BTL mortgage availability Almost half One in 10 North West Stamp Duty holiday Buy-to-let 5-year fixed BTL mortgages buy to let investment areas UK property investment locations buy-to-let lenders BTL properties buy-to-let landlords Number of UK buy-to-let landlords buy-to-let limited companies
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Most attractive cities for BTL landlords revealed

London and Manchester has been named by landlords as the most attractive cities to invest in buy-to-let (BTL) properties in 2020 according to Simply Business.

The research shows that the two cities were where landlords expect the BTL market to be most robust this year, with both receiving over a third of votes when asked which city represents the best investment opportunity.

Liverpool and Birmingham followed closely behind as BTL hotspots, with both cities securing 10% of the vote amongst landlords when considering where their next investment in 2020 lies.

Bea Montoya, chief operating officer at Simply Business, said: “Buy-to-let landlords are crucial to the UK economy, contributing a combined £16.1bn through pre-tax spending.

“The sector also now houses 20% of British households and has a huge presence up and down the country, so it’s wholly encouraging that landlords view a broad spread of regions as attractive areas to invest this year.

“London usually comes out on top for being the most expensive city to invest in property in the UK, but falling house prices are making it an attractive place to invest once again.

“We know a quarter of landlords are planning to sell at least one property this year, largely due to government reform and tax changes, so it’s reassuring to see that landlords are still eyeing up investment opportunities up and down the country.”

By Jessica Nangle

Source: Mortgage Introducer

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Boris can lead a Conservative council housing revolution

With Boris Johnson now undisputed world king of the post-Brexit scene, the only relevant policy debates are those going on inside the government itself. These are yielding unusual fruit.

Esther McVey, a deep-dyed Thatcherite and an advocate of blue-collar Conservatism, has been arguing for more council housing. The housing minister wants to help those “left behind” voters who broke Labour’s red northern heart.

However, she has reportedly clashed with her boss, housing and communities secretary Robert Jenrick, who is in the more conventional Tory “property-owning-democracy” mould.

But McVey is right — it is time for another look at council housing, and this Conservative government is ideally placed to do it.

Johnson is enthused by regional regeneration, infrastructure projects, and levelling up the UK. His chief aide Dominic Cummings, meanwhile, is deeply interested in applying scientific research and development to solve big problems and create new industries.

If they combine their enthusiasms, Johnson and Cummings could realise a once-in-a-century opportunity to solve the UK’s housing crisis. To do it, they need to revive the One Nation Conservative party tradition of mass council house building, and use it to make the UK a world-leading location for green modular house building. That way, the housing crisis gets fixed, and the country gets a new high-tech industry.

No UK housing shortage has ever been cured without a mass council house building programme. From 1945 to 1979, all British governments knew this and invested heavily in (mostly) good and plentiful council homes.

Unlike private house builders, who are bound by their duty to shareholders, the state can invest to solve housing shortages, not solely to make a profit from them.

Government borrowing costs are currently at an all time low, and the north of the country is lacking both infrastructure and housing. The Prime Minister therefore has a historic chance to borrow both to build council housing and to construct transport links within and between towns and cities across the Midlands and the north.

The new houses could be called “Boris Homes”, to remind tenants of their benefactor. A project like this, which breaks decisively with the “austerity” of the last two Tory Prime Ministers, could help cement Johnson as the long-term electoral friend of Workington man. The “Boris” branding would deal with George Osborne’s old fear that council housing only creates Labour voters.

Of course, governments used to rely on local authorities to build council homes, but that was before the centralising force of Thatcherism forced them to slash their construction capabilities. Most UK local authorities, even if asked, no longer have the resources, experience and manpower to launch a transformative council house building programme.

So the government should set up a platform of all the major UK institutions, working closely with regional mayors and local authorities, to create Council Housing 2.0: a giant joint venture corporation to build 150,000 new council homes a year.

The government could incentivise and match institutional investment to build the homes, and then share (along with the regional authorities) in their long-term rents.

Now that we are definitely leaving the EU — in just one week — the government should also cut the utterly tedious procurement rules that bed-block big projects.

These council houses need to be built quickly, cost-effectively, and sustainably. Cummings has plans to create R&D centres of excellence in the north. To combine that need and his ambition, the government should invest heavily in a campus for the research, development and manufacture of modular housing.

A modern modular factory can build a semi-detached, highly-energy efficient house — that will last 100 years — in 14 days for less than £70,000.

