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More brokers searching for lenders who accept first-time landlords

In June lenders who accept first-time landlords was the most popular search on criteria sourcing system Knowledge Bank.

This follows a raft of recent product and criteria changes by lenders and suggests that potential landlords have not been put off by a loss of tax incentives and the ban on tenant fees.

Nicola Firth (pictured) chief executive of Knowledge Bank said, said: “The buy-to-let sector has taken a few punches over recent years with the removal of tax incentives, the ability to charge fees and even lenders going into administration.

“However, this is a resilient market and with competitive interest rates, and a wide product selection, potential landlords are asking brokers to find them a home for their loan requirements.

“Buy-to-let is another example of a sector where criteria changes are made on a daily basis so it’s vital for brokers to whittle down the lenders who will consider their clients in advance of any product sourcing. There’s no point finding a great product only to discover that your client is refused on criteria.”

Recent reports also show that product availability for first-time buy-to-let mortgages is the highest it has been for five years, coupled with an average fall in interest rates over the same period.

In other product areas; the monthly criteria activity tracker showed that the maximum age borrowers could be at the end of the mortgage term was the most searched-for criteria in the residential mortgage category.

Other search highlights reveal that the maximum loan-to-value continues to be the most popular search for second charge loans and the minimum age of borrowers at application the most searched for criteria within equity release.

By Michael Lloyd

Source: Mortgage Introducer

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Landlords optimistic despite Brexit

Two thirds (64%) of landlords are optimistic about the outlook of the residential buy-to-let sector despite Brexit, according to latest research by Cambridge and Counties Bank.

The research found that more than one in 10 (13%) are “very” optimistic in terms of investment growth and yields.

Simon Lindley, chief commercial director, Cambridge & Counties Bank, said: “In spite of Brexit worries, it is great to see that the overall outlook for the commercial property sector is one of optimism.

“We remain very much focussed on supporting our clients with our comprehensive product suite and in doing so maintain our market leading level of customer satisfaction.”

Nearly a fifth (19%) are reportedly looking to grow their portfolios by a third and 11% want to double their portfolio over the next three years.

Brexit remains a key uncertainty for property sector professionals, with two fifths (40%) of landlords conceding that it is top of their list of concerns.

The research revealed that just one in five (20%) landlords said they were very confident of their lender’s stability.

Lindley added: “Cambridge & Counties Bank has seen a steady stream of borrowers switching from other lenders, often recommended by the intermediaries and brokers we work closely with on a daily basis.

“We are actively focussed on becoming the bank of choice for professional property investors and landlords.

“We will capitalise on the record set of results we posted for the financial year in 2018 and the momentum we have across the UK to grow our market share further.”

By Michael Lloyd

Source: Mortgage Introducer

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Buy-to-let trends which could continue in the second half of 2019

Without doubt 2019 has so far proved a year of change within the buy-to-let sector.

At a time of Brexit uncertainty, political and economic uncertainty, what can landlords expect from the private rental sector in the second half of 2019?

Setting the scene

The first half of 2019 has brought wide-sweeping changes to the private rental market and it will inevitably take time for stakeholders to become accustomed to the new requirements.

  • The Tenant Fees Act 2019 came into effect on June 1 and will have significant impact on the letting agent financial model.

Many expect agents to pass on extra costs to landlords, to compensate for the traditional revenue streams they had from tenant fees (now outlawed). This could result in landlords hiking rents.

  • The Homes (Fitness for Human Habitation) Act 2018, came into force in March of this year. This has put extra emphasis on landlords ensuring that defects within a rental home are quickly resolved. Tenants have new powers to take landlords to court, if major hazards are not addressed.
  • From April 1, 2019, any letting or property management agent who holds client money on behalf of a landlord or tenant, must belong to a government-approved Client Money Protection Scheme.

What else could happen over the coming months?

In early April, Housing Minister Heather Wheeler, told the annual conference of the Association of Residential Letting Agents that more legislative changes were on the way for the private rental sector.

