected customers have been left nursing problems such as faulty plumbing, no guttering, and half-finished tiling. Rob Elmes said he was offered £3,000 if he and his wife completed on 23 December, but declined the offer because of the defects with their £320,000 three-bedroom property in Inkberrow, Worcestershire. Helen Batt said her £389,995 Bovis home in Maidstone, Kent, had no turf in the back garden, the wrong kitchen units and had not been carpeted.

 Some of the snags at Bovis customer Helen Batt’s new home in Maidstone, Kent. Photograph: Helen Batt

More than 1,400 have joined the Bovis Homes Victims Group on Facebook while others have posted a series of videos showing their poorly built homes on YouTube.

Marc Holden, spokesman for the campaign, said he had never expected the Facebook campaign to have any effect but now speaks regularly directly with Sibley and is helping advise the company on how to improve customer service.

“I was quite cynical that little old me and our Facebook group trying to fight a big company would have any effect, but they actually have changed,” he said on Monday. “Well, the proof will be in the pudding. But I do believe they are genuinely trying to change.”

Holden, who spent £490,000 on his home in Milton Keynes, said there were more than 100 faults identified in his house, many of which have still not been fixed almost a year after he moved in. “It was a nightmare, I don’t see how it could have got worse,” he said. “But I guess it has to get bad before someone gets a kick up the arse to do something.”

Sibley said he had personally visited several customers’ homes to survey the problems and apologise in person and was “working with them individually” to fix the issues unique to their homes. He was unable to provide a figure for the average cost to fix the homes, or identify the bill for the worst-built home.

A snagging issue at Robert Elmes’ home in Milton Keynes. Photograph: Robert Elmes

“Our customer service proposition has failed to ensure that all of our customers receive the expected high standard of care,” Sibley said. “We are fully committed to putting our customers back at the centre of everything we do and to delivering a much improved level of customer service.”

Some customers will be paid back for urgent work that they have already paid for, and several will be paid compensation on top of the cost of the remedial repairs.

The cost of compensating customers knocked Bovis’s full-year profits, which fell 3% to £154.7m, below analysts expectations of £160m to170m. The company said its profits would fall again next year as it would reduce the number of units it builds by 10-15%.

Bovis built almost 4,000 homes last year, but said 180 properties that should have been completed in 2016 had yet to be handed over to buyers.

https://www.theguardian.com/business/2017/feb/20/bovis-to-pay-7m-to-compensate-customers-angry-at-poorly-built-homes

Rate rise fears driving remortgage surge in the UK

Home owners in the UK are increasingly looking to remortgage as they fear that interest rates are more likely to rise than they were a year ago, new research has found.

There was a 14% increase in the number of remortgagers looking for lower monthly payments in December 2016, according to the analysis carried out by conveyancing service provider LMS.

Some 10,800 remortgagers said they believe that there will be a rates rise within the next 12 months compared to 6,500 in December 2015, the research found. It also found that 85% lowered their mortgage by remortgaging.

Of the 27,700 remortgages carried out in December 39% of remortgagers surveyed by LMS said they anticipate a rate rise within the next year, up from 25% in December 2015.

LMS says that the increased remortgage activity, also reported by the Council of Mortgage Lenders, has been driven by an increase in the number of people looking to lower their monthly outgoings, too.

The research also found that price was by far the most important factor when choosing a lender. More than half, 51%, of remortgagers said they chose their lender based on low cost deals while 25% chose a lender as recommended by their broker or financial advisor.

Just 8% chose a lender on the basis of their reputation, 6% on customer service, and 3% chose a lender recommended by a friend or family.

Keen to capitalise on potential savings, 56% expect to remortgage again within the next four years, whereas 17% plan to wait more than eight years.

LMS saw a lull in remortgaging activity from November to December, although the majority of the change was the result of a seasonal slowdown. In the last 10 years, the number remortgaging has always fallen between these two months.

‘Record low rates and anticipation of a rate rise in 2017 contributed heavily to the huge surge in activity. With inflation set to outstrip wage growth over the coming year, the opportunity to lower mortgage rates and reduce monthly outgoings will provide welcome relief for many families dreading the squeeze on household budgets, evidenced by price being the primary motivation when choosing a lender,’ said Andy Knee, chief executive of LMS.

‘It’s rewarding to see consumer awareness of the potential savings on offer is now so high. Savvy homeowners are already looking to remortgage again in the not too distant future. We anticipate a steady stream of remortgage activity throughout the first quarter of 2017,’ he explained.

http://www.propertywire.com/news/uk/rate-rise-fears-driving-remortgage-surge-uk/

Sub-let 'agency' markets rental homes on portals and Airbnb

By Graham Norwood

A new form of agency which wants to blend traditional letting with Airbnb-style short lets has launched in London.

Lavanda claims it can increase net rental yields for landlords by up to 10 per cent “by embracing the sharing economy”.

Lavanda says short-let ‘homesharing’ via platforms like Airbnb is one of the capital’s fastest growing industries but it claims that to date this is an activity that has largely been conducted in breach of planning permission and rules governing leases, mortgages and insurance policies.

“Although a segment of the market with huge disruptive potential, it has until now simply been evolving too quickly to entice landlords to engage more meaningfully” says a statement from Lavanda. So the company is offering a service which it defines as a new product called ‘The Service Let’.

