Cost of 5-year fixed rate BTL mortgage falls

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Buy-to-Let Mortgages:

Latest research out today (Wednesday, April 3rd) from online
mortgage broker, Property Master, the digital start up that uses algorithms to
match the requirements of individual private landlords against the entire
buy-to-let mortgage market,  reveals that
the cost of many popular five-year fixed rate buy-to-let mortgages has fallen
back again after a sharp month on month spike February to March.  Many of these mortgages are now cheaper than
they were a year ago in April 2018. 
Product fees for five-year fixed rate mortgages have though leapt
year-on-year – sometimes by as much as £335.

Property Master’s April 2019 Mortgage Tracker shows the cost
of five-year fixed rate offers for 50% of the value of a property fell by £8 a
month between March and April.  Year on
year this type of mortgage was down in cost by £28 a month.  The cost of a five-year fixed rate for 65% of
the value of a property fell by £4 a month but by £18 per month when compared
to the cost a year ago in April 2018. 
Five-year fixed rates for 75% of the value of a property remained the
same at £408 March to April but year on year fell by £18 a month.

Almost all the categories of fixed-rate buy-to-let mortgages
being tracked showed a sharp year-on-year increase though in average product
fees.  Fees for a two-year fixed rate for
50% of the value of a property leapt from £714 in April 2018 to £1,599 today –
an increase of £885.  The other largest
increase in average product fee was for five-year fixed rates for 50% of the
value of a property which increased from £1,164 in April 2018 to £1,499 today –
an increase of £335.

The Property Master Mortgage Tracker follows a range of
buy-to-let mortgages for an interest only loan of £150,000.  Deals from 18 of some of the biggest lenders
in the buy-to-let market including Barclays, BM Solutions, RBS, The Mortgage
Works, Godiva and Precise (full list below) were tracked.   Figures for this month’s Mortgage Tracker
were calculated on deals available on April 1, 2019.

Angus Stewart, Property Master’s Chief Executive, said: “It
is good news that the type of deals many landlords favour have fallen back a
little in cost after last month’s increase. 
Better still the headline rate for many of these offers are actually
less than they were a year ago.  However,
there is something of a catch in the increase in many product fees.  Applying for a buy-to-let mortgage can be a
complex process and it is important landlords compare the total cost of the
mortgage they are offered.�

Property Master was launched almost two years ago and aims
to shake up the buy-to-let mortgage market currently served by around 12,000
mortgage brokers.  It has already
attracted financial backing from a broad range of private investors including a
minority stake being taken by LSL Property Services, whose estate and letting
agency brands include Your Move and Reeds Rains.

Property Master has automated what was a manual, complex
process to provide landlords with a free easy to use mortgage search tool which
provides a mortgage quote that is pre-screened against each lender’s specific
and changing criteria.

www.property-master.com

Property Master
launched almost two years ago and is the UK’s first and only digital mortgage
brokerage service for UK buy-to-let landlords. Its innovative approach enables
private landlords to take control of their financing online for the first time
by matching their requirements on Property Master’s unique and complete
database of mortgage information and lending criteria. Founded by a group of
highly experienced financial services professionals, the company is directly
authorised and regulated by the Financial Conduct Authority (FCA).

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Cost of 5-year fixed rate BTL mortgage falls | LandlordZONE.

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Tenants on a 6month AST have no rights to stay longer

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A tenant on a six month Assured Shorthold Tenancy has No Rights other than the right to stay in the house for the Fixed Period. That is made Crystal Clear in the tenancy.

Generally, the Period is Six Months

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NLA Fraud warning to would-be tenants

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The National Landlords Association (NLA) is reminding would-be tenants to be vigilant when looking for somewhere new to live and to avoid getting scammed.

The NLA has been contacted by several people who have been the target of fraudulent activity.

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Section 21 – really as easy as it sounds?

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I have a tenant causing a merry host of issues, but I’m now firmly on the legal (if not expensive) route to get it sorted.

The last part of the process will be to get her to tidy up the tip she lives in.

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Slough landlord receives suspended prison term

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Criminal Record:

A Slough landlord, fifty seven years old Talwinder Singh,
tried to hide whole families in his rented accommodation with no windows, when
his efforts to gain proper planning approval failed.

For this breach of the planning and safety laws Singh received
a 15-month prison term at Reading Crown Court, which was suspended for 18
months.

Singh was ordered to undertake 200 hours of unpaid work over
12 months, and in addition, he was fined £25,000 and ordered to pay £266,177.
The fine represented the rent money and unpaid council tax that he had obtained
by his illegal activities.

