Major landlord to scrap tenancy deposits

By Marc Da Silva

Rental operator Get Living has announced that it is to abolish tenancy deposits for new residents from July and return existing deposits collectively worth £3m to more than 3,000 existing tenants.

Get Living is behind the country’s largest single-site PRS scheme at the former London 2012 Athletes’ Village, now called East Village, E20, which features 1,439 homes, with a further 4,000 homes in the pipeline across the UK.

Deposits will be returned to all tenants on the condition that they meet various requirements, which include having passed referencing or possessing a guarantor and being up to date with their rental payments.

Neil Young, CEO of Get Living, said: “We know that the cost of living can be high so, as a responsible landlord with a long-term perspective, it is important for us to be able to identify and address areas where we can alleviate the burden on our residents.

“Scrapping security deposits as a pre-requirement and returning deposits to current residents is yet another step we are taking to show we are firmly on the side of renters.”

Young hopes that deposit-free renting “becomes the norm” to help make the PRS even more attractive for renters.


He added: “We have great relationships with our residents and, given they are taking such good care of our homes, why should we hold six weeks’ rent?”

https://www.landlordtoday.co.uk/breaking-news/2017/5/major-landlord-to-scrap-tenancy-deposits

Sales volumes hit four-year low, as regional transactions plummet by up to 26% in England

By Marc Shoffman

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Sales volumes declined across all regions of England at the start of the year, the latest official figures suggest.

Data for transactions in January – the latest month for which transactional data is available and revealed in the ONS and Land Registry House Price Index – show sales volumes down by up to a quarter across English regions.

The figures show that volumes fell by the most in London, down 26% year-on-year to 5,958, followed by the east of England and south-east which both saw 21% declines.

The north-east had the smallest drop, down just 8% on January 2016.

Overall, transactions fell 16.6% annually in January to 50,790 in England.

They were down 2% in Scotland to 6,239 and down 2.3% in Wales to 2,762.

Northern Ireland only provides quarterly data, but transactions were down 28.5% in the first three months of the year to 4,379.

Transactions across the UK were at 64,170 in January. This is down from 75,961 last year.

Of course this could all be clouded by last year’s Stamp Duty rush, but the numbers are also below a month before when sales volumes were at 82,351.

Even if you look further back to January 2015, the Land Registry recorded 71,703 transactions and 80,763 in January 2014.

You have to go back to January 2013 for when volumes were last lower for the month, at 52,550.

The data also shows that annual house price growth slowed to 4.1% in March, down from 5.6% in the year to February. Prices also fell 0.6% on a monthly basis to £215,848.

Commenting on the figures, Jonathan Hopper, managing director of Garrington Property Finders, said: “While the speed and severity of the fall in annual price growth – down to its lowest level for more than three years – will alarm some sellers, such national averages mask the wildly different conditions at opposite ends of the market.

“Properties in some regions continue to see double-digit price reductions, while at certain price points in the most in-demand areas, gazumping is back with a vengeance.

“Nevertheless the broader trend is undeniable. East Anglia’s gravity defying, double-digit rates of price inflation are a thing of the past and it has been forced to share its ‘fastest growing region’ crown with the east midlands.

“Even London finds itself in a position it is unaccustomed to – close to the bottom of the pile.

“The chronic shortage of supply is still propping up prices in many areas and mitigating the slowdown. But this snapshot of a slowing market – taken before the election announcement – confirms what many in the industry had feared. For the housing market, the snap election has come at just the wrong time – injecting an unwelcome dose of uncertainty into an already fragile market.


“Nevertheless the lull could be short-lived. If the election delivers a clear result that puts Brexit firmly back on track, the property market could receive a huge boost, freeing up more supply and with greater levels of clarity spurring discretionary buyers into action.”

http://www.propertyindustryeye.com/sales-volumes-hit-four-year-low-at-start-of-january-land-registry/

Article 50 led to remortgage market in the UK stalling, latest report suggests

A resurgent remortgage market in the UK has stalled with experts blaming the triggering of Article 50 in March which began the formal process of leaving the European Union.

The latest data shows that the value of remortgaging levelled off at £5.2 billion in March and accounted for 25% of the total lending market, down from 29% the previous month.

The figures from conveyancing service provider LMS also shows that more home borrowers are opting for fixed five year deals with 32% choosing such a product, a substantial rise from the 9% previously with a five year fixed rate.

Andy Knee, chief executive of LMS, believes Article 50 prompted the change and he also thinks that the general election in June and Brexit negotiations overall coupled with rising interest rates means that the remortgage market could experience some tricky months between now and the end of the year.

The report also suggests that with interest rates starting to creep up it is price and long term financial security that were the two main motives for remortgaging in March. Some 19% of home owners lowered repayments by remortgaging in March, while 84% lowered their mortgage rates through remortgaging.

