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Two-thirds of parents would consider BTL to help student children

A majority of parents – 66% – asked by Trussle say they would consider buying a buy-to-let (BTL) near their offspring’s university to help with living costs.

The survey of 2,000 homeowners with children carried out by the broker also reveals that 53% of parents would considering downsizing to help with living costs.

Trussle collected data from Zoopla to show that Newcastle currently offers the highest amount of rental yield from a student property. With an average house price of £192,567 and average monthly rental income of £1,508, this equates to a yield of 9.40%.

And Southampton comes next, with the average house price at £235,911 and monthly income of £1,757 – an 8.94% yield.

“It’s true that BTLs aren’t the bargain that they once were,” says Trussle head of mortgages Miles Robinson.

Robinson mentions changes to tax and the stamp duty surcharge as reasons why BTL is no longer “the king of investments.”

He continues: “However, this new data shows that property is still seen as a safe and reliable way of generating extra income.

“This can be both in the short term, through rent collection and long term gains in house prices. In addition, the low interest climate means would-be landlords can lock-in a competitive BTL mortgage, which are typically interest-only.”

Original Article from Mortgage Strategy 10/11/21

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More buy to let and Build To Rent new-builds ‘will help developers recover’

Savills says an increase in the number of new builds bought for buy to let and other property investment will help developers recover from the demise of the Help To Buy scheme.

However, there may be a difficulty with the constriction industry being able to meet demand from investors and others.

Emily Williams, associate director of research at the agency, comments: “Despite the upcoming end of Help to Buy, there remains considerable appetite for new homes, and we expect delivery of affordable and private rental stock to expand to fill the gap left by Help to Buy.

“But the ability of developers and investors to build new homes is currently being limited by a lack of suitable consented land. There needs to be a continued effort to deliver more consents in high demand areas.”

Savills, in its latest housing market forecast, predicts that housebuilding volumes will not recover to pre-pandemic volumes until 2016 and even then delivery will be 60,000 below the government’s 300,000 homes per year target. 

Delivery peaked in 2019/20 at 220,000 homes and fell to 190,000 in 2020/21. Volumes are expected to sink to 180,000 in 2021/2 and only recover 2019/20 volumes in 2026.   

Starts slowed due to Covid but were already falling pre-pandemic, in part because housebuilders began to anticipate the end of Help to Buy, often shifting focus to smaller sites deliverable before the end of the scheme.  

Also, sites gaining permission have been skewed to lower demand markets, with supply highly constrained in high demand locations. Renewed government commitment to delivering more homes in the north of the country suggests this is unlikely to change, the agency suggests.

Savills says: “Build to Rent is the only part of the private housebuilding market we expect to be significantly bigger in 2025/26 compared to 2019/20.  

“Delivery rose from 7,000 to 14,000 between 2016/17 and 2019/20.  A further doubling would give us an expected 30,000 homes within five years, equivalent to 14 per cent of all new homes completed in 2025/6.  There may be opportunities for the sector to expand further, certainly tenant demand is not lacking.”

Original Article from Letting Agent Today 19/10/21

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Landlords still place most importance on getting the right tenant

The two most important things for buy-to-let property-owners are securing the right tenant and finding a good property manager.

This is according to new research from Hodge, which questioned landlords with a portfolio of under £5 million.

The research, which asked around 100 portfolio buy-to-let landlords and brokers for their views on the buy-to-let market, also found being able to re-let properties quickly was high up on landlords’ priority, with 37% saying it was a key concern.

53% of landlords said getting the right tenant in place is a top consideration, while 42% also identified finding a good property manager as being a concern.

Mike Clifford, head of commercial propositions at Hodge, said: “This research has highlighted to us as that no matter what challenges the market has thrown up over the last 18 months, the key concerns for landlord continue to centre around the base fundamentals of letting properties to good tenants and ongoing management.