If the government gets this modular R&D cluster right and attracts global investment and talent, it will solve the UK’s housing crisis and incubate a new British modular export industry that can help other countries solve theirs.

For too long, UK housing policy has been held back by prejudice and party politics. Council housing was a dirty word for generations of Conservative politicians. But it is one of our country’s great civilising projects, providing shelter for the poor and vulnerable.

If Johnson is brave, council housing can become an engine for levelling up whole regions and making the UK the global leader in a cutting-edge technological field.

You have ridden a Boris Bike — get ready to live in a Boris Home.

By Bruce Dear

Source: City AM

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The proportion of income spent on rent drops

The proportion of income that tenants spent on rent fell between 2016 and 2019 despite increases in rental levels, according to The Deposit Protection Service (DPS).

Its rent index showed the average proportion of wages spent on rent decreased from 32.64% in 2016 to 30.64% in 2019.

The DPS said that various factors had helped improve the affordability of renting during the period.

These included: a 2.69% increase in average salary (from £29,559 to £30,353) and a £77 decrease in average tenancy deposits (from £905 to £828) since the introduction of the deposit cap in June last year.

Matt Trevett, managing director of the DPS, said: “Although rents have risen over the past decade, other changes since 2016 have helped ensure renting has become on average more affordable.

“Predictions that rents would rise in response to the introduction of the tenant fees ban and deposit cap do not seem to have materialised, with many landlords seemingly declining to increase rents since last summer.”

Average rents reached a peak of £777 during Q3 2019 before decreasing marginally by £4 to £773 during the following quarter.

Paul Fryers, managing director at specialist buy-to-let mortgage provider Zephyr Homeloans, added: “Although the longer-term recovery in rental levels is likely owing to broader economic factors, changes to rental figures are also more likely at moments where property changes hands.

“Over the past couple of years, professional landlords have become a larger proportion of the buy-to-let market as more and more smaller or ‘accidental’ landlords sell up, partly as a result of increasing costs.”

Northern Ireland saw the biggest increase in average monthly rents (3.01%) from £532 to £548 during Q4 2019, while average monthly rent in Yorkshire and The Humber dropped the most, from £551 to £524 (4.90%).

London continues to be the most expensive rental region, with average monthly rents standing at £1,345 in Q4.

This is over two and a half times the amount (£518) paid in the UK’s cheapest region, the North East, during the same period.

Excluding London, average monthly rent during the last quarter of 2019 stood at £672.

Detached properties saw the largest increase (0.81%) in average monthly rents, from £990 to £998, in Q4.

Monthly rents for terraced houses declined the most during the quarter, falling 0.55%, from £732 to £728.

By Michael Lloyd

Source: Mortgage Introducer

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London rental growth at three-year high

Annual rental growth in London reached 2.8% in Q4 2019, the highest growth rate for three years, Zoopla’s Rental Market report shows.

In York, Bristol and Nottingham the average cost of renting has increased by more than 5%, more than double the UK average of 2.6%.

Aberdeen, Middlesbrough and Coventry were the only three cities where the cost of renting has fallen compared to last year.

Mary-Anne Bowring, managing director at Ringley, said: “Rental prices in London have increased by 2.8% – the highest rate in the capital for almost four years – and providing the Brexit deal doesn’t prove too damaging, this will likely continue.

“Zoopla’s prediction that anticipates a 3.5% growth in rental prices over 2020 is welcome news for landlords and the institutional investors eyeing the UK rental market, with recent Savills research showing there are now over 150,000 build-to-rent homes in the pipeline.”

The Office for National Statistics estimated that average rents grew by 3.8% in 2019, compared to the 2.6% cost of renting.

Bowring added: “Rental growth has largely been driven by higher wages but there are al-ready signs wage growth may be slowing. Lack of supply is also another factor, with many private landlords looking to exit the market following tax and regulatory changes.

“A drop off in available rental homes combined with reduced wage growth could leave renters out of pocket. To that end, the government should rethink its approach to buy-to-let landlords.”

BY RYAN BEMBRIDGE

Source: Property Wire

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Business leaders call for clarity on post-Brexit trade talks

UK business leaders have urged Boris Johnson to spell out his plans for post-Brexit trade talks with the European Union.

A new poll for the Institute of Directors (IoD) found that just 35 per cent of firms believe the existing Withdrawal Agreement between the UK and the EU gives them the “certainty needed to make planning and investment decisions”.

Meanwhile a majority of businesses – 55 per cent – said they would “only be able to make planning and investment decisions with certainty when we understand our future relationship with the EU”.

