Tag Archives: london
Over half of UK landlords plan to expand their portfolios in 2015
Over half of landlords in the UK are looking to buy more property in 2015 and are feeling bullish about the new year, according to a new study. The optimism is fuelled by the growth in demand for rental property, falling rent arrears and rising rent prices during the last 12 months, says the research from online letting agent PropertyLetByUs. The survey also found that 50% of landlords have achieved yields of between 6% and 8%, 10% of landlords have achieved yields of over 8% and 40% of landlords have achieved yields of 4%, over the last 12 months. The firm says that rising property prices has meant that almost a third of landlords are enjoying sizeable equity in their property, with a loan to value ratio of between 30% and 40%. It also says that with booming tenant demand, it is no surprise that only a quarter of landlords are planning to cash in on rising property prices by selling some of the their buy to let properties in 2015. ‘Landlords have enjoyed good rental yields and increased asset values in 2014,’ said Jane Morris, managing director of PropertyLetByUs, adding that they have also experienced high levels of tenant demand, with just 3% reporting that it is declining, according to recent research from Paragon Mortgages. The study shows that overall, 41% of landlords surveyed said tenant demand was growing or booming and 51% said demand was stable. Home ownership has fallen to its lowest level for a quarter of a century and with property prices continuing to increase, tenant demand is set to grow during 2015 and beyond. ‘Over the last year, we have seen a surge in landlords across the UK using our website, particularly in the North, London and the South East. We have also seen a sharp rise in the website’s advertised properties, up by 50% since May 2014,’ explained Morris. Continue reading
International demand for prime central London property remains strong
While much has been written about the UK 2015 general election causing uncertainty in the central London prime property market, international demand remains strong, it is claimed. Independent property buying agency Black Brick says it has completed on a dozen separate transactions for investment clients in recent weeks, all with budgets below £2 million and in the past month it has also signed new clients from Brazil, Egypt, and Qatar with budgets from £2 million to £4 million. ‘We continue to see interest from a range of buyers, including both investors and owner occupiers. Other developments of note include a significant rise in Russian interest across both the rental and sales markets in recent weeks,’ said Camilla Dell, Black Brick managing partner. ‘The return of the Russians comes despite the collapse of the rouble against the pound. And while the sharp drop in the price of oil clearly has its own implications for net wealth in the Middle East, West Africa and Russia, the strength of the dollar does at least offer some compensation for potential buyers of prime central London property with US dollar assets,’ she explained. She also pointed out that Sterling's 9% drop against the so called 'greenback' and a fall of similar magnitude against the Chinese yuan since the middle of the year is giving buyers in these increasingly significant asset pools a welcome currency discount. ‘We expect Chinese buyers in particular to dominate the high end of the prime property market in central London in 2015. We also expect political concerns to continue to be a driver of overseas demand in 2015 and beyond,’ she added. However, for the domestic market, 2015 is likely to be a year of two very clearly defined halves split by the general election. ‘Should the Conservative party win the May 2015 election, we expect an extremely active London property market and the opportunity to drive a hard bargain with vendors will be significantly reduced if not lost all together. We believe the period between now and the general election may prove an attractive entry point to this property sector over the long term,’ said Dell. She does not expect a Labour victory to have a dramatic impact on London house prices, though some short term weakness in prices is likely. Hot spots for 2015 include Marylebone with its mix of high quality independent retailers and restaurants. Dell said that Marylebone has one of the best high streets in London and is conveniently located with elegant period housing stock and new developments. For investors the firm is tipping Maida Vale as one of the best areas in London to focus on in 2015. Overlooked by buyers in favour of neighbouring St John's Wood, Maida Vale looks extremely good value compared to its more expensive neighbours, according to Dell. She also pointed out that prices are still well below £1,500 per square foot and this is rare for an area with such excellent shops and transport links to central… Continue reading
New UK property tax measures set to boost buy to let
The UK’s new property tax rules are set to provide a boost to both the sales market and buy to let market, it is claimed. The new rates will give the biggest savings to buyers at the lower and middle end of the market and according to Stephen Ludlow, chairman of lettings age Ludlow Thompson, as buy to let landlords usually invest in properties below £937,500 the changes will give almost all investors in this market a boost. ‘The changes in stamp duty will see the biggest increase in net returns for more modestly investments such as smaller properties in Zone three of London, city centre apartments, flats above shops, ex-local authority property and property in secondary locations,’ he said. ‘The reforms could encourage those who may have been delaying their purchase until after the election to reconsider. The new rates should also provide a boost to the sales market and result in an increased number of purchases in this usually quiet time for residential property deals,’ he added. Graham Davidson, managing director of Sequre Property Investment, also believes the change is a positive one for the buy to let market. For example, a buyer of a high end two bedroom Manchester city centre apartment at a price of £150,000 will now pay just £500 stamp duty, a saving of £1,000. ‘However the impacts on the £925,000 plus market will certainly be felt throughout the industry, in particular by the higher end London property market. We would expect to see this contribute to a further slowing of the market there,’ he added. Alison Platt, group chief executive of Countrywide, said the change is likely to attract more home buyers to the market. ‘So for those who are thinking of selling their property, there has never been a better time. Equally for buyers, a stable interest rate environment and the availability of a range of attractive mortgage products, means that now is an ideal time to purchase a home,’ she explained. But Jamie Lester, head of Haus Properties, thinks it send shockwaves through the London market, particularly in the £1.5 million to £2 million price range. ‘This market has been especially active with buyers sticking below the 7% stamp duty and proposed mansion tax thresholds. These buyers will now have to pay a significantly higher amount,’ he said. ‘For example, someone purchasing a £1.9 million property would have paid £95,000 under the old stamp duty rules, whereas under the reforms they will be paying almost £50,000 more at £141,750. However, those buying just above £2 million won't be quite so heavily hit, for example, someone purchasing at £2.1 million will now be paying £165,750, an increase of £18,750,’ he explained. Camilla Dell, managing partner of independent property buying agency, Black Brick, said there is no question that the old stamp duty bands were in desperate need of reform and overhaul. ‘For 98% of the UK population these changes are therefore clearly good news. But… Continue reading