The firm enters into a contract with the landlord, allowing Lavanda to manage the property and permitting sub-letting by the tenant.

“In the context of a Service Let, a long-term tenant is entitled to sub-let the property up to a maximum number of 90 days in a calendar year - at the landlord’s discretion but always compliant with local London planning restrictions” says the firm.


Lavanda will offer to manage this, claiming “a hassle-free, luxury hospitality service guaranteeing a boutique hotel-style guest experience worthy of ‘superhost’ status” - maximising sub-letting revenue for the tenant.

Lavanda offers tenants additional hospitality-style services such as laundry, a conceirge service and an on-call repairs service. “A percentage of revenues generated by these services are also shared transparently with the landlord” says the firm.

The business is aiming high, claiming it wants to capture 10 per cent of the London lettings market within the next five years. Amongst its 30-strong staff is James Robotham, a former senior negotiator at Knight Frank now employed by this new agency as a 'Growth Manager.'

https://www.lettingagenttoday.co.uk/breaking-news/2017/2/sub-let-agency-markets-rental-homes-on-airbnb-and-main-portals

Asking price growth slows to lowest rate in almost four years as housing market stalls

By Isabelle Fraser

CREDIT: CHRISTOPHER FURLONG/GETTY IMAGES

The growth in house prices has slowed to the lowest rate in almost four years as sellers were warned against overpricing their properties.

Rightmove’s index of asking price for properties found that the annual rate of growth was just 2.3pc, the lowest since April 2013.

For this time of year, it is the slowest rate of growth since February 2009.

However, it said that demand was up, with traffic to the website 3pc higher than January last year, when it was boosted by the surge of investors to purchase uy-to-let properties before stamp duty was hiked in April.

Rightmove said that the lower rate of house price growth means it is riskier for sellers to overprice their homes. Miles Shipside, director of Rightmove, said: “We’re approaching the territory where many buyers are unable or unwilling to pay what sellers are asking, given the negative combination of rises in the cost of living, tighter lending criteria, and a dose of Brexit uncertainty.

One in five properties are overvalued, and have been heavily reduced, according to Which? CREDIT: TOBY MELVILLE/PA WIRE

“The housing market has had a long sprint since April 2013 when the annual rate was last below this level, so it’s not surprising that upwards price pressure is running on tired legs with average prices today being 23pc or nearly £60,000 higher than they were then.”

This comes after research from Which? found that one in five properties in England and Wales are overvalued, and have been heavily reduced by more than 5pc from their original asking price.

The housing market is slowing, with fewer transactions expected this year: Adam Challis, head of residential research at JLL, said that there could be 11pc fewer properties sold this year.

The situation is particularly delicate in London, where 28pc of properties were discounted, according to Propcision, an analytics firm.

James Sims, director at Brik Estate Agents in Fulham said: “The sales market in Fulham is currently very price sensitive. We’re noticing that reducing properties by even a marginal 2-3pc can make a significant difference to the level of interest from potential buyers.”

http://www.telegraph.co.uk/property/house-prices/asking-price-growth-slows-lowest-rate-almost-four-years-housing/

Santander tells landlords to raise rents by ‘as much as can be reasonably achieved’

By Marc Da Silva

Santander is getting rid of a controversial clause in its buy-to-let mortgage contracts requesting that landlords raise rents by “as much as can be reasonably achieved” whenever possible.

The wording, which was exposed by Mortgage Strategy last month, after the publication was contacted by a private landlord who had spotted the clause in her mortgage contract, has been buried in Santander’s contracts for almost six years.

The landlord said: “The public views landlords as greedy, but how many people are aware that landlords are being forced to increase rents by banks such as Santander?

“The Santander contract states that when rents are up for renewal the landlord must get written advice from a qualified valuer [as to] whether the market rent at the date of the review is likely to be higher than the rent currently payable.”

The clause had been slammed by industry figures.

Ray Boulger, senior technical director at John Charcol, commented: “This doesn’t square very well with the best interests of consumers.”

Lucy Hodge, managing director at Vantage Finance, described Santander’s clause as “excessive and disproportionate”, insisting that she could not see “any sense in it whatsoever”.


A spokesperson for Santander last week said that the policy was under review, but after insisting that “it is for the landlord to set a rent that both they and the tenant agree upon”, it would seem that the bank has dropped the clause now that it is aware “that it can be misunderstood”.

https://www.landlordtoday.co.uk/breaking-news/2017/2/santander-tells-landlords-to-raise-rents-by-as-much-as-can-be-reasonably-achieved

Trade group backs banning orders on rogue agents, landlords

By Graham Norwood

A trade body has backed government plans to introduce so-called ‘banning orders’ for rogue letting agents and landlords, but it says the new rules must be applied appropriately.

In its submission to the formal government consultation on the proposals, the Residential Landlords’ Association says councils must commit to have resources and enthusiasm to enforce the new rules.

The RLA is also asking that those landlords who find themselves subject to an order or included on the ‘rogue’ landlord database through a mistake that was unintentional, should have a formal route to be released from an order and from being listed on the database where appropriate.

It also wants believe provisions for landlords who demonstrate remorse and undertake appropriate education or training.


The RLA is also worried that genuinely well-intentioned landlords who simply miss or misinterpret one specific piece of legislation should not necessarily receive a banning order.

