D_Property

The majority of residential landlords in London and elsewhere in the UK do not intend to buy or sell more properties to let in the next five years, new research has found.

Three quarters are not planning change but of those who are some 13% in London plan to buy more properties and 9% to sell. This compares with 8% planning to buy and 15% to reduce their portfolio outside of London, according to the report from the Council of Mortgage Lenders (CML).

The survey set out to gain an insight into how landlords are coping with changes in the lettings sector and how tax is affecting buy to let property owners.

The research found that, in many ways, landlords with property in London were very similar to landlords in the rest of the UK. But the results of this survey suggest that London landlords tend to make different decisions about financing, managing and expanding their properties.

Compared to the rest of the UK, landlords with properties in London have higher disposable incomes, are more likely to be full time workers, and typically become landlords at a younger age.

In London, about 50% of landlords report at least £1,000 of monthly disposable income while, outside the capital, only one third report this level of income. London landlords are 27% more likely to be in full time employment, and 37% less likely to be retired than landlords in the rest of the country.

In London, landlords are about 25% less likely to start out as an accidental landlord, that is a landlord who has inherited rental property or who is letting a dwelling because it cannot be sold, rather than through choice. They are also about 50% more likely to become a landlord after moving in with a partner who also owns their own home.

The average age of first time landlords in London is 42, compared to 47 outside the capital and when it comes to types of property owned, London landlords are more likely to let out flats and less likely to be letting houses.

In London, 79% of landlords own flats to let, while 47% have houses of some type, including bungalows. In the rest of the country, just 40% of landlords rent flats, while 84% rent houses.

The distribution of property ownership among landlords in London is similar to the rest of the UK. Some 60% of those in London own a single property, while a further 20% own two properties – mirroring the distribution in the rest of the UK. Likewise, about 10% of landlords in London own five or more properties, similar to the rest of the UK.

Landlords in the capital are just as likely as those elsewhere to offer tenancies of more than 12 months. Almost 60% of UK landlords indicated that they would offer tenancies of longer than a year, with little variation across regions.

The research also found that landlords in London are more likely to have purchased with a mortgage and to say they understand the impact of forthcoming tax changes affecting the sector. Some 15% of London landlords purchased at least one rental property with cash. This rises to 23% outside of London.

Almost half of landlords in London had a buy to let mortgage on at least one rental property, compared to 35% outside London. This ties into the demographic profile of London landlords, as they tend to have higher disposable incomes and are more likely to be employed.

London landlords are marginally better informed of tax changes that will affect the private rented sector. The report suggests that this may reflect the higher incomes and wider prevalence of buy to let borrowing in London particularly as those landlords would be most affected by proposals to reduce the amount of mortgage interest that can be deducted against tax.

The use of letting agents is more common in London, but London landlords are less likely to opt for full management through the agent. Some 70% of London landlords employ an agent in some capacity, with about 40% of these contracting the agent to manage all aspects of the business, including finding a tenant, collecting rent, and maintaining the property. Outside London, only 60% use an agent, although about two-thirds of these opt for full management through the agency.

Using a limited company structure is still fairly uncommon, both in and out of London. Only 6.2% of landlords in the capital are incorporated, or planning to become so, compared to 2.8% outside London.

Source: www.propertywire.com

February 17, 2017
manchester-1631200_1920

Manchester and Salford see biggest rise in rental yields

The majority of residential landlords in London and elsewhere in the UK do not intend to buy or sell more properties to let in the next five years, new research has found. Three quarters are not planning change but of those who are some 13% in London plan to buy more properties and 9% to sell. This compares with 8% planning to buy and 15% to reduce their portfolio outside of London, according to the report from the Council of Mortgage Lenders (CML). The survey set out to gain an insight into how landlords are coping with changes in the lettings sector and how tax is affecting buy to let property owners. The research found that,…
February 17, 2017
building-1841299_1920

Manchester and Salford see biggest rise in rental yields

At the end of 2016, towns in England’s North and Scotland saw the biggest increase in rental yields, hitting up to 4.3% whilst London averaged out at 3.2%. Properties across Manchester and Salford saw average yields of 6.7% and 6.6%, while Cambridge only climbed up to 2.7%, the latest buy-to-let index revealed. To get the data, peer to peer lending platform Kuflink analysed the average house price and rent in 50 of the country’s major towns and then figured out the average rental yield for every single location. Manchester came out as Number One with an average rental yield of exactly 6.73% and was closely followed by neighbour Salford ar 6.68%. Other areas in the North…
February 16, 2017
british-flag-1907933_1920

Industry reacts to latest House Price Index

The Land Registry and ONS have just released their final house price index for December 2016 showing an annual increase in house prices of 7.2%, with prices up 1.4% between November and December, to finish one of the toughest years in recent memory for UK property on a strong note. Founder and CEO of eMoov.co.uk, Russell Quirk, said, “There has been a number of sceptics where the state of the housing market in 2016 is concerned and although the likes of Halifax and Nationwide provide a snapshot of performance, the fact they are based on mortgage approval data, not cold hard completions, will always leave room for doubt. But today’s data from the Land Registry provides…
February 16, 2017
castle-1142178_1920

60% of buy-to-lets are bought mortgage free

New figures have now revealed that the amount of landlords buying properties in cash has reached new record levels. Letting agent Countrywide has revealed that 61% of buy-to-let purchases in the UK last month were made without a mortgage. Overall, the highest level of cash transactions was found in England’s North, which is seen as a direct reflection of the lower prices. In more detail, Countrywide’s index for January showed figures of 70% in the North-West, 68% for Yorkshire and the Humber and 67% in the North East. Further down south, however, landlords have to rely more heavily on mortgages. Overall, only 42% of house sales in London are financed with no mortgage needed. Countrywide also…
February 15, 2017
money-18554_1920

Home prices up marginally in England but fall in Scotland and Wales at start of 2017

Average home prices increased marginally in England in January month on month and fell in Scotland and Wales with a north south divide showing in the latest published index. Average prices in England increased by 0.3% compared to December and fell by 0.2% in Wales and fell by 0.3% in Scotland, according to the Home.co.uk index. Price growth in England was led by a 1.9% month on month rise in the East of the country, taking the average price to a new all-time high if £348,651. But Greater London saw the weakest growth in England with a monthly rise of 0.1% and prices in the capital are now 1.2% lower than a year ago. The overall…
February 15, 2017
home-1738408_1920

Bank promises to pay first-time buyers’ stamp duty – so what’s the catch?

A major lender has offered to pay first-time buyers’ stamp duty – in exchange for a higher rate of mortgage interest. Many mortgage lenders offer “cashback” to buyers (usually a small sum released when the mortgage deal completes), but Barclays’ new mortgage goes further. Here the cashback element is designed to pay the buyer’s stamp duty on properties worth up to £250,000. High stamp duty is a barrier to many first-time buyers who spend years saving up a house deposit and struggle to raise the extra amount to pay the upfront tax. Seven in 10 buyers are now affected by the tax, which applies on to properties costing more than £125,000, and the cost of paying…
Restricted Content
The contents of this website are intended only for investors from certain qualifying classes (“High Net Worth Individuals”, “Self-Certified Sophisticated Investors” and “Restricted Investors”). To access the full contents of the site you must first register in one of these categories.
Please confirm that you are a suitable investor before proceeding. If you are unsure whether you meet the specific criteria or not, you can check the definitions here.
Will be back soon