Across the board fall in fixed rate buy-to-let mortgages…

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BTL Mortgages:

Research out today
(Thursday, September 12th) from online mortgage broker, Property
Master, has revealed another across the board fall in fixed rate
buy-to-let mortgage rates. The fall comes just as the Bank of
England meets for the last time to rule on the base rate ahead of the
October 31st Brexit deadline.

Angus Stewart,
Property Master’s Chief Executive said: “Once again we have seen
the cost of buy-to-let mortgages fall across all the categories we
track. At the moment lenders in this marketplace have a glut of
money to lend.

The current downward
pressure on rates in the money markets means they are able to source
funds cheaply at historically low interest rates. Secondly, some
lenders have also drawn in money from the consumer market by
launching headline-grabbing savings rates which whilst still low are
relatively attractive.�

Mr Stewart
continued: “More generally no-one really wants to predict the
outcome of Brexit but it may be that certainty, one way or another,
is just around the corner. Once the market is more certain about
what is happening this volatility and the bargains it has thrown up
will probably come to an end. Landlords may not have long to
benefit.

Even if a landlord’s
fixed rate is not yet due to expire it would be worth looking at what
is currently available. In some situations, it might be worth paying
to exit an existing fixed rate deal early. With some lenders willing
to hold a new product deal for up to six months there is an
opportunity to apply now and see what happens with rates. It will
pay most landlords to at least review their position while rates are
low.�

Property Master’s
September 2019 Mortgage Tracker shows the biggest fall in monthly
cost was for two-year fixed rate buy-to-let mortgage offers for 50%
of the value of a property. The monthly cost of this type of
mortgage fell by £24 per month August to September. Two-year fixed
rates for 65% of the value of a property fell month on month by £8.
Two-year fixed rates buy-to-let mortgage offers for 75% of the value
of a property fell by £3 per month.

The more popular
five-year fixed rate buy-to-let mortgages also fell across all
categories tracked. The monthly cost of a five-year fixed rate for
50% of the value of a property fell by £14 per month August to
September. Five-year fixed rate buy-to-let mortgages for 65% of the
value of a property fell by £11 per month and five-year fixed rate
buy-to-let mortgages for 75% of the value of the property fell by £6
per month.

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 September 1, 2019.

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.

PropertyMaster. Com

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Across the board fall in fixed rate buy-to-let mortgages… | LandlordZONE.

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Average UK rent now at an all-time high of £970

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THIS August brings with it the label of all-time high rental prices, according to the latest data from HomeLet. The headlines from August 2019’s HomeLet Rental Index are:

The average rent in the UK is now at an all-time high figure of £970

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Can I issue S21 during counterclaim situation?

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Nightmare tenant, arrears, treats the place like a tip etc. Section 8 issued for rent arrears – eventually paid up when case came to court.

Then her legal representative threw back a counterclaim of ‘landlord disrepair’ knowing she had just secured Legal Aid (how the hell this was granted knowing that there was no evidence at this point to show any disrepair

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Possession reform: Case studies wanted

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The RLA is looking for case studies as part of its campaigns work around possession reform and the use of Section 21. The association would like to hear from landlords who have served a section 21 notice at the request of their tenant so they can access social housing.  Specifically, those with local authorities that […]

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Property inspections key to Lib Dem PRS plan

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Proposals for property inspections for rented homes form part of new housing plans announced by the Liberal Democrats. The party detailed plans in a new policy paper – A Fair Share for All – released ahead of its party conference in Bournemouth next week. In addition to inspections and a new regulator for landlords with portfolios […]

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Average Buy to Let makes a return of just £2k a year pre-tax

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The true cost of a being a landlord: Letting platform Howsy has revealed how the profitability of the buy-to-let sector is being squeezed due to the hidden costs of being a landlord, coupled with the financial penalties handed down from the Government via changes to stamp duty tax.

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No mention of PRS attacks

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Shelter have issued a press release responding to MHCLG’s latest statutory homelessness statistics. The figures, as reported by Shelter,  indicate that a household became homeless every 4 minutes in England in the last year (April 2018 to March 2019) and that young people aged 16 to 24 are disproportionately affected by this country’s housing emergency.

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Tenants facing higher rents

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Tenants face higher rents as a result of the demand for private rented housing outstripping supply according to the Royal Institution of Chartered Surveyors (RICS). In its latest survey of the housing market it says demand for private rented housing has increased for an eighth month in a row. This comes as supply continues to […]

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Lib Dem conference agenda calls for abolition of Section 21

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The Liberal Democrats have released the agenda for their 2019 party conference. Click here to download.

The Party looks likely from the agenda document below to confirm support for Conservative policy of banning Section 21 and reforming the court process.

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More landlords investing in HMOs

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HMOs:

Given
the squeeze on buy-to-let landlords’ profits, landlords are looking
for ways to off-set this. As well as investing through limited
companies, which don’t have the same tax regime as individuals,
landlords are looking to HMOs to increase their yields.

The
tax and regulatory measures introduced over the past couple of years
are persuading some landlords to change direction by entering the
more lucrative HMO market.

According
to buy-to-let mortgage provider, Precise Mortgages, reported
by Mortgage Introducer, more than a fifth of their landlord
mortgage applicants (21%) who looking to buy over the next year or
so, are looking to add Houses of Multiple Occupation (HMOs) to their
existing portfolios.

Precision
says that HMOs “are proving to be an attractive proposition in a
time of market uncertainty, with HMO landlords achieving the highest
average rental yields at 6.3%.�

Alan
Cleary managing director of Precise Mortgages, :

“In
a time of market uncertainty, HMOs are an attractive option for
professional landlords looking to maximise yields.

“As
HMOs attract multiple tenancies, gross rental income tends to
outstrip single lets meaning the rental income is more secure if one
tenant leaves a void.

“The
expansion of the HMO sector underlines how experienced landlords are
rebalancing their portfolios.

“It
also demonstrates the opportunity for brokers to work with specialist
lenders who have expertise across the widest product set to support
clients who are reassessing their portfolios.�

Precise
Mortgages extended its HMO criteria back in 2016 to accept properties
with up to eight bedrooms – an increase from the six accepted when
the products were initially launched. It also launched a Limited
Company product as well as improving its criteria for buy to let
landlords in retirement.

Mortgage
brokers are able to submit HMO and Limited Company buy-to-let cases
through authorised packagers, as well as direct with the lender.

According
to Precise:

• Average yields for all property types dropped 0.3% in Q2 and are now
  at their lowest level since 2010.
• The most popular type of property to buy are terraced houses, with
  half of landlords planning to buy a terraced property.
• However, 40% of landlords also plan to sell terraced houses in the
  year ahead.
• By contrast, just 8% of landlords holding HMOs in their portfolios
  plan to sell them.
• Blocks of flats are also set for growth, with 8% of landlords
  planning to buy compared with just 5% planning to divest.

Alan
Cleary added:

“To
help landlords explore new opportunities, we’ve extended our top
slicing feature across our entire buy-to-let range.

“It
means landlords can now use their surplus HMO income for future
property purchases to expand their portfolios.

“We
also offer refurbishment buy-to-let for works being completed under
permitted development rights, provided there are no structural
alterations or changes to the footprint of the property.

“This is a really exciting development as it allows landlords to
change the use of a property from a C3 dwelling house to a C4 HMO of
up to six bedrooms.�

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – More landlords investing in HMOs | LandlordZONE.

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