The association proposes that banned landlords have their properties made subject to selective licensing under the Housing Act 2004 with a presumption that the banned landlord cannot be a licence holder.

“This would work as an alternative to local authority management orders that are already very rarely taken up by local authorities due to limits on time and resources” says the RLA.

“We hope that the process of banning orders and the ‘rogue’ database will be used in the spirit it is intended to root out criminal landlords operating in the private rental sector. It is important that local authorities retain the confidence of the majority of compliant landlords by using the civil penalty regime sensibly” the organisation concludes.

https://www.lettingagenttoday.co.uk/breaking-news/2017/2/trade-group-backs-banning-orders-on-rogue-agents-landlords

What opportunities and challenges lie ahead for BTL landlords this year?

By Karen Bennett

We all know that buy-to-let investors face a challenging time, but what are the key issues affecting landlords? Karen Bennett looks at some of the opportunities and challenges you’ll face in the coming months.












New Prudential Regulation Authority (PRA) requirements

The new guidelines already in effect require lenders to adopt minimum interest rate stresses, and interest cover ratio levels when assessing affordability. This moves the buy-to-let (BTL) market more towards the residential mortgage market where similar stress rate and affordability limits exist. Lenders have therefore made changes to their approach and ultimately it is likely that investors will see lower levels of funding available to them and the need for higher deposits on purchases.

One of the key differences now is that coverage ratios are higher for individuals than limited company borrowers, reflecting the additional costs an individual will be incurring as mortgage interest tax relief becomes limited. In addition, longer term fixed rate products will not carry the same stress rates and therefore these products may provide different levels of funding when compared to variable rate products.

From September this year, a further distinction between investors and portfolio landlords is drawn, with the cut-off point struck at ownership of four properties. Those in the latter group will require a specialist underwrite with greater attention paid to experience and financials of the overall portfolio and underlying business. This is likely to limit larger landlords’ access to some of the keener priced retail BTL products.

These regulations were implemented to tighten underwriting standards and ensure investors were not too highly geared. The regulator is concerned about the impact landlords and BTL can have on overall property price volatility. There was some evidence of more aggressive lending returning to the BTL space, and it has grown rapidly during 2015 and 2016 in contrast to the wider residential housing market.

Implications of enhanced underwriting criteria

Lenders are always required to adopt responsible lending practices and need to consider the affordability of their loans to their borrowers. The changes to mortgage interest tax relief has reduced the net cash flow of a mortgaged investment property, and therefore needs to be reflected in the underwriting approach.

However, this is a complex area as tax information can be historic and is highly likely to change in the future, prompting lenders to look at ways to manage this risk and ensure good outcomes for their customers. Most are adopting higher interest coverage ratios to account for this tax change.

Considerations for a limited company structure

In truth, a limited company structure offers advantages and disadvantages to landlords. Whilst interest is fully allowable, investors need to consider the impact of property disposals in a company (effective tax higher once profits are distributed). For many investors, long term estate planning is most important and for them a company structure offers more options for effective planning.

The point is there are many considerations and operating through a limited company will involve more costs (finance costs and associated fees generally higher), together with higher levels of administration.

Ultimately, it is vital landlords take specialist advice considering all the implications, rather than defaulting to thinking a limited company is an easy or appropriate solution. There is evidence that many landlords are increasingly looking to mitigate the additional costs through rental increases rather than choosing corporate structures.

Refinancing on a like-for-like basis

Re-mortgages without additional capital being raised (excluding fees) are excluded from the underwriting standards. However, the changes to interest tax relief affect many unincorporated landlords and will have historical debt levels that would make the investment ‘loss-making’. Lenders will be unwilling to take on such customers and question the responsibility of doing so if that level of debt is not sustainable for the borrower. These customers are also likely to then fall onto higher reversion rates which will amplify the impact on their cash flow. It is hugely important that landlords spend time working out the impact this has, as well as using this time to take action.

Many have options which include a review of rental levels, selling property to reduce debt, reducing other costs (self-managing), or setting aside other income they have to cover any shortfall.

The Greater London and South East market

London and the South-East will always hold strong investment appeal. Yields are somewhat lower and the stamp duty changes announced in April 2016 will have made some properties seem unaffordable, but with an influx of foreign investment, capital growth is likely to remain. This may not be at the same level as historically, but the stability in the market may attract people looking for growth opportunities.

If investors are looking for cash flow over longer term capital gains, then the higher yielding properties in more regional areas - particularly further North - may be more of a focus.

Southern hotspots remain and regions such as Southend-on-Sea are attracting more investment with strong yields at circa 7%, good capital growth and an improving infrastructure, all within 40 minutes of London.

How well-capitalised investors need to be in the future

Highly leveraged investors are most exposed and will feel the impact of the tax relief changes acutely. Those that have grown in a sustainable way, sacrificing pace of growth for less debt, will undoubtedly be better positioned to take advantage of the changing market conditions.

We are entering into a phase of lower gearing for investors, however the fundamentals of BTL remain compelling.


Yields relative to other assets are attractive, it offers long term capital gain potential, and the supply / demand imbalance of the UK housing market and its population growth all support tenant demand. Landlords just need to adjust and accept higher deposits and potentially slower growth. Unfortunately human nature will always see some driven by greed, risking their whole portfolio by gearing to the max.

