BREAKING: ‘Staycation’ investment boom begins as mortgage lenders report being ‘swamped’

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A staycation property investment boom is on the cards as buyers look to take advantage of hordes of Brits opting to holiday in the UK.

Queries from investors wanting to buy holiday lets are already up 25% since the Chancellor announced the stamp duty holiday last week, according to cottages.com research, and new products are being launched by lenders to capitalise on demand.

This week, YBS Commercial Mortgages reported that staycations are soaring in popularity and announced a new mortgage deal for holiday lets aimed at limited company borrowers.

The Ipswich Building Society (IBS) even had to temporarily pull its holiday let market product earlier this month after it was swamped by demand.

Chief executive Richard Norrington tells LandlordZONE that it hopes to reinstate it as soon as it’s cleared the backlog of current applications.

“We, and many other lenders have been overwhelmed with holiday let enquiries and so we know there is clearly a huge demand for holiday let mortgages as Brits abandon their plans for overseas holidays and look for alternative options in the UK,” he explains.

The number of holiday let mortgage products currently available is down from 162 to 60 while the number of providers has fallen from 20 to nine since 5th March, according to data firm Moneyfacts.

In June, there were 34 buy-to-let mortgages launched that accepted holiday lets, of these, 28 mortgages were specifically for holiday let mortgages. 

Moneyfacts finance expert Eleanor Williams reports that despite this reduction, the buy-to-let market seems to be moving slowly towards recovery.

She tells LandlordZONE: “We hope we will soon see more options for would-be investors to consider. Indeed, in a boost to this sector of the market, today has seen Leeds Building Society relaunch their two-year fixed range of holiday let products.” 

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – BREAKING: ‘Staycation’ investment boom begins as mortgage lenders report being ‘swamped’ | LandlordZONE.

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What will students want from their accommodation post-coronavirus?

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The coronavirus pandemic has disrupted almost every facet of society. For landlords and property owners, the disruptions have been significant, with many tenants facing furlough or redundancy and no way to pay rent. This issue has been even more challenging for student property providers

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Legal advice on property for sale with multiple agents?

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I need some legal advice on a property for sale, please. Three agents were advising on our property for sale back in September 2019. There were few offers, which were not accepted until January this year.

Agent A forwarded an offer in January

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LATEST: Wales resumes preparations for ‘bombshell’ six-month long notice periods

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The Welsh Government is to resume plans to reform possession rules which would triple the notice period a tenant must be given to six months.

It had paused the legislative process for the Renting Homes (Amendment) Bill back in April as the coronavirus pandemic raged but has now announced a timetable which should see the new regime for the private rented sector in place on 1^stApril 2021.

The proposed legislation will extend the minimum notice period from two to six months as ministers want tenants to be given much more time to get ready to leave a property after a landlord has decided to take repossession via a ‘no fault’ Section 21 eviction, particularly if they have children in a local school, are in ill health or want to find a property to rent nearby.

If passed, a letting agent or landlord wanting to evict a tenant via a no-fault notice will have to wait until six months have passed from the beginning of the tenancy, serve notice and then wait for a further six months.

The National Residential Landlords Association has said that the bill represents, “further neglect of the reasonable arguments of conscientious, compliant, and responsible PRS landlords”.

It adds that by extending the notice period to six months, a landlord could suffer half a year of arrears or the tenant’s neighbours half a year of anti-social behaviour, before the property is returned to the owner.

Welsh Ministers are already bringing in significant changes to the rental sector with the introduction of the Renting Homes (Wales) Act which replaces the secure tenancy and assured tenancy regimes which currently operate under the Housing Act 1985 and Housing Act 1988 respectively.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – LATEST: Wales resumes preparations for ‘bombshell’ six-month long notice periods | LandlordZONE.

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Discussing Unique Property Reference Numbers with Kate Faulkner

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Welcome to the Landlord and lawyer Podcast with myself and Ben Beadle.

Our first episode is now live. Read our article or listen to the post below. Click the button to listen to the episode on Apple

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Notice to Quit received – first time for everything?

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One of my tenants has issued me with a Notice to Quite after she realised I wasn’t bluffing when I issued a Section 21.

Anyway she is due to leave on 27th July, with a debt that I can’t get agreed for a TPD with via DWP (not that I have much time now anyway)

Is there anything I can do in the meantime while she IS still in the property to try and get some of the water bill debt paid off that she has accrued.

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Private rented sector to get a boost from planning de-regulation

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Richard Rowntree, managing director mortgages, the Paragon Banking Group, writing for Mortgage Strategy, says that landlords need to keep abreast of market trends and “should be reassured to know that demand for rented property remains.”