The findings come after Chancellor Sajid Javid angered some business groups by warning companies that there will be no alignment with the EU after Brexit – and calling on firms to instead “adjust” to new regulations.

He told the Financial Times: “There will not be alignment, we will not be a rule taker, we will not be in the single market and we will not be in the customs union – and we will do this by the end of the year.

“There will be an impact on businesses one way or the other, some will benefit, some won’t.”

But Allie Renison, head of Europe and trade policy at the IoD, said: “To give businesses any chance of being ready for the new relationship by the end of 2020, the Government needs to be as clear as possible about what its intended destination is.

“With directors clear that negotiations with the EU are the priority right now, clarity is crucial for so many companies.

“Just calling it a free trade agreement gives no indication of the balance between alignment and divergence, which is essential for firms to do any kind of advance planning. Directors need to know what the Government’s priorities for market access are for the EU.”

More than 60 per cent of the 952 company directors surveyed by the IoD meanwhile said striking a post-Brexit deal with the EU was “more important” to their company than agreeing a pact with the United States.

Just a fifth (20 per cent) said a deal with the US and other countries outside of the EU was “important” to their firm.

The Times reported on Tuesday that Johnson will attempt to increase his influence in trade talks by publishing plans for parallel discussions with the EU and the US in the coming weeks.

According to the paper, the Prime Minister will deliver a speech and publish a series of documents after Britain leaves the EU on 31 January setting out Britain’s formal negotiating mandate for both sets of talks.

A third batch of papers will meanwhile outline plans for agreements with other countries.

Under the terms of the current Withdrawal Agreement, the UK will enter a transition period after it leaves on 31 January, during which time it will stay broadly aligned with EU rules and standards.

Johnson has vowed not to extend that period beyond the end of this year.

Number 10 said: “We are free to begin discussions with countries around the world from February 1. We are ready to begin discussions with the EU from February 1.

“The EU have various processes to go through before they are ready to sit down and have those discussions with us. The EU have agreed formally to complete this process by December 2020, that is what we would expect to be achieved.”

The European Commission, meanwhile, will not sit down to agree its negotiation demands until 25 February.

Spokesman Eric Mamer said: “This, we know, will take some time, which is why we have said we will start negotiations as quickly as we can, but it will certainly not be before the end of February, beginning of March.

“This is not a slowing down or speeding up of the process.

“This is simply the nature of the institutional process and the consultations that need to take place before the negotiation directives can be formally adopted.”

By Matt Honeycombe-Foster

Source: HOLYROOD

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House Prices Rise at Fastest December Rate on Record

Average UK house prices jumped by 2.3% in December, a record for that month, according to Rightmove.

The online property website said that last month’s rise in average house prices was the biggest December jump since it started its house priced index back in 2002. Rightmove revealed that almost 65,000 properties were put onto the market in December at an average asking price of £306,810.

Miles Shipside, a director and housing market analyst at Rightmove, said the recent surge in house prices was down to the increased political stability in the UK following December’s General Election and the following easing of Brexit uncertainty.

“These statistics seem to indicate that many buyers and sellers feel that the election result gives a window of stability,” said Mr Shipside. “The housing market dislikes uncertainty and the unsettled political outlook over the last three and a half years since the EU referendum caused some potential home movers to hesitate.

“There now seems to be a release of this pent-up demand, which suggests we are in store for an active spring market, with more properties being listed by new sellers than we have seen in recent years.

“One factor behind the upwards price pressure has been the shortage of property coming to market, with 2019 numbers down by 19% on 2018 and some would-be sellers postponing their moves until they judge the outlook to be more certain. This month sees new seller numbers still down on the prior year, but by a less dramatic 10%.

“While there may well be more twists and turns to come in the Brexit saga, with London prices now rising again and not enough properties to satisfy this buyer demand, there is an opportunity for sellers to get their property on the market for spring move unaffected by Brexit deadlines.”

Tom Bill, head of London residential research at estate agent Knight Frank, said: “The reason for this uptick includes the relatively benign global economic backdrop, ultra-low mortgage rates, the currency discount and the fact prime residential markets have re-prices in response to political uncertainty and tax changes.

“In the final quarter of last year, there were 10 new buyers for every new property listed in prime central and outer London, the highest ratio in more than 15 years.”

Source: Money Expert

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Wales Continues to Experience House Price Growth

House prices in Wales have reached an all-time peak, with the average house price across the country now £193,254, despite a drop in overall sales in 2019.