“It is clear to us as a lender that we must work together with landlords and brokers to ensure that we continue to offer a service that simplifies the lending process and removes stress, rather than adding additional concerns.

“At Hodge, our specialist residential investment team work hard to provide a flexible service to both brokers and landlords. The complexities of managing multiple properties is hopefully eased somewhat for Hodge customers, as our portfolio buy-to-let mortgage allows landlords to manage their assets with one loan, providing them with the ability to remove and add properties – which we have found is something buy-to-let landlords are looking for from a lender.”

Original Article from Best Advice 12/10/21

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Flats still popular purchases, despite bad press during pandemic

Flats, so long the favourite of buy to let investors, still constitute 15 per cent of all homes purchased according to new research.

Months on, end of lockdown restrictions have led to the romanticized notion that the nation’s homebuyers are ditching city living and apartment properties for larger homes in the country.

However, Warwick Estates analysed transaction records from the Land Registry since the start of the pandemic and found that while this may be the case for a small proportion of buyers, flats are still accounting for a notable proportion of market activity.

Since January of last year, 974,153 residential transactions have been recorded across England and Wales. Some 150,668 of these have been for flats, accounting for 15 per cent of all market activity during the pandemic.

London and the South remain the homebuyer hotspots for flat purchases, with the capital seeing nearly 50,000 transactions so far this year – 47 per cent of all homes sold in the region.

In the South East, some 29,000 flats have been bought, 17 per cent of total transactions, with the South West seeing 16,194 flat purchases accounting for 15 per cent of all transactions.

The East of England (13 per cent), the North West and West Midlands (each 10 per cent) come next. 

The East Midlands is home to the lowest level of flats sold, with 4,527 equating to just five per cent of pandemic transactions.

“The idea that homebuyers are loading up the car and heading to the country for a new life is a nice one, but the reality is that those lucky enough to do so account for a very small proportion of the market” explains Bethan Griffiths, Warwick Estates chief operating officer. 

“Flats continue to play a pivotal role in the make-up of the property market, providing a preferable lifestyle option to many, as well as a more affordable route to homeownership. This is clear having accounted for 15 per cent of all pandemic property purchases and as we continue to return to normality we predict that flat purchases will increase further over the coming months.”

Original Article from Letting Agent Today 11/08/21

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Rent arrears fall to lowest level in a decade: Paragon

The number of tenants in rent arrears is at its lowest level for ten years, according to research by Paragon.

The buy-to-let lender found that in the second quarter of this year, landlords reported an average of 1.3 tenants in arrears.

It is down from 1.6 tenants per landlord in the first quarter and represents the lowest figure since 2011 when research agency BVA BDRC started tracking the metric.

Paragon says the average number of tenants in arrears per landlord has been falling consistently over the past year after it peaked at 2.1 in Q2 2020 when the pandemic hit.

In addition, the average amount of outstanding rent has reached a four-year low. 

After falling from £2,376 in Q1 2021 to £1,781 Q2, a reduction of £595, the average amount of rental payments owed to landlords is the lowest since the end of 2017 when it was £1,584.

The survey of over 750 landlords found that 36% have had a tenant request a change in rent, most commonly a payment holiday or a cut of up to 20%.

Paragon’s findings suggest that most requests were granted as 36% of landlords reported that they had agreed to some form of rent change.

Paragon director of mortgage sales Moray Hulme says: “It is really encouraging to see the average number of tenants in rent arrears at the lowest point for ten years and the amount of outstanding rent at the lowest since 2017.

“Our latest survey has also shown how landlords have been supporting tenants throughout the pandemic, granting requests to changes to rent in the vast majority of cases.

“These requests have been falling alongside the incidences and volume of rent arrears and considering that the fewest number of people are now on furlough since the scheme launched in March 2020, it is a good indicator that the economy is bouncing back well.”

Original Article from Mortgage Strategy 04/08/21

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Allowing pets may make buy to let more successful – claim

A respected buy to let mortgage monitor is suggesting that investors in the sector may be more successful if they allow pets.