The Office for National Statistics forecasts indicate that there will be around 1.6m additional households in England by 2028, and according to Mr Rowntree, a significant number of these will be rented. “If landlords can provide good quality homes that meet a diverse mix of needs, people will want to live in them,” he says.

The Government has indicated a relaxing of the planning regulations designed to give developers more flexibility, remove red tape and speed-up the planning and home building processes.

Boris Johnson has said the new regulations will make it easier to build better homes in locations where people want to live, and will kick-start the construction industry in the process. This initiative is supported by the stamp duty holiday announce last week by the Chancellor, which seeks to stimulate property sales.

It’s too early to say exactly what the planning changes will be, and we should not get over excited, but “at first glance there are some interesting changes here,” says Mr Rowntree.

Even before Covid-19 retailers and the British high street were struggling to respond adequately to the structural changes hitting the sector. The sector is changing and has been for some time. No amount of Mary Portas style town centre initiatives seem able to reverse this trend: the attractiveness of the growing online economy, the ease and choice offered by online shopping, and the convenience of out of town retail parks, have seen to that. Covid-19 has just accelerated this process by a few years!

What this shift does mean is that the high street presents landlords and developers with more and more empty buildings, buildings whose values have been decimated and that are ripe for re-purposing. We’re unlikely to see “student flats and HMOs popping up on Oxford Street any time soon,” says Mr Rowntree, but those endless boarded up shops present a fantastic opportunity “to see city peripheries and smaller towns ‘levelled up’ as some of the biggest beneficiaries of the new regulations.”

So, thinks Rowntree, the buy-to-let market can play “a significant part in breathing life back into fading areas, providing homes for customers needed to help independent shops, cafes and restaurants thrive.” Research undertaken at Paragon suggests that landlords have the means to do this after securing funding that will enable them to take full advantage of the Stamp Duty holidays announced by the Chancellor.

Investors need to be careful how they gauge the “after Covid” effect. With more home working and the need for reducing our need and ability to congregate for work and leisure, while increasing desire for properties in open spaces, empty retail town centre units may not provide all the answers.

A move from city centres to urban offices, with ease of transport by road and parking space, gardens and open spaces may be a distinct possibility. It is perhaps “too early to tell if the things that currently top tenant wish lists are a temporary reaction to recent restrictions or a longer-term shift in how we view our homes,” says Mr Rowntree.

“Even if these trends are the start of something more permanent, and part of the ‘new normal’ that we’re still talking about, it clearly won’t apply to everyone. Not everyone has the desire or means to live in suburban or rural properties with big gardens. Not everyone will work from home all week.

“The key here is ‘good quality’. Deregulation increases risk and it’s important to acknowledge that some poor conversions resulted from the planning changes on disused offices.

“We must learn lessons from the past while addressing the issues of today. Sustainability is an obvious one, these planning reforms encouraging the development of brown belt land over green is indicative of environmental issues returning to the radar after being side-lined by coronavirus.”

Mr Rowntree says he is confident that landlords can do this, that the sector will again show resilience required and “that the growing number of professional portfolio landlords are in this for the long term and are well placed to deliver.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Private rented sector to get a boost from planning de-regulation | LandlordZONE.

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Asking rents reach record highs as rental market surges after lockdown

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Both rental demand and asking prices have hit record highs thanks to the seven-week pause in the lettings market.

Rightmove reports that asking rents outside London hit a record £845 per month, up 3.4% on the same time last year, and the highest annual rate since 2016.

Rental enquiries across UK agencies were at an all-time high on 6th July and are now 40% up on this time last year.

And although new rental listings dropped by an average of 50% during lockdown they’re now up 1% on the same time last year, while total available stock has also risen by 1% too.

Scotland and Wales saw the biggest gains year on year – up 10% to £786 and up 6.5% to £703 respectively.

In contrast, the capital’s asking rents started to fall throughout April and May by 0.6% and are now lower than this time last year at £2,046, according to the portal’s Rental Trends Tracker.

A surge in holiday lets landlords switching to long-term tenancies has also pushed up stock levels in cities including London – up 41% – and Edinburgh – up 34%.

Rightmove’s commercial director and housing market analyst, Miles Shipside, says this increase in rental demand may lead to further upwards price pressure, except in areas of over-supply.

He adds: “Many renters may feel they’ve been left out of the Chancellor’s recovery packages, but one glimmer of hope is that the temporary stamp duty savings may entice more investors to expand their portfolio. If this does happen, we could see more choice for tenants and in turn prices may stabilise for a while, but it will take some time.”

Rightmove’s survey of 400 landlords found that their biggest concern is their tenants falling into arrears, with 54% saying that this was a worry. Despite this, a quarter of them are still planning to expand their portfolio.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Asking rents reach record highs as rental market surges after lockdown | LandlordZONE.

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