Advice to landlords who are highly leveraged on their properties moving into 2017

Most importantly understand the impact of the tax changes to your net cash flow. It is important to have a good team around you providing the right advice to ensure you reach a positive outcome. Tax advice and a professional mortgage broker would be the first numbers to call in order to build this.

Take action – whether that be through deciding to deleverage through some sales or consider rental levels and review your other costs to see if there are savings to be had. Reviewing your existing financing costs can often be a good idea as pricing in the market has improved materially during the last few years.

What to consider during the application process

There are some pitfalls but much of any BTL underwrite - particularly on the specialist side - just needs to be viewed with common sense.

Simply put, one of the main questions a lender will ask is; 'can the customer afford the loan, and can they prove it?' Everything else should play a supporting role within a strong risk framework that protects both lender and borrower.

Shawbrook has always encouraged a long term, sustainable and sensible approach to lending, and one of the reasons we have managed to achieve this is through our tightly managed panel of professional mortgage brokers whose value cannot be understated.

Other helpful tips include the quality of your properties (remember the valuer will inspect and the lender will make assumptions based upon the quality of the property), as well ensuring you adhere to any and all licensing requirements. Avoiding minor credit oversights is also important as is your digital footprint, which is something most lenders will review.

https://www.landlordtoday.co.uk/breaking-news/2017/2/what-opportunities-and-challenges-lie-ahead-for-btl-landlords-this-year

House price rises across England outpace London for the first time since the 2008 financial crisis

By Lizzie Rivera

New figures show house prices have risen more across England than in London, where some boroughs recorded stagnant - or falling - property prices in the second half of 2016.

House prices across England are rising at a faster pace than in London, according to the latest ONS and Land Registry figures.

The impacts of April's stamp duty changes and June's Brexit vote were felt most keenly in London, which suffered pockets of stagnant - or falling - price growth during the second half of 2016.

Traditionally, house prices have risen at a significantly faster pace in London than in the rest of Britain. However, 2016 ended with the average UK house price rising by 7.7 per cent to £236,000, compared to 7.5 per cent in London.

Despite slightly lower growth, the average cost of buying a home in London is still more than double the nationwide average, at £483,000.

London's top-performing boroughs
“The rate of property price growth has been softening, with the capital underperforming the national average for the first time since the financial crisis of 2008," says Rob Weaver, Property Partner's director of investments.

“While prime central London has hit something of a wall, outer London boroughs are still recording double-digit price growth."

Eight of London's 33 boroughs have had price growth of more than 10 per cent in the past 12 months, with the biggest increases in the capital's most affordable borough, Barking and Dagenham. Annual growth of 14.1 per cent has taken average prices to £289,000 in this east London regeneration zone.

Unsurprisingly, the other areas recording the strongest growth are also some of the most affordable, including the neighbouring east and south-east London boroughs of Havering, Bexley and Newham, where prices average around £350,000.

This highlights the main issue of London's housing crisis - a lack of affordable homes - as underlined in the Government's Housing White Paper, released last week.

“While good news for existing homeowners, this further rise in property prices – at four times the rate of consumer price inflation and more than double average earnings growth – will take home ownership even further out of reach for Generation Rent," warns Richard Snook, senior economist at PwC.

House price forecast for 2017
Since 1996, the main driver of property price growth has been the shortage of suitable homes being built to meet the demands of a growing population. Now, modest pay increases are not keeping up with the rising cost of living, making it extremely difficult for first-time buyers to get on to the property ladder.

"If it becomes impossible to buy, sellers will also take a hit on the price of their home due to a drop in demand," says Rightmove director Miles Shipside.

Snook adds: “The good news for prospective buyers is that we do expect a gradual slowdown in house price inflation in 2017, with our scenarios ranging from between two and six per cent growth."

http://www.homesandproperty.co.uk/property-news/house-prices-across-england-are-rising-faster-than-in-london-for-the-first-time-since-the-2008-a108091.html

London landlords more likely to use letting agents than rest of UK

By Marc Shoffman

https://www.urbanpixxels.com/colourful_houses/

Landlords in London are more likely to use a letting agent than in the rest of the country, lenders say.

A survey of landlords by the Council of Mortgage Lenders found that 70% of London landlords employ an agent in some capacity, with about 40% of these contracting the agent to manage all aspects of the business, including finding a tenant, collecting rent and maintaining the property.

Outside the capital, this falls to only 60% using an agent, although about two-thirds of these opt for full management through the agency.

Despite several surveys pointing to an increase in landlords incorporating ahead of the mortgage tax changes, only 6.2% of landlords in the capital said they used a company structure. This fell to 2.8% outside London.

Three-quarters of London landlords said they don’t plan to change the number of units in their portfolio size over the next five years.

However, of those who do plan to change the size of their portfolio, 13% of London landlords were more likely to plan to buy, compared with 9% who said they would sell.

Outside London, 8% plan to expand their portfolio, while 15% hope to reduce it.

Most London landlords (79%) own flats to let, while 47% have houses. In the rest of the country, just 40% of landlords rent flats, while 84% rent houses.