The independent Moneyfacts service admits there are some disadvantages.

Landlords may have to take out additional insurance, although it says they can mitigate this by pet-proofing the home, such as removing rugs and expensive furniture from the property. 

“As well as this, landlords should keep in mind that tenants are normally obliged to return the property in the same state in which it was initially rented, as such tenants should pay for any damage their pet causes or the money can be removed from their deposit.”

However, it suggests that in hard-nosed financial terms, allowing pets may outweigh the disadvantages: it gives three ways this could be the case.

Firstly allowing pets means a property is advertised to a wider audience – pet and non-pet owners, potentially reducing void periods. 

Secondly, it seems like that allowing pets may encourage good tenants to stay in the property for longer, especially if finding a new rental property is a struggle.

And thirdly, in appropriate sized properties, allowing pets may encourage families – who in turn are likely to stay longer and may be seen as more reliable tenants than some singletons. 

Moneyfacts adds that the pandemic period has seen a boom in pet ownership, but government statistics estimate that just seven per cent of private rental properties are advertised as pet-friendly. 

Earlier this year the government introduced a revised Model Tenancy Agreement that makes it easier for tenants with well-behaved pets to find rented accommodation – however, this agreement is voluntary and it is widely thought relatively few agents and landlords use it.

Original Article from Letting Agent Today 26/07/21

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Essential Tips to Help You Rent Out Your Home

Considering renting out your home in Essex but not quite sure where to get started? You’re in the right place. With years of experience in matching landlords with tenants, we’ve got the lowdown on all the essential steps you need to take to rent out your home. The team at Essex Homes And Lettings have put together our top tips for homeowners who are now thinking of renting out their home:

First things first: research, research, research

As with most things, renting out your home in Essex should start with lots of research!

Start by checking out other properties being let in your area to see what’s on the market. What kind of features do they have? How much rent are they being advertised for?

We can help you greatly in this regard, allowing you to get a good idea of the local rental market and help you feel prepared.

Find yourself a great letting agent (Hint: we can help!)

This is an essential step that can make or break how smoothly the letting process goes.

If you’d like expert help with the letting process, take the time to find yourself a capable local letting agent. Do your research online and check out customer testimonials and online reviews.

We recommend getting quotes from at least three local letting agents and having a face-to-face meeting or video call with them all before you decide to entrust them with your property. 

We would love you to choose Essex Homes And Lettings to help you let your property, but we also understand that it’s essential you get a good fit. We are happy to discuss your requirements, and you can book an appointment with us on 01245398466 for an informal chat!

Not quite sure why you might need a letting agent? Here’s how we can help:

  • Advise you on how much rent to charge
  • Market the property for you
  • Hold viewings and show prospective tenants around
  • Draw up tenancy agreements
  • Deal with any property maintenance and repairs directly with the tenant on your behalf

Most letting agents will charge around 10% of your rental income for this service. Which brings us on to our next point…

Do the maths

Before you commit to renting out your home, take some time to weigh up the costs to see whether it will be worth it financially. You can do this once you’ve researched the market and spoken to us to get a better understanding of how much rent you should charge. Factor in tax, agent fees and any other costs involved in maintenance and management to figure out how much you’ll actually be left with.

Ask yourself: will this figure cover your mortgage payments and leave you with a little extra to justify the time and effort spent letting your property? You should also be left a little extra for any ‘in case of emergency’ funds.

Inform your mortgage lender

Once you’re sure it makes financial sense to rent out your property, follow the terms of your mortgage contract and let your mortgage provider know.

It’s easily done, just discuss a ‘consent for lease’ with them and once approved you’re free to start letting.

Arrange your landlord insurance

If you already have an insurer for your house, inform them of your decision to rent out your property. They may need to change your existing insurance policy to reflect that there will now be tenants living there. 

