UK Mortgage & Property Related News
Average monthly rents in Great Britain have increased by £74 in the last year, as landlords continue to exit the market.
A new report shows that landlords are buying far fewer homes than before, resulting in tenants having less choice and facing higher costs.
Read on for more about what’s happening to rent prices, and how the new government plans to overhaul the rented sector.
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People aiming to profit from their property could be making a significant and costly error in how they calculate their income.
Real estate is often viewed as one of the most valuable investments, especially if you plan to rent out the property, but a common oversight can lead to a hefty cost in the future, as one expert has pointed out.
Former financial advisor Joe Saul-Sehy, speaking on the Afford Anything podcast with Paula Pant, warned that first-time buyers frequently misjudge their gross and net income from the property because they neglect to set aside an emergency fund for it.
He advised landlords to allocate some of their rental income for future maintenance, cautioning: “For people squeezing as much water out of that sponge as they can get, (they) might also be robbing that account, which is a mistake.”
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The market is witnessing a significant shift as a number of landlords exit due to increasing legislative pressures, tax liabilities and the removal of mortgage relief, says Antony Lark, joint CEO of estate agency and lettings group Spicerhaart.
Rents have begun to stabilise, despite the exodus of landlords from the sector and resistance over rent reductions, says Lark.
He explained: “We’re noticing that the level of landlords leaving is higher than anticipated – particularly among those who’ve retired, who need the money to meet rising living costs, or are helping children buy first homes, or who’ve concerns over inheritance tax.
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Falling property values and soaring rents make flats the most profitable option for landlords, according to new research.
The findings from Inventory Base show that flats currently offer the highest returns for BTL investors.
Despite a slight decrease in average flat prices, rental values for flats have surged by 9.3% annually, outpacing all other property types.
The property inventory specialist compared average yields across flats, terrace homes, semi-detached and detached properties.
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Thousands of landlords in England are facing increasing costs due to selective licensing schemes imposed by local councils, according to a Freedom of Information request.
The FOI request by insurer Direct Line revealed that landlords in areas which require a licence are being charged £700 on average to get one.
Councils in certain parts of England require landlords to get the selective licences in order to to rent out property, in the hope that this will improve standards and quality.
The schemes require landlords to meet certain standards of management and maintenance and are often accompanied with regular property checks.
A licence typically lasts for a maximum of five years once granted, but councils can opt to issue them for a shorter period.
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In a statement which appears to go against the trend of much of the lettings sector, Connells says it sees no sign of landlords quitting the buy to let sector.
This appears at odds with data from some organisations and agencies – including Hamptons, owned by Connells – which appear to show fewer landlords in the sector now than in recent years.
But the Connells Group – in its trading statement for the first half of 2024 – says rental supply ended June with 24% more properties available than at June 2023.
And it says that the company “saw no significant signs of landlords exiting the market” with some 77% of properties re-let at the end of their tenancies. That’s the same figure as last year.
The average tenancy length was 30.9 months, about 10% up on a year ago.
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Successive tax raids on buy-to-let investors have fuelled Britain’s rental crisis, the boss of Foxtons has said.
Guy Gittins, who heads up the London-focused estate agent, said private landlords have been driven away by a dearth of government incentives, which has reduced the number of available properties to rent.
The UK’s housing crisis has only worsened since the pandemic, he said, prompting the recent surge in rental costs.
According to Mr Gittins, the previous Conservative government “created an environment that was not attractive or profitable” for new landlords to enter the market.
He said: “It needs to be taken very seriously. We need anything that will encourage people back into the private rented sector.
“Ultimately, the UK needs tens of thousands, if not hundreds of thousands, of extra rental [homes] to manage the price growth and make sure it is tempered as much as possible in the medium term.”
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A rogue landlord who was also a letting agent in Essex has been banned from being a landlord for three years.
Ruhul Mohammed Shamsuddin is now prevented by law from letting houses, engaging in letting agency work or managing properties, and could face both imprisonment and a fine of up to £30,000 if he breaks the banning order, which applies to England only.
He is also prevented from being involved in any company that carries out any of the duties outlined above.
His banning order has been secured via a First Tier Tribunal Property Chamber after Shamsuddin was convicted last year of half a dozen offences in relation to a property at 12, Clifftown Road in Southend-on-Sea (main image) at Colchester Crown Court.
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Average buy-to-let (BTL) mortgage rates have fallen to the lowest levels since September 2022, but remain well above 5%.
While falling rates are good news for landlords, those due to remortgage will face higher repayments, and investors might still think twice before expanding their portfolios.
Here, Which? explains what’s happening to BTL rates and reveals the cheapest deals currently on the market.
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Landlords purchased just 10% of homes sold across Britain during the first half of this year – the lowest share for at least 15 years.
The figure comes from Hamptons which says the new low is a sharp contrast with the 16% recorded in 2015 – before tax and regulatory changes reduced the appeal of investment in buy to let.
More recently, high mortgage rates combined with political uncertainty and the threat of new rental regulations have weighed on the appetite for new investors to enter the market. The share of investor purchases has been gradually falling further over the course of 2024 so far, reaching a low of 9.7% in June.
Assuming current trends continue into the second half of the year, in number terms, there are likely to be 113,630 new buy to let purchases across Britain in 2024, 75,900 or 40% fewer than in 2015.
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