Some 60% of those in London own a single property, while a further 20% own two properties – mirroring the distribution in the rest of the UK. Likewise, about 10% of landlords in London own five or more properties, similar to the rest of the UK.

http://www.propertyindustryeye.com/london-landlords-more-likely-to-use-lettings-agents-than-rest-of-uk/

Reports criticise UK Right to Rent checks one year after they were introduced

Foreigners and British citizens without passports, particularly those from ethnic minorities, are being discriminated against in the private rental housing market, a new report has found.

It claims that since landlords and letting agents were required a year ago in England to check that a new tenant has the right to live in the UK under a pilot scheme that is due to go nationwide, there is no evidence that it is working.

A second, separate report suggests that the Government is largely unaware of the impact of the pilot scheme and whether the checks are indeed being done regularly or if some agents and landlords are ignoring it completely.

The checks are part of a wider policy to deter illegal immigrants and landlords and agents who fail to fully comply with the rules face a fine of up to £3,000 or up to five years in jail.

The first report from the Joint Council for the Welfare of Immigrants (JCWI) found that 51% of landlords surveyed said that the scheme would make them less likely to consider letting to foreign nationals.

It also found that 42% of landlords stated that they were less likely to rent to someone without a British passport as a result of the scheme. This rose to 48% when explicitly asked to consider the impact of the criminal sanction.

An enquiry from a British Black Minority Ethnic tenant without a passport was ignored or turned down by 58% of landlords, in a mystery shopping exercise and the report suggests that the Government is failing to adequately monitor the scheme to measure whether or not it is working as intended, or whether it is causing discrimination.

It also says that it believes that enforcement under the scheme is low and there is no evidence to suggest that the scheme is encouraging irregular migrants to leave the UK and that it creates structural incentives for landlords to discriminate unlawfully against foreigners and ethnic minorities.

One prospective tenant from Brighton, Kirby Costa Campos who is a US citizen married to an European Union national described the process as awful. ‘Two days before we were supposed to move in, we get an email from the rental agency saying we’re not going to release the keys to you, you’ve lost your deposit with us, because you’re not legal in this country. It was awful. I was crying for that entire 24 hour period. I mean, I have a six year old. My child was going to be on the street,’ Campos explained.

Landlords have also hit out at the legislation as being unworkable. ‘How can we, as landlords, ever know really if someone has got the right to rent. Why should we be working as immigration officers when actually we haven’t got a clue and we certainly don’t have any information, or any training,’ said Clare Higson, a member of the Eastern Landlords Association.

‘I feel I have absolutely no way at all of telling whether or not someone has got legitimate immigration papers, how would I recognise a false passport or travel document,’ she added.
The Residential Landlords Association (RLA), said it shares the concerns outlined in the JCWI’s report. ‘The Government’s own figures show the Right to Rent scheme is not working so maybe it is time to scrap it and think again. With the threat of a jail sentence hanging over landlords if they get it wrong it is hardly surprising that they are being cautious,’ said RLA chairman Alan Ward.

‘There are more than 400 acceptable documents proving right to rent from within the EU alone and landlords are making risk-based decisions and only accepting documents that they recognise and have confidence in,’ he added.

Saira Grant, JCWI chief executive believes that landlords are being put in an impossible position. ‘The Right to Rent scheme is failing on all fronts. It treats many groups who need housing unfairly, it is clearly discriminatory, it is putting landlords in an impossible position, and there is no evidence that it is doing anything to tackle irregular immigration,’ she pointed out.

‘Creating a so called hostile environment that targets vulnerable men, women and children is bad enough, implementing a scheme that traps and discriminates against British citizens is absurd. Expanding the scheme to devolved nations without taking into account the discrimination it causes would be misguided and unjustifiable. It is time to stop the scheme before it does any more damage,’ she added.

Meanwhile, according to John Perry, a senior policy adviser at the Chartered Institute of Housing, the Government should rethink the scheme before rolling it out to Scotland, Wales and Northern Ireland as no one know if it is working or not.

‘The Home Office has admitted it cannot monitor the scheme and it’s a fair bet given the limited publicity that at least a proportion of England’s 1.8 million private landlords are still completely unaware of it,’ he said.

He revealed that organisations that the CIH works with, such as housing advice agencies and migrant advisory bodies, say it’s now harder for legal migrants to rent such as refugees and British people can also be affected if they have no passport or other accepted proof of UK residence.

‘It’s time for the Government to seriously reconsider the impact of right to rent on vulnerable tenants and would-be tenants before it is rolled out to Scotland, Wales and Northern Ireland. It’s simply not good enough to claim that the scheme has a deterrent effect when the proven benefits are so limited and there are regular reports of the damage being caused,’ said Perry.

Figures from the Home Office show that since the pilot was introduced a year ago some 91 landlords have been issued with civil penalties and fined a total of almost £30,000, with 667 enquiries made to the Home Office’s checking services.

http://www.propertywire.com/news/uk/reports-criticise-uk-right-rent-checks-one-year-introduced/

First-time buyers defy the doubters to drive house prices higher

By Tim Wallace

First-time buyers are buoying the housing market with enthusiastic purchases CREDIT: PHOTOLIBRARY.COM

First-time buyers borrowed more money than ever before to get on the housing ladder last year, defying fears of a slowdown to boost the market further, according to industry figures.

A record £53.6bn of mortgage loans went to new property owners in the year, a rise of 13.5pc compared with 2015 and the highest level since the Council of Mortgage Lenders’ (CML) data began in 2006.


