Landlords are now selling at a record rate despite house price falls

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In an almost unanimous decision, landlords are throwing in the towel, opting to take the cash and sell their property portfolios. It seems that the gravy train for buy-to-lets is well and truly over, and it’s time to put investment elsewhere.

View Full Article: Landlords are now selling at a record rate despite house price falls

Landlords looking to re-mortgage ‘should fix ASAP before another rate rise’

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Specialist buy-to-let broker Mortgages For Business (MFB) has urged landlords approaching re-mortgage to secure a new rate as early as possible following the latest update on inflation.

The ONS Consumer Price Index showed that inflation reached 6.8% in July, down from 7.9% in June, and although inflation is likely to fall to as low as 5% in the final quarter of the year, the Bank of England is expected to increase the base rate in September, probably by a further 0.25%, explains MFB MD Gavin Richardson (main picture).

“I recommend securing a new rate as early as possible,” says Richardson. “For some lenders, this can be up to six months before the end of your early repayment charge period.

“If mortgage interest rates decrease, many lenders allow you to switch to a more competitive product should one become available before you complete.

“Either way, you’ll have financial security and confidence that you’re on the most suitable mortgage for your circumstances.”

Before 21st September

Those landlords on a tracker or variable mortgage that follows the base rate have time to secure a fixed-rate deal before the next Monetary Policy Committee meeting on 21^st September.

“If you wait, you will see your mortgage repayments increase once again following the base rate rise,” he adds. “It’s worth exploring your fixed-rate options with a broker to see how much you could save on your monthly payments.”

MFB believes the latest inflation figures will act as a barometer for the MPC, which has increased the base rate 14 consecutive times, rising from an all-time low of 0.1% in December 2021 to 5.25% following this month’s increase.

Richardson adds: “As long as inflation continues the same downward trajectory though, we forecast the next rise will be the final increase this year.”

Read more about mortgages

View Full Article: Landlords looking to re-mortgage ‘should fix ASAP before another rate rise’

Court delays for landlords evicting tenants ‘at their worst for 30 years’

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Evictions expert Paul Shamplina says UK court delays for landlords are the worst ever he’s seen during his career within the private rented sector.

Shamplina, who is Chief Commercial Officer at Hamilton Fraser and founder of Landlord Action says the extraordinary delays, which in one recent case saw a landlord seeking eviction having to wait five-and-a-half months for a hearing at Romford Magistrates’ Court, says unless this is fixed the government’s plans to abolish Section 21 ‘no fault’ evictions will cause even more chaos.

As trade association Propertymark has outlined this week, a third of all possession cases are currently Section 21 notices which are ‘accelerated’ claims that bypass the court system.

The Renters’ (Reform) Bill plans to remove Section 21 and extend the grounds for possession under Section 8 instead – which will mean many more cases have to go through the courts.

Urgent review

Trade gris urging its 21,000 members to write to Justice secretary Alex Chalk, asking him urgently review capacity with the courts before abolishing no-fault evictions.

“It’s good that Propertymark members are being asked to put pressure on the Ministry of Justice,” says Shamplina.

“I totally agree with Propertymark that you can’t think about banning Section 21 until landlords have confidence in the courts, which are in the worse shape in my 33 years spent working in the legal sector.

Distraught

“It’s clear that we need more judges and more bailiffs when all the previous ‘no fault’ cases end up in court – my staff at Landlord Action have endless conversations with distraught landlords about court delays as it is – and when the ban is announced, there will be landlord panic.

“It’s time to bring the Housing Court conversations back as a priority; I attended a Housing Court Working Group in October 2019, then Covid happened and then it fell off the radar. 

“It all links into court reform and the abolishment of Section 21 and updated grounds for possession. Landlords and agents need confidence, which now is at a real low.

“For example, one court in central London is currently taking 40 days to correspond with us via post.”

Propertymark chief Nathan Emerson (pictured) adds: “The ability of landlords to access a swift, efficient, and cost-effective justice system is a key component of a successful lettings industry.”

View Full Article: Court delays for landlords evicting tenants ‘at their worst for 30 years’

I had to pay one day’s council tax?

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Hello, North Norfolk district council is charging me one day’s council tax because the tenant moved out at 11am on the 9 /8/23. The new tenant moved in on the 10/8/23.

As the tenant didn’t sleep at the house on the 9/9/23

View Full Article: I had to pay one day’s council tax?

Housing Benefit freeze sees tenants falling ‘£200 short’ every month

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Families on low incomes are grappling with a monthly deficit of £200 due to a stagnant housing benefit that doesn’t cover soaring rents, a charity warns.

Housing advisors from Wiltshire Citizens Advice told the BBC that tenants relying on Housing Benefit are facing a severe shortage of rental properties that are covered by it.

