Movement in the Buy-to-Let Market
November 26th, 2009
David Whittaker, Managing Director of Mortgages for business has recently published an article that states,
“The Buy to Let mortgage market seemed to stagnate in the early summer this year. There has been a stalemate between lenders, all of whom were sitting on their hands and waiting for one of a lengthy list of things to happen, before they started to ease lending policy.
The general school of thought is that house prices needed to increase over a reasonably sustained period of time, and the outlook for the economy needs to look a bit brighter, before anyone is going to start increasing loan to values to above the current maximum of 75 per cent. The former has now happened (Nationwide index shows house prices were up 1.39 per cent in July) however the economy at large still has problems.
Other criteria remain unchanged. If the rent fits the calculation, if the client has a good clean credit history, and are looking to buy good quality single unit properties, then there will be a home for your purchase. HMOs, blocks of flats, mixed usage property and Limited Company borrowing is now sitting firmly under the Commercial lending section but there are solutions now via Aldermore Bank of which we are pleased to be a select broker partner.
Pricing is a bone of contention when we speak to customers – lenders are seeking higher profit margins when they lend money. The lenders’ argument at the moment is predominantly threefold – cost of funds, lack of appetite to lend, and lack of competition. Put into plain terms, because it costs them more to buy the money in, they don’t have much appetite to lend money right now, and when they decide to lend, they will not necessarily choose to undercut all the other lenders to do so.
The big question asked is when are lenders going to drop their margins? I would suggest that without extensive pressure from the Government, this is unlikely to be until the Autumn, when lenders have new (higher) lending targets. The one thing I can tell you is that our conversations with lenders are extremely encouraging, and they are indicating an expectation to return to the market in more expansive fashion soon – but when is another matter.”
The End of the Stamp Duty Holiday
November 24th, 2009
The Daily Telegraph recently carried an article in which it stated that a coalition of 7 property groups, led by the National Association of Estate Agents and the Association of Residential Letting Agents were calling on the government to reform stamp duty as they claim it is distorting the housing market.
This follows the Royal Institution of Chartered Surveyors (RICS) report that stated the end of the stamp duty exemption on properties costing up to £175,000 could have a detrimental effect on the recovery in areas that were lagging behind the rest of the country. Surveyors in the West Midlands, the East Midlands, Wales and Scotland are expecting a drop in activity when the 1% threshold reverts back to properties sold over £125,000. The slump in sales will be mainly in the first time buyer market, which will have a favourable impact on the buy-to-let market as the young upwardly mobile now choose to rent rather than find a large deposit and stamp duty.
Surveyors in London and the South East have said the end of the stamp duty holiday will not impact on the market as the average house price in those areas are well above the £175,000 threshold, and in the North of England, where the average house price is £116,051 were also less concerned about the impact of the concession would have on activity.
Last week the Council of Mortgage Lenders calculated that 132,500 house purchases, funded with a mortgage had escaped stamp duty in the past year.
Simon Rubinsohn, chief economist at RICS. Has been quoted as saying “ At the time of its introduction, we did question how great an impact this policy would have and judging by the fact that only surveyors in certain parts of the country are particularly concerned about the ending of the holiday, it could be said that some areas of the UK hardly even noticed the change, however the additional transaction cost is still a worry to many, particularly first time buyers, and it is a threat to the market in areas of the country that are still seeing a weak price environment”.
Happy investing.
Landlords on the Increase
November 18th, 2009
It was reported by the online magazine Introducer today, www.introducertoday.co.uk that a survey of landlord activity has shown that the average investor has taken advantage of the downturn in the property market and purchased and extra property, taking the average portfolio from 11 properties to 12. In addition to this they expect to not only see a good income from their purchase but also an increase in the value of the property over the next 12 months.
The majority of landlords believe tenant demand will remain stable over the next 12 months with a third of those questioned believing there will be an increase. This is all good news for Happy Homes Investors as it seems there will never be a shortage of tenants for their properties.
Nigel Terrington, Paragon Group chief executive, said: “Landlords are reporting that tenant demand continues to be strong. This has been a recurrent theme throughout both 2008 and 2009 as people are either unwilling or unable to purchase property and decide to rent instead. It is unlikely that the mainstream mortgage market will recover for a number of years and vast sectors of the population, such as first-time buyers and people with impaired credit history, continue to be excluded from the market.”
Happy investing.
HHI Launches New Website
November 13th, 2009
Both Brett and I are delighted to welcome you to our brand new website. We’ve helped a large number of people to successfully build their own property portfolio. However, we want to help you do the same.
We know that if you’re the type of person who wants to see a much better return on investment, without all the time and stress that comes with investing in property, that you couldn’t make a better decision than coming on board with HHI.
We knew this before we created the site, but we needed to think of a way to prove it to you. We then decided that the best way to do this was to be as transparent as possible. After all, we have nothing to hide and we are very proud of the service that we provide.
This is when we decided to create the viewing tour so you could see exactly what we are all about and how we can help you. No other property investment company ( that we could find or know of ) has gone to such lengths to make sure you don’t miss out on building your property portfolio at the right time.
That time is now. If you have any questions ( no matter how big or small ), please don’t hesitate to get in touch. I will be happy to personally answer any questions that you may have at a time that is convenient for you.
To your success