December’s borrowing of £4.8bn was also a record month for first-time buyers, helping propel the market to new heights.

House prices picked up again in December, the Office for National Statistics said, growing by 7.2pc in 2016.

The average property now costs £220,000, up £3,000 compared to the previous month and up £15,000 year on year.

Figures for January from Nationwide and Halifax both indicate some slowing in the market in the new year, but the full-year ONS numbers indicate a degree of resilience in a sector that had been battered by tax changes and the Brexit referendum last year. Prices had briefly dipped from July to October before resuming an upward trend.

Some parts of the market are growing more slowly.

Although first-time buyer numbers are surging, the pace of growth by home-movers is more modest.

Those who were moving house borrowed £74.2bn last year, up only 2.2pc on the year, the CML said.

Those figures do flatter the state of the market, however. The value of lending is up in a large part because property prices are rising rapidly.

By volume, the number of home sales only increased very slowly.


A total of 801,600 properties changed hands with a mortgage in 2016, up by less than half of one per cent from 798,100 in 2015, according to the CML.

First-time buyer numbers increased by 8.4pc to 339,100. But the number of home-movers dropped by 2pc to 360,400.

The number of buy-to-let investors also dropped by 13.2pc to 102,100 for the year, hit by changes on stamp duty on second homes.

Remortgaging was a different story with 385,000 owners changing to a different mortgage - the largest number since 2009 - rolling over £66.3bn of debts.

Analysts expect house prices to keep on rising.

“These figures highlight the supply and demand gap, which continues to support runaway house price inflation. For as long as demand outstrips supply, this trend will continue,” said Jeremy Duncombe from brokerage the L&G Mortgage Club.

“The government’s recent Housing White Paper has promised some solutions, including help for smaller developers, but it still feels evolutionary not revolutionary. The topics of stamp duty, planning and the green belt may need to be looked at again if we really want to fix our broken housing market.”

http://www.telegraph.co.uk/business/2017/02/14/first-time-buyers-defy-doubters-drive-house-prices-higher/

New evidence of buy to let mortgages at record low costs

By Graham Norwood

A second firm is suggesting that the cost of Buy To Let mortgages has fallen to a record low - but warns that further reductions are looking unlikely.

Last week we reported that Mortgages for Business was suggesting the average pricing of two- and three-year fixed rates hit all time lows of 2.92 per cent and 3.76 per cent respectively.

Now Mortgage Brain, a technology firm supporting lenders and others in the mortgage indusatry, says the cost of an 80 per cent Loan To Value two year fixed mortgage is now 18 per cent lower than it was at the start of 2014 and 11 per cent lower than it was a year ago.

Similarly, the lowest rate three year Fixed buy to let mortgage with an 80 per cent LTV (at 3.39 per cent) is some 16 per cent lower than it was three years ago and 10 per cent lower than last year.


The firm also says the cost of a longer term 60 per cent LTV five year xixed buy to let mortgage is now 15 per cent lower than it was in 2014; its 70 and 80 per cent LTV counterparts are 14 and 11 per cent lower respectively.

“Like our recent residential mortgage product analysis the Buy To Let sector looks like it could be levelling out and moving away from the long period of  historic lows in terms of costs and rates” says a Mortgage Brain spokesman.

“Buy To Let investors can still take advantage of some good savings and low rates when compared to this time last year, however, the mixed and marginal movement in costs over the past three months could be seen as a further sign of stability, or even the start of a period of rises” he adds.

https://www.lettingagenttoday.co.uk/breaking-news/2017/2/new-evidence-of-buy-to-let-mortgages-at-record-low-costs

Are you a landlord, first-time buyer, renter or would-be downsizer? How the Government's Housing White Paper plans will affect you

By Sarah Davidson and Myra Butterworth 

The Government has finally unveiled its plans to fix the 'broken housing market' in a white paper spanning 104 pages. 

Among lengthy reiterations of existing housing policy schemes including Help to Buy were proposals to stop developers land banking, try to speed up planning approvals and support the delivery of more homes to rent.

But some experts have already dubbed the plans a 'damp squib' with little hope of fixing anything. 

Secretary of State Sajid Javid presented the Housing White Paper in Westminster today

Secretary of State Sajid Javid told the BBC Radio 4 Today programme before revealing the bill: 'People want a decent home to buy or a decent home to rent, it's a choice for them, we should be helping both types of tenancies.'

But Shadow Secretary of State for Housing John Healey called the paper 'feeble' and added: 'We were promised a white paper; we’ve got a white flag.'

He was not alone in his disappointment. Simon Gerrard, past president of the National Association of Estate Agents, summed up how most pundits in the industry felt about this long-awaited paper.

'Today’s announcement shows that the Government is good at producing soundbites, but not realistic solutions. It demonstrates a lack of understanding of the market and what is required to fix it. 

'The schemes outlined will be discussed and debated for longer than they are implemented, with nothing new being offered. We need to simplify the system and make it easier to build homes that people want, quickly, and I am disappointed this has not yet been achieved.'

So what has the Government proposed in the paper?

Cutting red tape on planning 

The Government wants to build the 'right homes in the right places'. To do that, they've told local authorities in England (where they have jurisdiction to control housing policy - Scotland, Wales, London and Northern Ireland have their own) to come up with a plan by April 2018. 