View Full Article: Housing Benefit freeze sees tenants falling ‘£200 short’ every month

Rising mortgage rates have reduced landlord earnings by £4,000 on average this year

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Landlords have effectively lost more than £4,000 in earnings per property during the last year thanks to soaring mortgage rates and rising costs.

A landlord taking out a two-year fixed-rate BTL mortgage in June 2022 would have received an average monthly return of £609 from rental income after paying interest, adding up to £7,312 a year, according to personal finance comparison site finder.com.

Taking out that same mortgage in June 2023 would have made 59% less in average monthly returns at just £250, working out at £2,995 – a drop of £4,317 in yearly income.

New deal

The platform compared monthly average buy-to-let mortgage rates, house prices and rent prices to estimate the returns and believes the rising cost of owning a rental property has made it far less appealing for landlords to sign up for a new deal.

Buy-to-let interest rates are still climbing and reached an average of 6.18% in July, while the average UK house price in June was £287,546, according to the latest ONS House Price Index when the average buy-to-let mortgage rate was 5.45%.

As a result, between January and March this year, the value of buy-to-let mortgage lending dropped by 40% to £5.8 billion on the previous quarter while the value of loans granted also dropped by 44%.

The share of homeowner loans granted for buy-to-lets was also just 9.8% of total mortgage lending in Q1, the lowest share since 2011, which suggests that fewer people are looking to invest in the sector, according to Kate Steere (pictured), housing expert at finder.com.

“We’re seeing a trend of landlords pulling out of the buy-to-let market as consecutive base rate hikes have made it unprofitable for them to continue,” says Steere.

“This will have a worrying impact on an already competitive rental market, leaving renters with fewer options and rising costs as they attempt to navigate the cost-of-living crisis.”

Read more about mortgage interest rates.

View Full Article: Rising mortgage rates have reduced landlord earnings by £4,000 on average this year

Unlock Tax Benefits and a Sunny Lifestyle: Introducing Malta’s Global Residency Programme

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Are you a UK property investor on the lookout for smart ways to minimize your tax burden while exploring new horizons? Imagine a life where over 300 days of sunshine, enticing tax benefits, and a remarkable lifestyle converge. Intrigued? Let us introduce you to an exclusive opportunity that could reshape your financial landscape: Malta’s Global Residency Programme (GRP).

View Full Article: Unlock Tax Benefits and a Sunny Lifestyle: Introducing Malta’s Global Residency Programme

Even upmarket landlords face ‘stark choices’ now says leading property figure

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Landlords in the capital’s prime rental sector are facing a stark choice between topping up a rent shortfall or selling up.

Luxury residential property expert, Jo Eccles, reports that highly leveraged landlords are coming under serious cost pressures as fixed rate mortgage deals come to an end. Stress testing by lenders means some are finding they can borrow 30% less than before, forcing them to make up the shortfall or sell.

The founder and MD of Eccord, which manages £1.5 billion worth of residential property in prime central London for portfolio and individual landlords, says: “Those with the financial flexibility are reorganising their finances to pay down debt and raising rents by an average of 15% at renewal, but it isn’t always enough to meet their increased borrowing and service charge costs – which are up 30% in some buildings.”

One landlord has seen his mortgage repayments more than double from £4,000 a month to £9,000 a month and can’t sell due to cladding issues.

Rent increase

“We’ve secured him a significant rent increase of 19% but he has still swung from a monthly surplus to a £2,000 shortfall, which he’s having to personally top up each month.

“This illustrates that the challenges landlords are facing can’t always be resolved with rent increases alone.”

Some now have no choice but to exit the market which will further diminish supply and cause more hardship for tenants, believes Eccord.

“For landlords who are able and committed to remaining in the market long term, we are seeing them review their existing arrangements,” she adds.

“Many are choosing to move away from underperforming letting agents or property managers with high staff turnover, as they recognise the importance of tenant experience now more than ever, if they’re to achieve high rent increases.”

Read more about rising mortgage rates.

View Full Article: Even upmarket landlords face ‘stark choices’ now says leading property figure

Essential Considerations Before Selling Your Rental Properties

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When it comes to the decision of selling your rental properties, your thought process is respected. However, before taking the leap, it’s crucial to delve into some essential aspects that might influence your choice. One such critical factor is Capital Gains Tax (CGT)

View Full Article: Essential Considerations Before Selling Your Rental Properties

Section 21 removal will cause chaos in courts

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A leading industry body is warning the Justice Secretary that the removal of Section 21 will cause harm to the legal system.

Propertymark has written to Alex Chalk about the level of widespread concern from landlords and letting agents about the capacity of the courts to handle possession cases.

View Full Article: Section 21 removal will cause chaos in courts