Singh had originally applied for planning permission to create
a block of six flats, but was turned down. But he disregarded the ruling and continued
to develop the flats in the building on Waterbeach Road in Slough.  Even though Singh was subsequently served a
planning enforcement notice by the council in September 2010, he carried on
regardless and rented out six flats to tenants.

In his attempt to deceive the authorities, Singh claimed
that he had converted the property to a single dwelling as the enforcement
notice required, and he informed the council accordingly.

Further, Singh had constructed kitchens in the flats which
could be easily removed when council officials visited for inspections, and he
removed windows on his top floor attic flats, which meant that the tenants
living there with children were without natural light.

Despite claiming that this was a single dwelling and paying
council tax accordingly, Singh was charging his tenants individually an
additional council tax fee.

The flats have since been returned to their permitted use as
a single or dual dwelling, according to the original planning permission.

Slough Council’s Director of Regeneration Joe Cart told the Slough & South Bucks Observer:

“People and families in Slough deserve good accommodation
and landlords who are not overcharging them for services they are not
providing.

 â€œSuch a successful
outcome shows how the council will not tolerate such flagrant disregard of its
planning regulations.�

Neil Wilcox, Director of Finance and Resources, added:

“This successful prosecution is a result of a thorough and
painstaking investigation by the Council’s Fraud Team and has led to the
recovery of a significant amount of lost council tax.

“Singh told the tenants he was paying their council tax when
it actually went directly into his pocket.

“He was prepared to inconvenience tenants, some of whom had young children, by removing evidence from the flats and making them go without kitchen facilities, in an attempt to defraud the council.�

[Image show typical loft conversion]

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Slough landlord receives suspended prison term | LandlordZONE.

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Landlord EPC improvements cost cap now £3500

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As of this month Private landlords under MEES regulation are required to pay up to £3,500 bringing properties to the minimum EPC standard of E.

To remain on the exemption register with an EPC rating of F or G Landlords must show the cost of improving the property to an E rating is more than £3,500 plus Vat.

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Licensing costs and admin finishing off some Landlords

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Letter to Nottingham Selective Licensing,

Please pass my words onto the powers that be, so they can see what happens in the REAL WORLD on GROUND LEVEL from us that actually house people.

Screenshot enclosed of Barclaycard message received today.

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5k charged for Right to Consolidate?

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Hi all, I am in process of selling a BTL with Mortgage Express. When my solicitor asked for a redemption statement they wrote back saying below:

“We have the right to consolidate and take all monies. However, on this occasion we will just charge £5k which will be used across overall portfolio.”

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The Co-operative Bank removes tenancy restrictions

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Buy-to-Let Mortgages:

Following a move by Nat West Bank last month, The
Co-operative Bank has now decided to follow suit and remove its restrictions on
its landlord mortgage borrowing.  The
traditional terms and conditions in UK buy-to-let mortgages previously
prevented landlords from letting to tenants who were claiming housing benefit.

The restrictions also usually meant that landlord borrowers’
assured shorthold tenancies (ASTs) must be restricted to a maximum of a
six-month term.

From the 1^st of April the Co-operative Bank across
all its lending brands will no longer expect landlords to follow its previous
terms, although it said that the old wording will remain in some documentation
until a final system update on 19 May.

Co-operative Bank managing director Gordon Soutar had said:

“We are glad to be able to remove this condition to the
benefit of our landlords and prospective tenants who previously may have been
restricted from taking up tenancy due to the inclusion of this letting
condition in our mortgage terms and conditions.

“Our charity partner Centrepoint have raised this issue and
the potential impact that this condition of let could have on the young people
they work with.

“This is not a condition that we want to continue to include
in the mortgages that we offer, and we will no longer enforce these clauses in
our mortgage terms and conditions.�

It is now expected that more banks and mortgage lenders will
now fall into line with the less restrictive terms. This is in the light of new
government policy, which is for landlords to offer longer tenancies and to not discriminate
against benefit claimants.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – The Co-operative Bank removes tenancy restrictions | LandlordZONE.

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Is it possible to predict and prevent property disasters?

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Is it possible to predict and prevent property disasters?

Landlord Insurance:

Analysis of 10 years of property insurance claims suggests
yes

• New research, looking at property insurance claims over 10
years, shows escape of water as number one claim, accounting for 34% of total
claims

• The report has identified a link between incidents for
escape of water and location of the London’s Victorian water mains

• Claims for escape of water peak in autumn/winter but are
at their lowest in April

• Whilst you’re less likely to be broken into in the summer,
this is the time claims for accidental damage increase

• Analysis of trends shows claims for malicious damage,
subsidence, fire and break-ins are on rise

A detailed report analysing 10 years of property claims¹,
released by Hamilton Fraser Total Landlord Insurance (specialist insurance
provider to the private rented sector), has identified escape of water as the
most likely property insurance claim, accounting for 34 per cent of all claims
paid out between 2008 and 2018.