These plans will have to be based on meeting local demand for housing - including making sure that enough houses are built for older people and disabled people.

Then local authorities will have to stick to the plan and meet their target number of homes every year - unless, they don't. In which case, the Government will get involved and ask them why they haven't.

Jonathan Manns, head of regeneration and director of planning at Colliers International, said: 'Dig into the (*cough*) detail and, beyond the hollow and misguiding rhetoric, there are odd tweaks to the status quo. 

'Councils, we’re told, should continue to review the targets in their local plans and ensure they’re up-to-date. Hardly ground-breaking but reassuringly familiar.'

The Government is also proposing to cut the time local authorities have to approve planning applications from three years to two.

Will it help? Gerrard doesn't think so: 'The introduction of capping the time between obtaining planning permission and starting construction to two years is misguided. It is not the timescale that hinders building across the UK, but the planning system itself.

'All too often, permission is granted that is simply impossible to implement because local government departments do not communicate effectively with each other.'

What would he do instead? 'The Government should instead focus on encouraging more land to come to market through a capital gains tax moratorium.'

Government wants to move away from relying on traditional building methods

Encouraging smaller builders

Government analysis suggests that nearly 60 per cent of all new homes are built by just 10 big builders. They want to change this by encouraging smaller developers who they hope will use modern methods of construction to speed up how quickly homes are built. 

The Government also wants 'higher density' building in the form of high rise flats, mansion blocks and lots more homes in areas around transport links. 

To do this, they're offering local authorities a carrot: up to 20 per cent more money if they commit to spending it on planning departments.  

Brian Berry, chief executive of the Federation of Master Builders, said: 'This is one of the biggest game changers to come from today’s 100-page Housing White Paper. If this can be shown to deliver real improvements in planning, then it would make a good case for further increases along the lines the white paper suggests.'

There is some question around whether lenders are prepared to offer mortgages on homes built in new and non-traditional ways. The Government claims to be expecting lenders to get on with it though.  

From Nimby to Yimby

Housing targets were abandoned under David Cameron

After a serious backlash from Tory MPs emerged last month over rumoured proposals to build on the green belt, if the Housing White Paper had contained plans to this effect, they were ditched before publication.

The Government instead affirmed its commitment not to build on green belt land, and promised to discourage builders from land banking as well as confirming it would release more publicly owned brownfield land for development.

Part of its plans to stop firms land banking - where land is bought but not developed for years as house prices and land values rise - include the proposal that personal ownership details will be made publicly available on the Land Registry. 

This would allow those sitting on empty homes and undeveloped land to be named and shamed. 

Housing targets, abandoned under David Cameron, will also be reinstated from next year with local authorities responsible for setting these.

Not everyone was impressed by this promise however. Russell Gardner, head of real estate at Ernst & Young, said: 'Despite raised hopes of truly radical reform, today’s white paper represents a timid response to a universally recognised housing crisis. Housing targets may appear admirable but it is vital that the necessary reforms and mechanisms are put in place to allow those targets to become a reality.'

What does the white paper mean for you? 

I want to downsize

After all the front pages screaming about incentives for older home owners to downsize yesterday, the word downsize didn't appear once in the white paper. In fact no mention was made about the potential that cutting stamp duty or providing other incentives for last-time movers could have on freeing up family homes.

The word downsize didn't appear once in the white paper despite rumours there would be incentives for those looking to move

The Government acknowledged the 'many barriers to people moving out of family homes that they may have lived in for decades' and then said they were 'committed to exploring these issues further and finding sustainable solutions to any problems that come to light'. They're not sure how yet.
Slightly more tangible support for older home owners instead came in the form of encouragement for builders to build homes appropriate for older people.

The International Longevity Centre has published research suggesting that there could be a retirement housing gap of 160,000 retirement homes by 2030. If current trends continue, the gap could grow to 376,000 homes by 2050.

Baroness Sally Greengross, chief executive of the ILC, said: 'Local authorities must have a duty to assess the needs of their older population when making housing plans, and ensure that these needs are met before plans are put in place.'

But Trevor Clark, of financial planning firm Rutherford Wilkinson, called the paper 'a damp squib for the older generation'.

He added: 'The white paper did say that custom built houses are to be encouraged and the Government noted its support for sheltered, step down and extra care housing, which offers older people more confidence to move into a new home where their needs will be met.'

Stamp duty is a barrier to buyers: Yorkshire Building Society thinks stamp duty should be paid by sellers to help people climb the housing ladder

I want to buy my first home

There wasn't a lot new for first-time buyers in the white paper - the Government just reiterated what it's already doing for them in the shape of Help to Buy equity loans, Isas, shared ownership and Rent to Buy schemes. 

'The Government will help people save for a deposit, buy with a smaller deposit, buy at 20 per cent below the market price, buy the home they are renting from a social landlord, buy a share of a home or save a deposit while paying a below market rent. We will also target more investment into homes for Affordable Rent,' said the white paper. 

It did give a little bit more detail on Starter Homes for the first time though. This scheme is designed to let first-time buyers with an income of less than £80,000 (£90,000 for London) buy a new-build home with a 20 per cent discount on the price.

The new details included confirmation that these homes will have to be bought with a mortgage to avoid cash buyers speculating for profit and there will also be a 15 year repayment period for a starter home - so when the property is sold on to a new owner within this period, some or all of the discount is repaid.

