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UK buy-to-let investor count hits 2.5 million

The number of UK buy-to-let investors in the market reached 2.5 million in the latest tax year, an increase of 5% year-on-year, research by London estate agent ludlowthompson has found.

The number of investors in the market increased by 27% in the past five years, up from 1.97 million in 2011.

Stephen Ludlow, chairman at ludlowthompson, said: “Rising numbers of landlords shows the enduring appeal of buy-to-let, particularly in London.

“The long-term picture for the buy-to-let market remains strong. As a ‘London-leaning’ Brexit looks more likely, a final deal will focus on strengthening the appeal of the capital as a go-to destination for overseas professionals, graduates and students alike.

“Our own figures underline the strength of London’s attraction with a significant increase in rental applicant numbers since the start of 2018. In addition, job creation in the capital remains healthy, its social scene is world-class and new, better transport links continue to come online.”

Source: Mortgage Introducer

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Buy-to-let mortgage costs are rising

The cost of most mainstream buy-to-let mortgages is starting to climb, according to new data from Mortgage Brain.

Over the past three months, since Base Rate rose to 0.5% from 0.25%, the cost of a two-year buy-to-let tracker with a 60% and 70% LTV, is now 3% higher. With a current rate of 1.79% and 2.14% respectively (as of 1 February 2018), the 3% rise equates to an annualised increase of £216 on a £150,000 mortgage.

The cost of an 80% LTV two-year fix at 3.44% is now 2% higher than it was three months ago, while its 60% and 70% LTV counterparts, and a 70% LTV three-year fix, are all 1% higher than they were at the beginning of November 2017.

Longer-term deals are faring better with Mortgage Brain’s latest data showing a 2% reduction in cost over the past three months for a 70% LTV five-year fix. For the same product with a 60% and 80% LTV, the cost reduction is 1%.

Rise in product numbers

Despite the recent fluctuations in rates and costs, the buy-to-let sector has also seen the strongest performance in terms of product numbers and availability over the past year.

An additional 721 products were introduced into the buy-to-let market during 2017, representing a 32% increase in overall product availability – up from 2,238 in January 2017 to 2,959 as of 15 January 2018.

Mark Lofthouse, CEO of Mortgage Brain, commented: “It looks like the Prudential Regulation Authority changes, coupled with what could be seen as the start of a number of interest rate rises, is starting to affect the cost of mainstream BTL mortgages.

“Buy-to-let product numbers are at a new high, however, and there are still pockets of cost reductions and savings to be had for potential landlords and property investors. With the BTL market set to become even more complex in 2018 though, we might be on the start of a new path in terms of mortgage cost movement compared to the past few years.”

Source: Mortgage Finance Gazette

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ARLA issues stark warning – “Renters are in for a rough ride in 2018”

ARLA Propertymark has issued a downbeat report on the lettings sector’s start to 2018.

Its report on the market’s performance in January says the number of properties letting agents managed fell by eight per cent with 184 per branch compared to 200 in December.

Meanwhile the gap between supply and demand widened in January with more prospective renters coming onto the market; on average, letting agents registered 70 prospective tenants per branch in January, compared to just 59 in December.

The association says landlords kicked off 2018 with contract negotiations as one in five tenants experienced rent hikes in January, compared to 16 per cent in December.

It says that while this paints a bleak picture for renters looking into 2018, it’s actually down year on year. In January 2017, 23 per cent on tenants had their rents increased, and 30 per cent were subject to rent rises in January 2016.

“Renters are in for a rough ride in 2018. Housing stock is falling as rising taxes continue to force established landlords out of the market and deter entry into the sector – and the volume of renters is increasing as the cost of buying a home is moving further out of reach for many” explains David Cox, ARLA Propertymark chief executive.

“The fact that one in five tenants are experiencing rent increases is just another blow. Ultimately, until the prospect of investing in the buy-to-let market is more attractive for prospective landlords, and stock subsequently increases, tenants will continue to feel the burn” he adds.

Source: Letting Agent Today