We await those government announcements, but here is a selection of topics landlords need to stay on top of.

Section 21 changes

Landlords are braced for the next twist in government plans to revise the repossession process.

In April, the government announced that it wanted to scrap Section 21 “no fault” evictions, to offer tenants greater reassurance and stability. It said it would consult on the matter in the coming months.

However, the statement brought outrage and concern from some corners. The Residential Landlords Association warned that landlords need reassurance that their rights are carefully considered, if not that they could leave the sector in vast numbers, should Section 21 end.

The RLA has conducted its own survey on the issue and reported a record number of landlords got in touch to raise their concerns and share their experiences.

The Section 21 process is currently slow and whilst most stakeholders accept there needs to be change, the concern is that government amendments need to reflect everyone’s best interests, including landlords.

The suggestion is that in legitimate cases, the law should allow landlords to regain possession quickly and lawfully.

This emotive topic is one set to run for some time, whilst the government collates feedback.

Right to Rent clarity

The government’s controversial Right to Rent rules took effect from 2016, but were deemed in breach of human rights law and discriminatory, in the High Court earlier this year.

Right to Rent puts an emphasis on the landlord to carry out checks on prospective tenants, to ensure that they have the right to live in the UK. Failure to do so – and renting to an illegal immigrant, carries high penalties for a landlord.

This, the High Court contests, has motivated many landlords to “play safe” and only accept UK residents as tenants, discriminating against anyone else.

Brexit adds further confusion to this situation, as landlords, agents and tenants await clarity on the rights of EU citizens after the UK has left the European Union.

With Brexit’s date moved to October 31, 2019, the uncertainty is likely to roll on for several more months yet, as the government insists Right to Rent will continue, despite the legal challenges.

Could political change be a catalyst for buy-to-let revision?

Perhaps more of a long shot, but at the time of writing, Conservative MPs are queueing up to contest leadership of the party and become the next Prime Minister.

Among those with their names in the hat are former housing,  communities and local government secretary, Sajid Javid.

Will the next Prime Minister be politically savvy when it comes to housing and seek to curry favour and re-build bridges with landlord voters?

A recent National Landlords Association survey reported that 85% of landlords would vote against any political party proposing to remove Section 21, with 89% opposed to any party proposing rent controls.

Just one in six private landlords said they would support the Conservatives in an election, in light of the tax changes made to the buy-to-let industry in recent times.

A number of high profile Conservative MPs have over the past few months called for changes to what has been perceived as a damaging policy towards private landlords.

In March, former work and pensions secretary Iain Duncan Smith, told delegates at a landlord conference that landlords letting properties to social tenants should pay less tax.

He also criticised landlord tax changes introduced by the present government, saying: “I think there have been some mistakes made. I think we really do need to ensure that we keep the social rented sector functioning, and with reasonable margins so that [landlords] stay in it, otherwise we’re going to be pushed to find rental properties for people and some of that pressure already exists.”

Jacob Rees-Mogg stated in 2017 that stamp duty must be cut “as a matter of urgency”, warning that a failure to do so, could cost the party the next election.

Meanwhile, Boris Johnson, another candidate for next Prime Minister, called for the abolition of stamp duty (which he described as “absurdly high”) in 2018.

With the private rental sector accounting for 19% of homesteads in 2017-18 (English Housing Survey) and homelessness an ongoing issue, will a new Prime Minister see the need to offer landlords the carrot rather than the stick?

Will bridging and alternative financing grow?

Brexit uncertainty, high house prices and lack of affordability have led to stagnation within the housing market.

This is true of buy-to-let every bit as much as the residential sector.

Many people are electing to stay put, rather than sell or move. A lot of those homeowners are choosing to further develop properties in the hope of improving living conditions and perhaps adding capital growth to the value of their home.

Within the buy-to-let sector, this makes sense for landlords who need to meet not only the requirements of the Homes (Fitness for Human Habitation) Ac 2018, but also tightening rules around Houses of Multiple Occupation (HMOs).