Andrew McPhillips, chief economist at Yorkshire Building Society,said: 'Financial obstacles are a real difficulty faced by first-time buyers and those moving up the property ladder. We hope Government outlines further policy proposals in the forthcoming Budget, such as considering making stamp duty a seller’s tax rather than a buyer’s tax, that have an immediate impact and long-term benefits.'

I’m a renter

More than four million households rent their home from a private landlord, nearly twice as many as 10 years ago, according to the housing white paper.

Some of these households have to put up with below standard accommodation, but things are improving the Government suggests.

It claims 28 per cent of homes are ‘non-decent’, compared to 37 per cent in 2010.

But the real issues for tenants, it argues, focus on affordability and security.

The white paper highlighted how an average couple who are tenants 'send roughly half their salary' to their landlord each month, making it 'nigh on impossible' for them to save for a deposit to buy their own property.

It said building more homes will help with affordability, but renters often face upfront costs including fees charged by letting agents.

The Government has already announced in the Budget that it would ban letting agent fees to tenants, and the white paper has gone further saying it will look to bring forward that legislation.

Former Chancellor George Osborne announced tough new tax treatment of landlords which don't look likely to be reversed

I’m a landlord

Landlords have been on the Government’s radar for several years and there appears to be no let-up in the white paper.

Already having to contend with tax relief reductions and stamp duty rises, landlords may soon have to add extra layers of red tape to their list of woes. For the Government is considering mandatory electrical checks for rented properties and client money protection for letting agents.

James Davis, chief executive of online lettings agency Upad, said: 'The Government’s continued clamp down on landlords is only going to emphasise the issue that there is too much demand to meet supply, as people live longer in rented accommodation.

'Buy-to-let landlords should be enticed through tax incentives, rather than hiking stamp duty, to bring the rental market back into equilibrium.'

Perhaps the most important aspect of the white paper for landlords, however, is the Government’s desire to make tenancies ‘more family-friendly’ by introducing longer-term tenancies.

While some landlords may appreciate the security of knowing that they have guaranteed rental incomes for longer, it also introduces a potentially limiting layer of inflexibility for landlords.

At this stage, the white paper suggested longer term tenancies could be applied only among homes delivered by housing associations and institutional investors.

It said: 'The predominant use of six and 12 month contracts mean that families who are renting need to move home before they had planned to, which can mean children moving school, alongside the uncertainty and costs associated with taking on a new rental property.

'We are working […] to encourage longer-term tenancies in private rental homes delivered by housing associations and institutional investors. We will be speaking to the Local Government Housing Association about local authorities’ appetite to do the same, where they are delivering market private rented housing through local housing companies.'

It added: 'Further to this we will consider what more we can do to support families already renting privately, while encouraging continued investment in the sector.'

Patrick Littlemore, director of lettings at Marsh & Parsons, said: 'Extra protections and safeguards are welcome news for renters, especially those who’ve experienced dishonest landlords, but it is important to note this works both ways.

'Legitimate landlords must also have protection against rogue tenants, retaining the right to lawfully evict and any restrictions on this could spell disaster. Three-year family tenancy agreements are a good move to provide greater security and stability for renters that want it, so long as the tenant abides by the Housing Act.

'The Government should make sure that measures announced do not dent enthusiasm in the private rental sector among landlords. The buy-to-let sector took a substantial hit with the increase of stamp duty in April last year and additional burdens could make this unattractive, reducing investment and the supply of stock in the much needed private rental sector. 

'Greater stock levels are required to meet the ever-growing demand we’re witnessing and discouraging investment would have huge ramifications for the many young professionals that rely on renting.

'Renting gets a bad name but in reality, many appreciate the flexibility, freedom and choice that comes with it.'

The Government will act to 'promote fairness and transparency' for the growing number of leasehold property owners in England

I’m a leaseholder

The Government also announced in the white paper that it will act to promote fairness and transparency for the growing number of leaseholders, claiming there are currently around four million leasehold homes in England.

It said: 'Leasehold has been a traditional part of the housing market in this country but there are areas where urgent reform may be needed, particularly when buying a house on a leasehold basis. New leasehold houses can be marketed at a reduced price compared to freehold. 

'But some purchasers are not aware at the point of sale that the associated costs of buying a new leasehold house can make it more expensive in the long run. Some freeholds and ground rents of leasehold houses are sold on and traded, with leaseholders left in the dark, and facing increasing and onerous payments. This is not in consumers’ best interests.'

It added: 'In particular, ground rents with short review periods and the potential to increase significantly throughout the lease period may not be offering a fair deal. We are absolutely determined to address this.'

Paula Higgins, chief executive of HomeOwners Alliance, said: 'The focus on leasehold houses is not before time, but we also need to turn our attention to those who have bought them already. 

'Those who were encouraged to purchase through the Help to Buy scheme and the latest wave of new homes, for example, find themselves caught in a leasehold trap - leaving them with the choice of shelling out thousands for their freehold, or living in homes which are unsaleable. 

'The entire system is broken and in desperate need of reform if we are to create a stable housing system that truly works for everyone.'

http://www.dailymail.co.uk/money/mortgageshome/article-4196264/How-Housing-White-Paper-plans-affect-you.html