Oxford
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Oxford best city for buy-to-let investment

Aldermore has named Oxford the best city for buy-to-let investment in the UK.

The city emerged top of 25 analysed in the bank’s Buy to Let City Tracker, with Manchester, Edinburgh, London and Norwich making up the rest of the top five.

Oxford’s biggest selling point for private landlords was that it was one of the largest private sector rental markets in the UK, with 28 per cent of all residents renting privately.

The city’s average monthly rent for a room was £596, it has low levels of vacancy and average property prices have grown at 4.8 per cent a year over the past decade.

The tracker analysed five measures of buy-to-let investment desirability. They were average total rent, best short-term returns through yield, long-term return through house price growth over the past decade, lowest number of vacancies as a proportion of total housing stock, and percentage of population renting.

The five cities ranked lowest on the list were Derby, Sheffield, Bradford, Newcastle and Wolverhampton.

Strong down south
Regionally, the south of England appeared strongest overall, with good long-term investment prospects. Bristol averaged annual house price rises of 4.8 per cent over the ten-year period, the same as Oxford.

The Midlands was revealed to be a mixed market, with Nottingham showing impressive short-term yield of 7.3 per cent.

Yorkshire was less strong overall, with lower average prices per room and below average yields.

“The number of people renting in the UK has grown rapidly, by 1.7 million in 10 years, and private landlords are increasingly a central part of the housing market,” said Damian Thompson, director of mortgages at Aldermore.

“The housing market is made up of multiple small markets with their own conditions and challenges.

“Regulatory changes and persistent economic uncertainty have affected regions differently and landlords need backing and advice from lenders,” Thompson added.

Written by: Liz Bury

Source: Your Money

Scotland Buy to let property investors Advisers
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Scotland offers the quickest return on buy-to-let investment

Scotland offers the quickest return on buy-to-let investment, London estate and letting agent, Benham and Reeves has found.

Benham and Reeves looked at average house price plus the cost of buy-to-let stamp duty and annual rent and ranked each area on the number of years it would take for this annual rent to recoup the cost of buying in each area and paying stamp duty.

Scotland offers the quickest return, with the annual rent returning the original asking price in 17.7 years. Northern Ireland was the second quickest at 18.9 years, followed by England (25 years) and finally Wales at 26.4 years.

Marc von Grundherr, director of Benham and Reeves, said: “Buy-to-let investment is a complicated business, even more so given the changes to the sector of late, however, the primary indicator of a good investment is always going to be the rental yield available.

“While a buy-to-let investment includes all sorts of additional concerns such as contingency budgets, capital growth and so on, we wanted to highlight on a more digestible level where offers a good investment option when it comes to recouping the cost of that investment via your rental income.

“What this research demonstrates is that while buy-to-let remains a lucrative business despite the government’s attempts, it should be viewed as a long-term one and not a method for making a quick buck.

“For those serious about the sector whether it be as a professional or amateur landlord, it’s important to understand the commitment before diving in if you wish to see a profit.”

In the capital, Tower Hamlets is the best buy-to-let investment for the fastest return, with annual rental income taking 21.4 years to return the average house price and stamp duty costs of £452,821.

Barking and Dagenham (22 years), Newham (23 years), Greenwich (23.5 years) and Enfield (25.7 years) were also amongst some of the best options in the capital.

With Scotland and Northern Ireland home to the quickest return on a top level, it’s no surprise that they account for the top three quickest areas in the UK, with Glasgow the quickest of them all at 13.3 years, followed by Belfast at 15.8 years and Aberdeen at 17.8 years.

Nottingham was the quickest area in England to see rental income recoup the cost of buying a property at 18.4 years, followed by Newcastle at 18.5 years.

By Michael Lloyd 

Source: Mortgage Introducer

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Buy-to-let remains solid investment

Buy-to-let remains a solid investment with demand for rental housing stronger than ever, Andrew Turner, chief executive at specialist buy-to-let broker Commercial Trust, has argued.

He said that it was inevitable that tax changes, which could potentially suppress profitability in the short-term, would impact upon the perceived desirability of buy-to-let.

Turner said: “The expectation was that this would be most keenly felt by those with fewer properties, because adjusting to the changes would be a more painful process for new investors or those with less experience.

“However, the simple fact is that buy-to-let remains a solid investment option, with strong potential for an attractive and profitable return on capital invested.

“Investors should not be deterred from buy-to-let. Demand for rental housing is stronger than ever, the cost of debt remains relatively cheap and the housing shortage is likely to continue. Even so, any investment decision requires care and expertise.

“Many headlines have focused on one and two property investors who have left the market because they have found it difficult to adjust. The real story has really not been about buy to let becoming unattractive as an investment option.”

Data from UK Finance indicated an evolution in buy-to-let, rather than a mass exodus.

Jackie Bennett, director of mortgages at UK Finance, revealed in November that forecasts for 2018 buy-to-let purchase activity were likely to fall about £3bn short of expectations.

She said: “This is undoubtedly the impact of various tax, regulatory and legislative changes that have happened to landlords in the buy-to-let sector.”

However, Bennett went on to add that buy-to-let remortgaging exceeded forecasts for 2018, with lending likely to reach £27bn, representing a £3bn surplus on what was anticipated.

Turner added: “The market continues to grow and in Q2 2018 increased by 6% over 2017 levels. UK Finance statistics revealed that much of this growth was in remortgages, which grew by 15%, while purchases dipped by about 12%.

“In early August 2018, the Bank of England decided to increase rates by 0.25%. Although there has been limited market reaction so far, I expect to see market rates increase, because margins are wafer thin.

“The Bank of England has said as much itself, with repeated messages that rates are anticipated to rise gradually over the long-term.

“Landlords have responded to this and there has been significant interest in fixed rates, useful to guard against rate rises.

“Investors are likely to continue to do this as their renewal dates come up and therefore I’m sure the remortgage market for buy-to-let will remain buoyant over the coming months.”

Source: Mortgage Introducer

Tax Changes
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Bank Of England Reports Tax Changes Harming Buy To Let Investment

Tax and regulatory changes are negatively impacting the buy to let sector according to the new data from the Bank of England.

The value of mortgages taken out by landlords has fallen again during the second quarter of the year in comparison to the same period of 2017. Since 2016, buy to let lending has fallen dramatically. The introduction of the 3 per cent stamp duty surcharge, as well as the phasing out of mortgage interest relief and the 10 per cent wear and tear allowance has seriously impacted landlords.

The data released yesterday by the Bank of England noted a decline in both new buy to let lending as well as remortgaging by landlords. This is in spite of the fact that the outstanding value of all residential loans continued to grow, increasing in the second quarter of 2018 to £1,417.2 billion, which is up 3.8 per cent year-on-year.

New loan commitments that were agreed to advance in the coming months during Q2 this year reached a peak that had not been seen since Q1 2008, according to the figures from the Bank of England.

However, the overall proportion of remortgaging and buy to let loans in particular have fallen in recent times, according to statistics. Buy to let mortgages accounted for a mere 13.1 per cent of new lending. This change is largely down to recent regulatory and tax changes in the sector.

Founder of mortgage platform Dashly, Ross Boyd, spoke out about the results: ‘Where homeowners tread, landlords are continuing to choose not to follow. For investors it’s more of the same, with the decline in buy to let lending since the first quarter firmly against the run of play. It’s more evidence of a slowdown precipitated by hostile tax changes in recent years that have left landlords licking their wounds.’

Source: Residential Landlord