Protect your property and your investment further by sorting out landlord insurance. Some landlord insurance policies will cover you in case of missed rental payments. Please ask us for recommendations if you’re not sure where to find the best policy.

Prepare your property

Once you’ve done all your research, worked out your numbers and hired a reputable letting agent, it’s time to shift your focus back to the property itself. Before any tenants move into your house, there are a few vital preparation steps to take. These include the following:

  • Deciding whether you’ll be including furniture or renting out an unfurnished home. This is important to clarify early on in the process as some tenants are only looking for furnished homes.
  • Making sure any required maintenance checks and repairs are carried out before your tenants move in to avoid inconveniencing them.
  • Removing any items or pieces of furniture that could easily be damaged – there’s no point putting yourself through the stress of leaving them there!
  • Checking that all appliances are working and investing in any essentials that could sweeten the deal for potential tenants.
  • Giving your property a little spruce up and a fresh lick of paint if needed. Staging your house with appealing decor can make a huge difference in how quickly it comes off the market.

Interested in letting your property? For expert rental advice, please contact our team of professionals at Essex Homes And Lettings on 01245398466.

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Own a First-Time Buyer Property in Chelmsford? Consider Letting it for 12 Months

So, you have a property to sell, and it would be ideal for a first-time buyer?

Did you know that many first time buyers are struggling to get mortgage deals right now as lenders become more risk-averse and house prices boom? This, coupled with financial hardship for some first-time buyers means that your property could potentially work better for you as an investment, so why not consider renting out your property rather than selling it right now.

In this article, Essex Homes And Lettings looks at five reasons why letting your property might be a good option for you.

A Valuation Hasn’t Met Your Expectations

It might be that an estate agent has valued your property to sell and come up with a price that is reasonable but doesn’t quite match your expectations or perhaps your property is stuck on the market and just not selling.

With the market seeing a gradual slow down following a buoyant few months, and with those mortgage deals currently out of reach for first-time buyers, it could be a great time to become a landlord. You can rent out your property for 12 months, or a short tenancy of six months, sit tight and wait for the market to rise again.

Whether you choose to manage it yourself or instruct a lettings agency to do it for you, you could be making a return on your investment almost straight away.

After 12 months, you can get the property revalued to see whether or not it has gone up in price and make a decision to continue letting or to sell, based on that valuation.

Top Tip: The rental market is buoyant right now!

Considering Letting Your Property? Do Your Research

When it comes to property, you should always do your research. We pride ourselves on our thoroughness, but for you to make the right decision, you should do some research of your own.

If you think your property is ideal for a first-time buyer, check that there is a market for renters in your particular area of Chelmsford.

For example, it might be that your property is within or close to the town centre and is ideal for young people who want to be near work and social activities.

Top Tip: There’s no such thing as too little information. Go online, read the property sections of your local or regional newspapers, and of course, ask Essex Homes And Lettings for expert advice.

Be Aware of Potential Issues

Renting out a property can be a rewarding business and can be the start of a whole portfolio of properties!

This is great but be aware that it takes a lot of hard work.

  • There are rules and regulations that must be adhered to, and there are potential consequences of not following the legal guidelines.
  • Make sure you can sever emotional ties to bricks and mortar.
  • Consider if you able to manage the property yourself, or you should get a lettings agency on board to help.

Top Tip: Make sure you are fully aware of all the pros and cons of renting your property. Do your homework!

Return to Your Investment

We talk a lot about return on investment, but we also see a return to investment. Don’t forget, if you decide to let your property in Chelmsford it is still yours, and you can choose to move back into it yourself at a later date.

Renting your property out for a year and then moving back into it yourself before you eventually sell is always an option. This is a return to investment.

Top Tip: You can stipulate the length of a shorthold tenancy in an agreement, to make sure it fits your requirements.

