90% BTL of purchase price subject to max 80% of undervalue transaction

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Magellan Homeloans is offering a 90% of purchase price (subject to max 80% LTV) of undervalue transactions for Buy to Let borrowing. The launch of this new product range will initially be available through selected intermediaries rather than directly to the public.

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Does the truth not matter to Shelter?

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Does the truth not matter to Shelter, or does the end justify the means?

Shelter recently issued a document in partnership with the National Housing Federation (NHF) called “Stop DSS discrimination�

I quoted this at length

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Nothing will stop the growth in renting

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Rental Growth:

Hamilton’s International researchers claim that recent policy changes by government will do nothing to stop the growth of renting.

Yes, landlords are buying fewer homes, taking out fewer mortgages, and landlords have sold 50,000 more rental properties than they bought, following the policy changes, but, say the researchers, there are many other routes into providing new lettings.

Figures obtained by Hamilton’s show that since the introduction of the 3% Stamp Duty Land Tax (SDLT) surcharge in April 2016, landlords have indeed sold 50,000 more homes than they bought. New purchases now make up a smaller part of the market, with landlord investors buying just 12.3% of new homes in 2017, down from 16.4% in 2015.

But despite landlords selling more homes than they bought, the private rented sector has continued to grow. Between April 2016 and 2017 the number of households renting had actually increased by 164,000, that’s 3% more than 2016.

This, say Hamilton’s researchers “is one reason why we forecast the sector to continue growing and reach six million households by 2025. By 2022, 20.5% of households will be renting in Great Britain, up from 19.4% today.�

This conundrum may come as a surprise to many when investor activity has fallen, but there are greater forces at play say Hamilton’s. “Higher demand for rental accommodation is being driven by longer term changes in demographics and the housing market, many of which aren’t unique to the UK. House prices consistently growing above incomes has meant we’ve seen a steady decline in home ownership and growth in demand for renting.�

Other Routes to Lettings

There is a tendency for a larger number of these homes to come onto the rental market when property sales slowdown, so buy-to-let mortgage applications can be misleading. In 2017, Hamilton’s estimates that 80,000 homeowners who attempted a sales ultimately decided to hold on to their property and put it on the rental market instead.

In other cases there are homes where couples, who are both home owners, decide to move in together, people relocate for work and rent out, or they keep an inherited property as an investment and then rent it out.

Hamilton’s say statistics from the ONS show that at least 200,000 homes change ownership through inheritance every year. Some of these homes are sold or used by heirs of course, but other research from UK Finance shows that around 16% of landlords acquired their property without a purchase, which includes inheritance.

Although still relatively small suppliers of rental property in terms of overall volume, and they target a specific sector or the market, namely higher priced rentals, new build and built-to-rent is becoming a significant provider. Particularly in the major UK cities, blocks of flats, purpose-built to rent, owned and operate by large institutional investors, like pension funds are springing up.

So, as well as those landlords buying for cash, perhaps also from on inheritance or a business sales, these other sources of rental property coming to market, not dependent on individual landlords taking out mortgages, explains how the sector can keep on expanding, despite some landlords selling up.

Incredible wealth

Hamiltons says there’s an incredible amount of wealth tied up in housing, with approximately 50% of total UK wealth tied up in landlord and property, according to The ONS. This, they think will continue to insulate it from change.

For 23 out of the last 25 years is seems, cash owners outnumbered those who need a mortgage. The same is true for Hamilton’s forecasts for the growth in the number of households renting from landlords. Most small-scale landlords have no debt on their rental property.

Around 65% of investor purchases were made with cash in 2017, that’s £21 billion worth of property according to the research. This sheer volume of cash has largely been built up through high house price inflation over a 25 year period. This mass of cash in the market, supported by increasing institutional interest, is insulating the rental market from the policy changes. Hamiltons International thinks this creates a firm foundation for the renting to continue to grow, particularly as the demand for rented homes will continue to rise.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Nothing will stop the growth in renting | LandlordZONE.

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ARLA Propertymark chief executive to address RLA Future Renting conference

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David Cox, Chief Executive of ARLA Propertymark will address the RLA’s Future Renting conference in London next week. David joined ARLA, Association of Residential Letting Agents, in January 2014 and has worked alongside a board of industry professionals to transform ARLA into ARLA Propertymark, which protects consumers through measures including Client Money Protection and campaigns for […]

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Is there a legal time limit before I can make demand to guarantor?

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I have a tenant of 14 months who has gradually worn me down (complaints from neighbours & not paying his rent on time) to the point of issuing him a section 21 four weeks ago!

He was initially on a 6 month AST all DPS

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RLA reveals new Training Academy

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The new RLA Training Academy is launched today – improving access to the comprehensive eLearning offer and introducing new courses to help you manage your portfolio, no matter how large or small. With the legislative environment growing more and more complex, increasing numbers of landlords, agents and property professionals are turning to the RLA to […]

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Council lose a perfectly good tenant his home – Fergus Wilson

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The final outcome was that the 1st Tier Property Tribunal Quashed the Notice.

This has now finally come to an end when the 1st Tier Property Chamber gave its final  decision.

It may be of interest to many landlords.

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13 reasons to invest in Birmingham

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The Birmingham story is one that continues to get more and more compelling, and this is why so many investors are looking away from London and toward Birmingham, to achieve long term capital growth, whilst also generating good levels of income.

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Evictions get landlords a criminal conviction and £11,000 fine

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Illegal Eviction:

A landlord company has been ordered to pay just under £11,000 after illegally evicting a Bridlington man from his home in September 2016.

The unnamed private tenant was shocked to find, on his returning home, that the locks to his rental property had been changed and all his belongings had been removed.

The man had been living at the rental property with another resident at Sandringham House, The Crescent, Bridlington, with another tenant and had previously been given a one-week notice to leave.

The other resident subsequently claimed to be a live-in landlord and that he was entitled to give the man a one-week notice to leave.

The directors of the company landlords Fiddlers Investment Ltd were advised by the council that if they evicted the man with just one weeks’ notice they could be prosecuted as it is a criminal offence under the Protection from Eviction Act 1977

However, Fiddlers’ directors, Tracy Hollwarth and Barrie Craven, along with its regional manager, Sheridan Brown, ignored the Council’s advice and went ahead with the eviction.

Later Council officer investigations revealed that the other resident, who actually issued the notice to the man, was acting on instructions from the Fiddlers Investment Company.

Following action by the Council to prosecute Fiddlers, the landlord company was charged with two offences of unlawful eviction as they also evicted the other resident as well. The directors pleaded guilty at Beverley Magistrates Court and were fined £4,000 and ordered to pay costs of £6,865. The total came to £10,865.15.

East Riding of Yorkshire Council’s Private sector housing and safety manager, Chris Dunnachie, had said:

“‘The council has a duty to protect tenants to make sure they are safe from illegal evictions. Some landlords fail to accept that, despite being their property, each and every room or flat within that property is a person’s home and they have no right of entry without the tenant’s agreement, and must follow clear legal procedures to ensure their tenants are given appropriate notice to leave.

“We will deal with any landlord, letting agent or Property Company who does not abide by the law. It was disappointing that in this case, Fiddlers Investments Ltd chose not to take officer’s advice.�

Illegal eviction results in criminal record

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Evictions get landlords a criminal conviction and £11,000 fine | LandlordZONE.

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Why didn’t Shelter find somewhere for Stephen?

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Shelter’s campaign with Rosie featured in a BBC News article back in February.  I quoted this at length, and linked to it, last week: Click Here

Today I looked at the comments that had been put under the BBC’s article.

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