New planning application rules in England, are also encouraging people to extend properties.

Property owners will no longer need a full planning application to extend a home.

At the same time, permitted development rights will afford business owners greater flexibility when it comes to converting properties on the high street.

Landlords who own shops will be able to convert these to office spaces without having to apply for full planning application.

These legislative changes could serve as a catalyst for more people to look at conversions, potentially increasing demand for bridging loan finance and commercial or semi-commercial mortgage financing.

Economic change

The effects of inflation and Brexit continue to keep prospective Bank of England base rate changes in check.

At present, there is somewhat of a buy-to-let mortgage war, with the number of products the highest it has been for twelve years, according to Moneyfacts.

Lenders continue to operate with squeezed margins as they offer lower rates and incentives like cashback and free valuations, to undercut rivals and entice buy-to-let borrowers.

The question is of course, how sustainable is this trend and will we see rates rise before the end of 2019?

This question could equally apply to the Bank of England base rate.

Outgoing Governor Mark Carney, suggested in early May, that interest rate rises could be “more frequent” than expected, if Brexit is resolved and inflation and economic growth increase.

Any increase in base rate is likely to have an effect on lender rates.

With house prices having stalled in many areas, the plethora of competitive buy-to-let mortgage deals and the possibility of interest rates rising, the second half of 2019 might be an ideal time to take advantage of a buyers’ market.

More expat buy-to-lets?

Whilst on the subject of economics, one should not forget the impact of a weakening pound sterling.

A depreciating pound, as a consequence of Brexit, has perhaps played to the favour of expats, looking to invest in UK rental property.

Whilst there is no guarantee of future currency fluctuations, we have seen the number of lenders in the buy-to-let expat market increase over the last year.

However, there are a number of considerations for expats, when applying:

  • With most lenders, the applicant must be a UK citizen.
  • They will need to provide proof of income.
  • In most cases, the expat will need to be an experienced landlord.
  • In some cases, there is a better chance of being approved, if employed by a blue chip company.
  • Most lenders won’t lend if the expat lives in a UN-sanctioned country.
  • The minimum loan amount is normally £100,000.
  • Whilst the number of lenders offering expat buy-to-let mortgages has increased, it remains a limited market and interest rates are usually higher.
  • In most cases, the lender will expect an expat to have at least 30% of the property value as deposit.
  • It may be harder for an expat to keep up to date with domestic changes in legislation and to manage the property.

Increased professionalisation of the PRS

Finally, we can expect a greater degree of professionalism and a larger proportion of experienced landlords with existing portfolios, to dominate the buy-to-let sector.

The changes that have taken place over the past three years, have had more of an impact on landlords with smaller portfolios of one or two rental properties.

The so-called ‘accidental landlord’ has found their margins squeezed by ongoing tax changes while landlord obligations have become more strenuous.

Landlords with larger portfolios and more equity, have arguably been better placed to make additional purchases – and are often better prepared, or more willing, to cope with change. They may well snap up properties sold by anyone leaving the sector.

Specialist lender Paragon, reported a significant increase in the number of landlords with large portfolios, applying for buy-to-let lending in the first half of 2019.

Indeed, the lender said that 88% of its total buy-to-let business came from landlords using limited companies operating large portfolios, an increase of 16% year-on-year.

Despite so much upheaval – and with more likely to come, there remains an upbeat note for landlords who retain their appetite for buy-to-let.

Market conditions remain conducive for borrowers and there are some terrific deals out there reflecting low interest rates and incentives.

However, with so much change within the industry it is imperative that landlords keep up to date with what is happening and how it impacts them.

By Andrew Turner

Source: Mortgage Introducer

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Buy-to-let purchase loans in melt-down as landlords beat their retreat

The number of mortgage approvals for all types of house purchase has dropped sharply, with a drop of almost 10% in buy-to-let loans.

Approvals for home movers have slid 6% annually to 25,280, while approvals for first-time buyers have dropped for the first time in six months.