However, in the first of its kind, the research reveals that
the frequency and type of claims can be determined by factors such as a
property’s location or the time of year, which could help property owners think
smarter to predict or minimise damage to properties before disasters occur.

Leaky London

Perhaps unsurprisingly, escape of water, defined as ‘when
water has entered the property by the mains water supply causing damage’ e.g. a
burst pipe, is the most common claim, accounting for 34 per cent of all claims
(2008-2018).

Interestingly, although a higher concentration of claims in
London can in-part be attributed to a greater volume of London customers, the
report identifies a clear link between incidents for escape of water clustering
not only around the Thames, but closely matching the city’s Victorian water
mains.  For example, between 2017-2018
there were 45 reported cases of escape of water along Victorian plumbing lines
in Kensington, 28 in Shepherd’s Bush and 27 in Brixton. 

Seasonal trends

Examining the types of claims against the months they were
made across a ten-year period has also revealed a fascinating seasonal link, which
could be extremely useful to property owners. 
Claims for escape of water increase in autumn/winter owing to
frozen/burst pipes, but are at their lowest in April.

Hamilton Fraser Total Landlord Insurance paid out £751,377
for escape of water in 2011, which was the highest in the last 10 years.  This ties in with Met Office data which shows
at the time, December 2010 was recorded as the coldest December in over 100
years, with the highest number of air frosts in at least the last 50 years².

Other trends identified show that there is a significant spike in fire claims in January, which in rented properties could be as a result of the increased likelihood of tenants leaving power supplies on in unattended properties over the festive period.

Attempted break-ins are very high in January but die down moving into summer, before picking up again from September. This could be because homes are seen as more vulnerable in the winter months when daylight hours are shorter, and opportunists are more likely to look for Christmas presents. This is also evidenced by a lull in break-ins during the summer months as a result of lighter evenings.

Accidental damage also peaks in the summer when people might
be likely to spend more time at home with children off school.

Claim type trends

Removing seasonality as a factor, the data also shows which
claims incidents have been increasing and declining. Interestingly, theft has
been decreasing since 2011, which could show that landlords are perhaps being
more thorough with inventories. 

Claims for underground service, which incorporates pipes,
cables and drains, and accidental damage are also declining. Increasing trends
are malicious damage, subsidence, fire and break-ins. As the most common claims
escape of water and also storm damage remained stable.

Although the UK does not experience storms as frequently as
some other western countries, major (named) UK storms can do significant damage
to homes every year and damage from storms is the second most common claim
type. According to Hamilton Fraser Total Landlord Insurance, 51.2 per cent of
all storm incident pay-outs have been for roof damage.

Eddie Hooker, CEO of Hamilton Fraser, says: “Property
insurance is there to protect against those unexpected eventualities, but
prevention is always better than cure. 
Carrying out this extensive research clearly shows that investment in
property maintenance and taking simple steps, like unplugging unused electrical
items, could prevent an issue arising in the first place helping to keep your premiums
low.�

What does this mean for property owners?

â—�   Although Thames Water have laid 2,300 km of new plastic pipework across Central and North London, there is still work to be done and people looking to invest in property across the Capital may want to research the plumbing infrastructure in their local area

â—�   Escape of water is a common claim across the UK and can occur due to cracked or damaged pipes. Replacing or repairing these could prevent a future claim

â—�    Property owners should consider increasing their security measures prior to winter months to prevent break-ins

â—�    Some fires could be prevented by ensuring all electrical items are switched off when a property is left unattended

â—�    Keeping an eye on the weather forecast and making necessary repairs to broken roofs and fences etc. ahead of storms may also help protect properties from damage

¹ Report analysed 5,000 landlord insurance claims over a 10-year period
https://hamiltonfraser.co.uk/knowledge/property-claims-report/

² Met Office Data https://www.metoffice.gov.uk/climate/uk/summaries/2011/winter

Hamilton Fraser Total
Landlord Insurance is part of the Hamilton Fraser Group of companies, including
mydeposits, Property Redress Scheme, CMP and Landlord Action.  Their award-winning landlord insurance
offering, Total Landlord Insurance, has been specialising in providing
comprehensive cover for landlords since 1996.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Is it possible to predict and prevent property disasters? | LandlordZONE.

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