Crunch the Numbers

Whether you want to sell your property or you decide to let it, the decision may come down to basic maths. Put simply, do the figures add up? Can you cover your costs? Can you afford to rent out your property or do you need to sell to recoup your investment?  

Top Tip: When you’ve done your research, seek professional advice from a lettings agent because there may be something you have missed, or just not thought about.

We have the local knowledge, experience and expertise to help you make the right decision on whether to let your property in Chelmsford.

We can’t make the decision for you, but we can give you the necessary information to set you on the right path. Call our team on 01245398466 or email for tailored advice on becoming a landlord in Chelmsford.

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A third of landlords on the acquisition trail: Zephyr and DPS

More than a third of landlords have recently purchased a buy-to-let property or intend to do so within the next nine months, according to a survey by The Deposit Protection Service and Zephyr Homeloans.

The poll of more than 300 landlords found that the “opportunity to buy at a discount” is the most common motivation behind these purchases.

Other key driving factors included the desire to invest for the long term for 35% of landlord buyers, stamp duty savings for 34% and a wish to diversify by either location for 26% or by property type for 23%.

The results also suggest that only 7% of landlords have taken a mortgage holiday and 13% landlords have sold a property during the pandemic.

Further to this, the survey shows that 43% of landlords temporarily lowered rents during the pandemic to help tenants and 22% have remortgaged since the Covid crisis began.

Among those landlords who have not purchased buy-to-lets over the last year, “declining rental yields” was the most common reason, cited by 51% of respondents, while “concern about economic stability” was quoted by 42%.

Zephyr Homeloans managing director Paul Fryers says: “Understanding the purchasing motivations behind professional landlords is an essential factor for Zephyr and our mortgage broker clients.

“It’s equally important to recognise and appreciate some of the challenges landlords have been facing during the past year and how they will affect their current and future applications.

“During the pandemic we saw a significant rise in the use of limited companies to buy and manage property portfolios, and it seems a significant proportion of landlords have made the most of the opportunities provided by the buoyant market conditions we have experienced over the past six months.”

Deposit Protection Service managing director Matt Trevett says: “Although the buy-to-let market has remained more buoyant than some predicted, the last year has not been without its challenges for many tenants and landlords.

“The survey suggests a large proportion of landlords have been acting to support their tenants, with a significant proportion saying they had temporarily lowered rents during the pandemic.

“A recent survey from The DPS also showed that the pandemic has triggered movement from cities to towns and the countryside, so landlords seeking to rebalance their portfolios may look to make purchases that reflect that trend.”

Original Article from Mortgage Strategy 17/05/2021

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More landlords looking to buy than sell: Paragon

The proportion of landlords looking to expand their portfolios is higher than the percentage who are looking to scale back for the first time in four years, according to Paragon.

The survey of 900 landlords commissioned by the lender found that 19% of landlords are looking to add to their portfolio in the next year, while 17% are planning to sell at least one property.

The percentage planning to sell is down from the previous two quarters and back to the same level seen in Q2 2020.

Landlords with between 11 and 19 properties are likely to be the most acquisitive as 31% are planning purchases, while 28% of those with 20 or more properties intend to buy more in the next year.

Meanwhile, 26% of landlords operating in the East Midlands and the 24% of those operating North East are planning purchases.

Despite landlords in Wales reporting higher tenant demand, 28% are planning to sell property in the next year.

Paragon managing director for mortgages Richard Rowntree says: “News that for the first time in over four years more landlords are intending on buying than selling is fantastic. 

“This is because not only is it good for the industry but, more importantly, it’s good for tenants. 

“More investment in the private rented sector contributes to higher standards, a moderation of rents and more choice for the millions who rely on the private rented sector for flexible, affordable housing.

“During the uncertainty of the past year or so, the role of the private rented sector has become increasingly important, evidenced by the extremely high levels of demand we have seen for some time now, it’s great to see landlords are responding to this.”

Original Article from Mortgage Strategy 27/04/2021