Data from banking trade body UK Finance shows there were 28,800 first-time buyer mortgages approved in March, down 2.4% annually, the first time this figure has dropped since last September.

Buy-to-let purchase mortgage approvals fell 9.1% during March.

In contrast, remortgage approvals in both the residential and buy-to-let sector increased.

Commenting on the figures, John Phillips, national operations director at Spicerhaart, said: “The purchasing market has been tough for some time now, and I don’t think it is going to get much better until the wider market forces change, and with no real idea what is going on with Brexit, it is hard to predict when that might happen.

“But with the ongoing threat of a rate rise on the cards, people will be fixing now to avoid any nasty surprises down the line, so this will account for some of the remortgaging rise.”

Paul Smith, chief executive of haart estate agents, said: “Evidently, the demand is there, but mortgage and transaction figures will not increase until we have the stock in the market to match it.”

By MARC SHOFFMAN

Source: Property Industry Eye

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Not all gloom for rental market

It has been widely reported in the media how Brexit uncertainty has slowed down both the buy-to-let and residential housing market.

However, closer examination suggests other factors may have as much or more influence on current market activity.

Undeniably there has been a slowdown in both residential and buy-to-let markets over the past 12 months.

UK Finance recently reported that while buy-to-let remortgage activity has soared, the total number of buy-to-let purchase completions in 2018 was 11.2 per cent less than in 2017.

Meanwhile, their figures for January 2019 showed a 1.5 per cent reduction in the volume of residential lending, compared to the start of 2018. Put simply, people were choosing to sit tight and rely on the private rental sector rather than buy their own homes.

Key Points

  • There has been a slowdown in the buy-to-let sector
  • There has been intervention by the government in the buy-to-let market
  • The number of buy-to-let products shows lenders are positive about the outlook

For many who are renting, the prospect of saving for a deposit remains an almighty challenge.

The Ministry of Housing, Communities and Local Government’s recently-released English Housing Survey for 2017-18, indicated that the private rental sector has remained unchanged for the past five years at 4.5m households, which equates to 19 per cent of the total.

The latest survey revealed that 58 per cent of renters expected to buy a property eventually, with 26 per cent anticipating this will happen within the next two years, while 41 per cent suggested it will take five years or more to accomplish this goal.

Those timescales suggest that Brexit is not a major consideration.

Meanwhile, landlords have been dealing with more immediate and tangible concerns.

The past three years have seen substantial government intervention in the buy-to-let market, with the introduction of stamp duty on additional properties and the reduction and gradual replacement of mortgage interest tax relief perhaps the biggest financial changes.

But factor in the new house in multiple occupation licensing laws and crackdowns on living standards, plus the imponderable consequences of the imminent tenant fees ban and it is easy to see why some landlords have decided to sell up or not invest.

In particular, it has been the smaller landlord, perhaps with less time to keep abreast of the changes or adapt their strategy, that has struggled with the changes.

Many landlords with larger portfolios may already operate with more organised strategies in place, particularly in light of the Prudential Regulation Authority changes that came into effect in October 2017.

These required a more rigorous approach to the underwriting of portfolio borrowing and resulted in such investors having to provide more detail at the application stage.

It is too simplistic to simply lay current property investment levels purely at the feet of Brexit. There are too many other elements at play.

Adopting a pragmatic approach to investment

There are still plenty of reasons why buy-to-let investments can offer opportunities to those looking for solid financial returns.

Firstly, depending largely on property location and type, many landlords continue to turn a profit, which currently outweighs those available from other types of investment.

Here are a few positive factors to consider if your clients are contemplating a buy-to-let investment:

• At the moment, there is a general sense of stagnation within the property market. This means that property prices are, in many areas, no longer accelerating at previous rates.

Consequently, there may be opportunities available on the market. If you come across a property that has historically been rented out, this might mean there is less work to do upon purchase to have it ready to let.

