buy-to-let mortgages
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Latest property news
Landlords face crunch mortgage decisions within 12 months
Research from The Mortgage Lender shows 40% of mortgaged landlords have to renew their loan in the next year, and a third may raise the rent.
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Latest property news
Rents to jump even higher as landlords face mortgage hikes
The NRLA says 60% of private landlords fear rising mortgage costs next year, which could force rents up even more.
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Latest property news
REACTION: Bank of England maintains interest rate at 5.25%
The Bank of England has decided to keep the base interest rate at 5.25% in a close vote of the Monetary Policy Committee.
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Latest property news
Investors hung out to dry as BoE gets tough
The Bank of England has announced plans to introduce more stringent checks on buy-to-let lenders amid concerns that the property investment market is moving into bubble territory. The Bank’s Prudential Regulation Authority said it was putting in place a “guardrail” to prevent banks from making risky loans, warning that 20 per cent of lenders were not carrying out the necessary checks. The main concern is that a bubble in the buy-to-let market could cause a wider housing market slowdown, which would be bad news for millions of people who have invested in property, as part of their retirement. More than 1.7 million properties have buy-to-let mortgages, which represented 17 per cent of loans used to acquire residential properties last year. “You might form expectations about what the necessary long-term saving to support your retirement will be, which can then (if house prices fall) be transformed quite suddenly in ways that, frankly, are unwelcome,” Bailey said. Andrew Bailey (left), who currently heads up the Prudential Regulation Authority, told the press that the Bank of England has “nothing against” buy-to-let landlords, but believes that new restrictions on mortgages for buy-to-let investors will help reduce the risk of “very volatile boom and bust…
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Latest property news
Bank of England to consult on buy-to-let ‘prudence’
The Bank of England has published a consultation paper (CP) which seeks views on its proposals which could result in strict limitations for buy-to-let mortgages. David Smith (left), the Residential Landlords Association’s Policy Director said, “The Bank needs to be careful that it does not over-react to the current surge in buy to let applications which are aiming to beat the tax increases coming in April. ‘These include a three percentage points extra levy on stamp duty and abolition of mortgage interest relief. It is likely that the impact of these will significantly reduce the demand for borrowing. “We would urge the Bank to tread carefully and avoid any premature moves that could stifle the supply of the 1 million rental properties the country desperately needs.” The consultation paper says: Underwriting standards for buy-to-let mortgage contracts – CP11/16 Background This consultation paper (CP) seeks views on a supervisory statement which sets out the Prudential Regulation Authority’s (PRA’s) proposals regarding its expectations of minimum standards that firms should meet when underwriting buy-to-let mortgage contracts. The proposals also include clarification regarding application of the small and medium enterprises (SME) supporting factor on buy-to-let mortgages. Summary of proposals The proposals seek to ensure…
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Latest property news
Buy-to-let mortgages to be overseen by BoE
Growth in the buy-to-let sector could soon come to a very abrupt end if the Chancellor George Osborne presses ahead with plans to regulate those mortgages available to landlords. The Chancellor announced late last week during a Treasury Committee hearing that he intended to give the Bank of England (BoE) additional powers to regulate the buy-to-let mortgage market. While the stock of owner-occupier mortgage lending has risen by just 2 per cent since 2008, buy-to-let mortgage lending has increased by more than 40 per cent over the same period. But growth could come to an end after the Bank, which already has the power to regulate the wider the residential mortgage market, was also given the authority to regulate the buy-to-let sector too, should it wish to do so. BoE warned last month that Britain’s buy-to-let market poses an increasing threat to financial stability because rising property prices expose vulnerabilities that could magnify a housing market crash. The Financial Policy Committee, led by Governor Mark Carney, said landlords were more sensitive to booms and busts, often buying property when prices increase but also selling homes swiftly during a downturn. Peter Williams (left), Executive Director of the Intermediary Mortgage Lenders Association…
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Housing Market
Young investors set to fuel buy-to-let boom
Many young people may be struggling to get a foot on the housing ladder, but that does not mean that they do not recognise the potential benefits of investing in residential property. Fresh research provided by letting agent Rentify shows that nearly half – 49 per cent – of 18-39 year olds believe that acquiring buy-to-let property represents the best investment option in the UK today, with almost 4million people in this age group actively seeking to buy an investment property. With buy-to-let landlords having benefitted from a booming property market earning returns of up to almost 1,400 per cent since 1996 – capital growth and returns combined – it is easy to understand why it is an investment type that appeals to many people across all age groups, not just the young. George Spencer (left), CEO at Rentify said, “The fact that 49 per cent of first-time buyers would consider investing in buy-to-lets is fantastic and shows that there are more options out there and more people who want to get on the ladder.” But-to-let continues to beat returns on all other mainstream investments, including commercial property, UK government bonds, shares and cash, and that trend looks set to…
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Uncategorised
Buy-to-let returns beat all other mainstream investments
Buy-to-let landlords have earned returns of up to 1,400 per cent since 1996, outstripping those returns from investment in shares, bonds and cash. The research by the Wriglesworth Consultancy, on behalf of Landbay, found that on average, £1,000 invested in a buy-to-let asset in the final quarter of 1996 was worth £14,987 by the end of last year. This was more than four times than the equivalent investment in commercial property, UK Government bonds or shares and seven times the return on cash. Despite a few downturns in the housing market over the past 18 years, including the slump following the financial crisis, overall strong levels of capital growth and soaring rental values have ensured that landlords have reaped the rewards. The analysis was based on a buy-to-let investor using the rental income to pay off their mortgage, clearing it after 13 years and cashing in during the final five. Many of those buy-to-let investors who have not sold their properties, but continue to hold on to their residential assets, may have found that the rental value of their property investments may have risen further in recent months. The latest HomeLet rental index shows that residential rents across the UK…
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Features
Developing portfolios
Pitiful savers rates, rising rents and low cost mortgages are fuelling demand for buy-to-let investments, presenting agents with revenue making opportunities, as Marc Da Silva reports.
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Features
Property investors – fill your boots!
With buy-to-let mortgage borrowing rates plunging and rental values rising, landlords are adding to their buy-to-let portfolios, says Marc Da Silva.
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