The figures have been released from Principality Building Society’s Wales House Price Index for Q4 2019, which demonstrates the rise and fall in house prices in each of the 22 local authorities in Wales.

In 2019, the average house price in Wales grew by 3.3%, a £6,237 rise since December 2018 driven by first time buyers and holiday homes. Over the quarter in Wales (October – December 2019), house prices rose by 1.7%.

Despite house price growth in 2019, house sales were down by 6% in 2019 compared to the previous year. The reduction is likely to be due to the uncertainties associated with Brexit and then latterly the December General Election.

“It’s been a decent year for average house price growth in Wales, mainly supported by historically low interest rates, a shortage of housing supply and relatively high employment. First time buyers were the driving force behind housing sales, with holiday homes also performing well.

“Although Brexit uncertainty and the General Election had a greater impact on the housing market in the south of England, sales were still down by 6% in Wales in 2019 compared with 2018. Now that there is a bit more clarity politically, we will wait to see if house sales pick up in 2020, although we anticipate continued modest growth in terms of house prices as a whole.”

 Denman, Chief Financial Officer at Principality Building Society

At the end of 2019, eight local authority areas established new peak prices – Bridgend (£180,988), Denbighshire (£192,665), Gwynedd (£190,868), Merthyr Tydfil (£141,657), Monmouthshire (£298,618), Rhondda Cynon Taf (£142,733) and Swansea (£188,417).

Principality’s House Price Index figures show that the largest decrease in sales in Q4 2019 compared to Q4 2018 have been flats, down by 32.6%, followed by detached properties which were down by 12.5%. Semi-detached sales reduced by 9.6%, with terraces down by 6.5%, which supports indications that first-time buyers are now more attracted to terraced and semi-detached properties, rather than to small city centre flats.

In the past decade (December 2009-December 2019), house prices in Wales have risen by 24.5%. Over this same 10-year time span, the CPIH index for consumer price inflation has increased by some 22.6%. This means that the average house price in Wales has grown in ‘real’ terms by just 1.9% in the past decade.

Cardiff tops the list with house price growth of 41.2% for the decade, followed by Torfaen at 37.7% and Newport at 33.4%. The top nine authorities in terms of growth are all located in the south-east corner of Wales – which may indicate the extent to which Cardiff, and the Severn Bridge tolls, have had an impact on housing demand, and therefore house prices, in this area over the last 10 years.

The ‘top’ location for house price growth in the north of Wales is Denbighshire, at 23.5%.

By MARK POWNEY

Source: Business News Wales

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UK confidence signs grow as Bank of England nears rate decision

British households grew more confident about their finances and a measure of house prices rose by a record amount for January, according to surveys which added to other signs of a brightening mood in the economy since last month’s election.

Ten days before the Bank of England decides whether to cut interest rates, the surveys published on Monday suggested that some of the uncertainty that has weighed on the economy has lifted after Prime Minister Boris Johnson’s big election win.

IHS Markit, a data firm, said its Household Finance Index rose to a one-year high of 44.6 in January from 43.2 in December, chiming with other sentiment surveys from both businesses and consumers that have shown an increase in optimism.

Earlier on Monday, property website Rightmove said asking prices for houses increased in January at a record pace for the month, up 2.3% compared with December.

Still, BoE officials are likely to want to see whether the cheerier mood has translated into actual spending as they weigh up whether to cut rates on Jan. 30.

“What data there has been released capturing the post-election period suggests that the outcome has had a positive effect on consumer and business sentiment,” analysts at RBC said in a research note.

“Our view remains that a majority of (BoE officials) will prefer to wait for evidence of how the economy is responding to the outcome of December’s election and the removal of near-term Brexit uncertainty before deciding on a policy move.”

Money markets currently price in a roughly 65% chance that the BoE will cut interest rates on Jan. 30, although economists in a Reuters poll of economists published last week are more skeptical. Sixty out of 68 forecast no change to rates.

Investors will be watching Friday’s “flash” IHS Markit/CIPS purchasing managers’ indexes carefully for an early indication of the economy’s health this month.

Retail sales data last Friday showed an unexpected drop in December and investors will be eyeing Tuesday’s official labor market data for November carefully.

“Latest survey data certainly show some post-election bounce for UK households, with the headline index up to a one-year high and house price expectations at their strongest since October 2018,” Joe Hayes, an economist at IHS Markit, said.