• Market sentiment, as highlighted by the government’s survey, suggests no reduction in demand for rental homes, as thousands put on hold their dreams of home ownership in favour of renting for the foreseeable future.

In February, London estate agent Foxtons reported that in 2018 there was an 8 per cent increase in renter registrations in London, compared to 2017.

• There are big regional disparities in buy-to-let performance – and landlords are not bound geographically by where they own property. Buy-to-let yields and capital growth prospects vary across the UK, with the North West and the Midlands figuring prominently in recent data.

Since June 2016, when the Brexit vote took place, 10 UK cities have achieved double-digit house price growth, with seven located in the north of England.

• While Brexit has arguably had a negative effect on London and the South East, so too has the price of property for would-be buyers and, likewise, rent for would-be tenants.

With government investment in infrastructure, in particular the Northern Powerhouse, businesses have relocated to other parts of the UK and workers have followed suit. That has helped to create vibrant micro-economies for buy-to-let.

• Historically, house prices have recovered from any short-term economic or political unrest and proved resilient in the face of the financial crisis of a decade ago. Investment in bricks and mortar should always be regarded as a long-term strategy, in this context, well beyond Brexit.

• The sheer volume of buy-to-let products in the market place (1,162 in late February 2019, according to Moneyfacts), reflects a positive buy-to-let outlook from lenders. But the choice also comes with all sorts of incentives and competitive mortgage rates.

The Bank of England base rate remains historically low and rates for five-year fixed rate buy-to-let mortgages, for example, are more than 2 per cent less than in 2010.

The big question is how long lenders can sustain these low mortgage rates? By delaying investment in buy-to-let, some borrowers could run the risk of missing out on the lowest deals, should rates rise in the future.

We live in extraordinary times and Brexit presents its own unique set of challenges, but should not be confused with wider property market issues.

Perhaps never before has there been as much need for a buoyant private rental sector that serves the country’s escalating needs.

With low interest rates, infrastructure investment and growing tenant demand, Brexit may not present as big a challenge as recent tax and legislative changes. But, with a sound and responsive investment plan in place, buy-to-let landlords can prosper and Brexit offers no reason why that should not continue.

By Andrew Turner, interim chief executive of Commercial Trust

Source: FT Adviser

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Buy-to-let sector still offers opportunities

It is easy to forget that behind the scenes of the supposed landlord exodus, one in five UK households still rents privately and there are still attractive opportunities in the buy-to-let and build-to-rent sectors.

This truth is not lost on the slew of property investment platforms out there, which continue to grow, many of which are technically peer-to-peer firms or intermediaries rather than asset managers.

You might even say there has been an air of over-confidence, as an explosion in P2P property investment has sparked a flurry of interest from institutional investors.

However, lack of a track record coupled with lingering suspicions surrounding the wildly different range of approaches taken by such firms, has held the sector back.

It is not hard to see why — it is all about risk. At one end of the spectrum, some offer seemingly attractive returns riskier development projects without any concern for their performance.

At the other, you have asset managers with a vested interest in performance.

In every new fintech industry, harsh lessons are learned. Some models fall by the wayside and it is normally those that cut corners. Property investment platforms have not experienced a day of judgement like this yet.

Sky-high default rates sparked a wave of platform collapses in China this year and the Financial Times revealed in November that £112m of the £180m in Lendy’s loan book was at least one day overdue in October. Warning signs the day of reckoning may be closing in?

Natural selection is coming in 2019 and the defaulters will identify the fittest so advisers do not have to.

We just have to get the bloodletting out of the way first.

Source: FT Adviser

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Nearly half of all landlords in the UK Buy to Let sector are ‘Pension Pot’ landlords

Nearly half of all landlords in the UK Buy to Let (BTL) sector are ‘Pension Pot’ landlords, latest research from Your Move, one of the UK’s largest estate agency networks, has today revealed. Your Move’s annual Landlord Survey defines ‘Pension Pot’ landlords as those who are over the age of 45 and view their portfolio as a long-term retirement investment. Over four in ten property owners in the BTL sector class themselves as ‘Pension Pot’ landlords, with nearly a quarter (23%) of this group, having been a landlord for 15 years or more.