The figures show that while five year fixed mortgage rose, variable mortgages decreased in popularity with just 7% fixing onto a variable mortgage, down from the 19% who previously had one.

However, for the first time since September 2016, the average mortgage rate increased. The average mortgage rate climbed to 2.13% in February from 2.06% in January, the highest increase since June 2012.

The report suggests that it is significant that the number of home owners expecting a rate fall has dropped for the sixth month in a row. In September 2016 some 9% of those polled by LMS expected rates to fall. By January, this had fallen to only 2% and now sits at just 1%. Remortgagors predict further interest rate rises with 46% expecting mortgage rates to rise again within a year.

Knee said it is encouraging that the number of people remortgaging rose year in year in March as this is the result of improved affordability. Remortgage repayments accounted for just 17.3% of income in February, down from 18.4% in February 2016.

http://www.propertywire.com/news/uk/article-50-led-remortgage-market-uk-stalling-latest-report-suggests/

The Perfect Business Opportunity for the Property Investor

by Sally Lawson | Mar 17, 2016 | Property Investors | 0 comments

If you are a property investor, you are probably experiencing a few things:

• Difficulty finding great property deals that stack up
• Never having enough free cash to buy the deals you want
• A property management headache building with all the properties you have bought that need managing

This is where running a letting agency could solve all of these issues AND be a great asset in its own right (Leverage FREE too) plus it’s a load more tax efficient.

A Letting agency builds healthy continuous on going management monthly income from the property management margins and for an established business in the Midlands this would be around 30k per month, every month (before you open the doors).

This is why letting agencies are reaching the highest levels we have ever seen in the industry at the moment, and why the big boys are buying agencies as fast as they can to build their residual income.

You also get to utilise other people’s time and property to build yourself a valuable asset, the true definition of a business.

We are all aware of the new breed of Gazelle type business that are experiencing never seen before growth right in front of our eyes right NOW, and these are not ASSET based companies, they are “SERVICE based” which means they have no limits, they can service everyone and just keep growing and growing, and they are.

Think of the following examples:

• Alibaba, the largest worldwide warehouse but owns no stock,
• Facebook, the largest content machine that creates no content
• Uber the largest taxi firm that owns no cabs…
• Rightmove owns no estate agency but valued at £95million

Slightly different but along the same lines, it’s like the gold mine rush in California in of 1855, where everyone rushed to pan for gold, because they wanted to make it rich, but quietly behind the scenes, it was the it was the suppliers of the buckets and spades that made all the money.

The problem is that relying on asset building alone as a business model is too restrictive because you either run out of leads of great properties to buy, you get short of cash to secure the ones you want, or in the end give up through lack of motivation.

Monetising other people’s assets

The difference with building a “serviced based” business is that you are monetising other people’s assets, which means there are no restrictions, you can keep growing indefinitely, no barriers, no Mortgage restrictions, the sky is the limit.

It’s no surprise that at the moment well run and systemised letting agencies are achieving 2x turnover when sold, which means if you build your business in 5 years, to a £750k turnover then your business would be worth up to. £1.5million if sold.

The real bonus is that unlike property, it would be cash, free of any debts or leverage in most cases, as well as much more favourable than property is, with entitlement for entrepreneurs relief for taxation purposes too (as opposed to capital gains tax).

Another real bonus for a property investor of running a letting agency is that you will get a never ending source of leads driven into your hands of people wanting to sell their properties, the continuous residual income to fund them and a property letting and management solution right under your nose for everything that you buy too.

The Truth is…

Which is why when I was asked last week on an interview, “What properties are you investing in right now?” and the truth is I’m not.

Now I confess I have been a very active property investor, I was buying 4 per month at one point for clients and myself, and at 27 years old, I owned over 2.7 million pounds worth of property assets and I personally had purchases for rental, refurb, holiday lets and re-sale on the go continuously throughout the 90’s and early 2000’s but not now, it doesn’t stack up for me.

You see I would prefer to buy property agency stock, I can buy 100 properties under management for around £100k and this will generate over 60k income every year, with no additional expenses, because I have the management team in place already… 60% return!

It’s a no brainer, but I accept this is not for everyone, but we handle enquiries regularly from people buying agencies that then need a “system” to put in place to handle them and of course we are happy to help, so it’s definitely catching on.

So to summarise, to build a gazelle type business, utilise other people assets, and other peoples time, which means the sky is the limit, this will release the cash you need and the opportunities to carry on investing in fixed assets with a letting and property management solution built in (if you still wish to invest in property that is)

http://www.propertyagentscircle.co.uk/the-perfect-business-opportunity-for-the-property-investor/