Weakening inflation had helped to ease pressure on living costs, the survey showed.

However, a separate index measuring households’ expectations of future financial wellbeing slid back into negative territory in January, as gauges of perceptions of workplace activity and income weakened.

The proportion of households expecting a BoE rate cut “at some time” increased to 23.1%, while those expecting a rate hike in the next three months went down slightly to 19.5%, IHS Markit said.

Editing by William Schomberg and Andrew Heavens

Source: UK Reuters

BTL mortgage availability Almost half One in 10 North West Stamp Duty holiday Buy-to-let 5-year fixed BTL mortgages buy to let investment areas UK property investment locations buy-to-let lenders BTL properties buy-to-let landlords Number of UK buy-to-let landlords buy-to-let limited companies
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The cost of 5-year fixed BTL mortgages falls

The cost of 5-year fixed buy-to-let mortgages has resumed a downward trend, Property Master’s January 2020 Mortgage Tracker has found.

The biggest month-on-month fall in cost was for 5-year fixed rate buy-to-let mortgage offers for 50% of the value of a property, falling by £15 from December to January.

Angus Stewart, chief executive at Property Master, said: “We did detect the buy-to-let market, as with many other sectors, was holding its breath until the election was out of the way.

“Now with such a clear, decisive victory we would expect confidence to return and our latest research has shown that this is being seen in a fall in the cost of borrowing.

“Most of this downward pressure on mortgage rates is though from greater competition amongst lenders for good business.

“A lower Bank of England base rate – which may now be on the cards – would give lenders scope to cut more deeply.

“Balancing out the good news of lower borrowing costs though there is for 2020 a list of tax and regulatory changes that will hit landlord profits.

“The traditional tax relief on mortgage interest will finally be phased out in April 2020 whilst those landlords that are renting out their own home will find from this year, they will be subject to full Capital Gains Tax when they come to sell.

“Meanwhile landlords will have to ensure their properties meet Minimum Energy Efficiency Standards to a new level this year and the ban on tenancy fees will be extended to all existing tenancies.

“Any reduction in borrowing costs will therefore be very welcome indeed.”

In regards to 5-year fixed rate offers for 65% of the value of the property, cost fell month-on-month by £11 while 5-year fixed rate offers for 75% of the value saw a monthly decrease of £3.

Meanwhile 2-year fixed rate buy-to-let mortgage offers for 65% and for 75% of the value of a property fell by £3 per month each from December to January.

By Michael Lloyd

Source: Mortgage Introducer

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UK house prices: Post-election surge breaks records

The decisive result of the General Election sparked a record-breaking surge in UK house prices in December and January, in the latest sign that the UK housing market has been revitalised by a “Boris bounce”

There was a 2.3 per cent monthly surge in the average price of property coming to the market between 8 December and 11 January, the largest jump ever for that time of year since Rightmove records began in 2002.

Nearly 65,000 properties were put on the market during the period, meaning most were advertised for sale following the General Election on 12 December, according to the property platform’s House Price Index.

There has also been a jump in buyer demand since the Conservative election victory.

Enquiries to estate agents between 13 December and 15 January were up 15 per cent compared to the previous year, with an extra 1.3m buyer enquiries following the election.

The number of sales agreed spiked by 7.4 per cent during the same period as buyers made the most of the renewed political uncertainty offered by the election result.

Rightmove director and housing market analyst Miles Shipside: “These statistics seem to indicate that many buyers and sellers feel that the election result gives a window of stability.

“The housing market dislikes uncertainty and the unsettled political outlook over the last three and a half years since the EU referendum caused some potential home movers to hesitate.

“There now seems to be a release of this pent-up demand, which suggests we are in store for an active spring market.”

London’s property market has also benefited following the General Election, as the capital saw a sharp increase in buyer interest and sales prospects. In December, 31 per cent of chartered surveyors saw a rise rather than a fall in enquiries from new buyers, up from minus 12 in November, according to the latest Rics data.

“We have absolutely seen a post-election bounce, quite substantially actually,” Marc von Grundherr, a director at Benham & Reeves in London, said.

“Things usually quieten down before Christmas, but we had three times the number of offers in the last two weeks of December than the first two weeks.

“People have been waiting for stability, and the moment it arrived, confidence in the market has increased significantly.

“There has been a dramatic Boris bounce, so to speak, with real optimism among buyers still getting good value. But it’s also not a bad time for sellers as stock levels are still relatively low.”

By Jessica Clark

Source: City AM