Your Move surveyed 1071 buy-to-let landlords to learn more about their portfolios, behaviours and attitudes towards tenants, letting agents and the lettings market. ‘Accidental’ landlords – those who were not expecting to be landlords – were the second most common type of landlord (29%), followed closely by ‘Professional’ landlords (20%).The survey also revealed that ‘Accidental’ landlords are most likely to be female and under the age of 45, often thrust into the market through inheritance or other changes in their personal circumstances. ‘Professional’ landlords, however, tend to be male, over 45 years old, and consider being a landlord as a job or career.

The findings also showed that ‘Pension Pot’ landlords are more likely to live close to their rental properties than either ‘Accidental’ or ‘Professional’ landlords, with 41% living within 1-5 miles of the property.

Further, nearly three in 10 (29%) ‘Pension Pot’ landlords see their properties as a business, with over half (53%) investing in more than one property. However, even though these landlords may be more ‘investment minded’, Your Move’s survey found that ‘Pension Pot’ landlords are also more likely than the other groups to build a personal rapport with tenants and want tenants who will protect their investment. In fact, 18% said they like to meet or talk to new tenants before signing a contract, which was the highest proportion of any group. Over half (53%) felt it was important that tenants view the property as their own home.

Source: London Loves Business

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Half of landlords use property as pension

Nearly half of all landlords in the UK’s buy-to-let sector are aged 45 plusand view their property portfolio as a long-term retirement investment, according to a poll.

The survey, conducted by estate agency network Your Move among 1,071 buy-to-let landlords, found these so called ‘Pension Pot’ landlords were more likely to live closer to their rental properties than ‘accidental’ or professional landlords.

Four out of 10 (41 per cent) of those in surveyed in the pension pot category were living within five miles of their rental properties.

Just under three in 10 of those in this category saw their properties as a business, with 53 per cent investing in more than one property.

Martyn Alderton, national lettings director at Your Move, said the research suggested the private rental sector is still appealing to many landlords as a source of income and funding into retirement.

He said: “It is also clear that ‘Pension Pot’ landlords are keen to build a personal rapport with tenants who will look after their investment.

“As an industry, it is increasingly important that we continue to support these ties, providing long-term benefits to tenants looking for a property to call their home and also for landlords looking for ways to fund their retirement.”

David Hollingworth, associate director of communications of mortgage broker London & Country, said the results of the survey showed landlords in the ‘Pension Pot’ category clearly perceive that investment as an important channel within their retirement portfolios.

He said: ‘People are investing over the long-term and it is, therefore, not surprising that they see property investment as part of their pension pot.

‘In the past, there has been concern that landlords would be dumping stock at the first sign of a downturn, but, in the Financial Crisis, that didn’t transpire and people stuck with it – People were instead looking at the income they could generate from rental income.”

Source: FT Adviser

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Younger landlords more pessimistic about Buy To Let, despite opportunities

UK landlords are divided along generational lines over the future of the buy-to-let sector and whether to stay the course or sellup, new research suggests.

Overall, some 56 per cent want to keep or buy more rental properties, but 44 per cent are looking to sell, according to data from investment firm Octopus Choice.

Millennial landlords are more inclined to sell than stay, with 65 per cent planning to sell one or more of their properties. This compares to 29 per cent of those aged 55 and over. Younger landlords are also more likely to admit that managing a buy to let has become a hassle with 81 per cent doing so compared to 39 per cent for investors over 55.

The biggest annoyance cited by millennials is dealing with onerous tax returns, while older generations blame high one-off costs.

Some 87 per cent of millennials admitted that they underestimated the costs involved, including repairs and upkeep, insurance and initial legal and conveyancing fees, compared to just a third for those over 55.

Among those looking to exit the market, some 24 per cent blame falling yields while 23 per cent say it is due to tax changes and 19 per cent are put off by cooling house prices.

Some 60 per cent say that property management had become a burden and 61 per cent had underestimated the costs involved.

Sam Handfield-Jones, head of Octopus Choice, said: “The hassle and cost of buy-to-let is a source of growing frustration, and some landlords may find that their once reliable day to day income is becoming harder and harder to come by.”

But this isn’t the case across all parts of the market, with money still to be made from the right property in the right location, he pointed out.

He added that London landlords face the toughest choice, with falling yields and slowing house price growth set to reduce profits.

An analysis by the firm shows that typical buy to let properties in London cost landlords over £1,250 per annum for the first five years and an average London house worth £475,000 would have to be sold for £590,000 eight years later, just to break even, even taking into account the income over that eight year period.

While London hotspots can still be found, such as Tower Hamlets, Barnets and Hackney, three quarters of landlords in the capital think investing in buy-to-let will be less worthwhile in five years time, more than any other area.

In Scotland and the East Midlands, it’s a different story with Scottish landlords enjoying average annual returns of 8.8 per cent on their investment over an eight year period, while those in the East Midlands only return 8.2 per cent.

Handfield-Jones added: ” Against this backdrop, its not surprising that some investors are seeking alternative ways to indirectly invest in the property market.”

“For those looking to leave, there are growing numbers of ways to keep one foot in the door”

Richard Truman, Head of Operations at Simple Landlords Insurance added ” Our own research into the ’emerging landlord’ sees landlords in general getting younger. Perhaps what were seeing here is the difference between the small, accidental landlords, and the larger professional landlords. And it;’s a gap thats widening.

Those getting into property investment to make a quick hassle-free buck, and who haven’t done the due diligence, research and number crunching , are going to find things tough in today’s market.

Those investing for the long term, clear on their strategy and goals, looking to grow, and savvy about the market challenges and opportunities- those are the landlords winning at property, and confident about the future.”

Source: Simple Landlords Insurance

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This July was strongest for remortgaging in a decade

This July was the busiest for remortgaging in a decade, as there were 46,900 residential transactions worth £8.7bn that completed, UK Finance figures show.

This means that volumes were 23.1% higher than the same month in 2017 and by value there was a 26.1% increase year-on-year.

There was a similar trend in buy-to-let remortgaging, where 14,700 loans worth £2.4bn were completed, increases of 7.3% by volume and 9.1% by value year-on-year.

Jackie Bennett, director of mortgages at UK Finance, said: “The residential remortgaging market saw its strongest July in over a decade, as homeowners pre-empted the latest Bank of England rate rise by locking into attractive fixed-rate deals.

“There was also considerable growth in remortgaging in the buy-to-let sector, showing that while recent tax and regulatory changes are impacting on new purchases, many existing landlords remain in the market.”

The number of buy-to-let purchase mortgages completed fell by 14.1% year-on-year, with just 14,700 being completed.

Richard Pike, sales and marketing director of Phoebus Software, said: “While July is traditionally a busy month, it is clear that a number of people were kicked into action by the anticipation of the base rate rise.

“It was not such a rosy picture for purchases however. It is clear that consumer confidence is starting to take a hit, undoubtedly by all the talk of a no deal Brexit.

“Whenever there is uncertainty, people tend to put off making big decisions such as buying a new home. I expect to see more and more caution over the next six months as people wait to see what the outcome will be and what effect it will have on them personally.

“If ultimately, the result is better than expected, this could turn out to be pent up demand with a surge in house moves afterwards, but it could be many months before we see this come to fruition.”

Shaun Church, director at Private Finance, said: “Remortgage activity appears to be the main thing keeping the buy-to-let market afloat.

“Though punitive regulatory changes have dissuaded new entrants to the market, today’s data suggests many existing landlords are staying put.

“With mortgage costs often being one of landlords’ biggest expenses, swapping to a lower-rate deal is a sensible strategy for making a rental property more profitable.”

Source: Mortgage Introducer