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Two thirds of UK landlords now planning to buy new properties
Landlords in the UK are looking to expand their property portfolios at an accelerated pace over the rest of 2015, according to a new property investor survey. Some 65% of UK landlords plan to buy at least one further property in the next six months up from 55% looking to buy six months ago, says the research from specialist buy to let mortgage broker Mortgages for Business. . Just 8% of landlords currently plan to sell any property, while 27% do not intend to either grow or reduce the size of their property portfolio over the next six months. ‘Landlords are better capitalised and now more confident about reinvesting. A strong rental market is being driven by tenants moving to make the most of job opportunities, and now gradually starting to earn more too,’ said David Whittaker, managing director at Mortgages for Business. ‘That new surge of demand is putting more upwards pressure on rents, and landlords are only just beginning to supply more homes to let in response. On top of this, after the surprise stability of a majority government, landlords will almost certainly see a short term boost of house price growth while the threat of damaging regulation has been lifted for at least the next five years,’ he added. When choosing how to finance borrowing, landlords are also changing their approach. Some 26% would currently prefer a variable rate deal for a new buy to let mortgage, up from 23% in November 2014. However, choosing to fix repayments for just a short time period is actually slightly less popular than six months ago. Currently 22% prefer a two year fixed rate mortgage, down marginally from 23% in November, while 12% would go for a three year fix, down from 15% in November. Some 30% would still choose the safety of fixing their mortgage repayments for five years, though this is also slightly down on 31% in November. By contrast, very long term fixes appear to be gaining popularity and 10% would now choose a 10 year fix, more than the 8% recorded in November. Landlords’ average loan to value ratios have fallen in the space of the last six months. Overall, the average overall LTV ratio for UK landlords now stands at 54%, down from 57% in November. The proportion of landlords with overall borrowing above 75% LTV has fallen to just 12%, down from 16% in November. The vast majority have some borrowing, though below 75% LTV. This now represents 81% of landlords, up from 79% in the previous survey. Currently only 6% of UK landlords have no borrowing whatsoever. ‘Over the medium term, interest rate expectations have never been friendlier to landlords. This is clearly reflected in the proportion willing to eschew guaranteed stability in favour of some immediate savings. Over a two year period this may be rational, and landlords as a whole don’t tend to take extraordinary risks with their financial position,’ said Whittaker. Continue reading
RICS launches quality mark for the UK property and construction industries
The Royal Institution of Chartered Surveyors is launching a new initiative to make the land, property and construction sector in the UK more inclusive and diverse. The land, property and construction sector is not known for its diversity but RICS said it has been working across the industry and learning from other professions to find out what is not working and what can be done differently. Findings from the organisation’s research have led to it launching a scheme known as the Inclusive Employer Quality Mark, designed to help firms gain a competitive advantage and a diverse workforce. Launching next month, the Inclusive Employer Quality Mark asks employers to pledge their commitment to adopting and continually improving several key principles including increasing the diversity of the workforce engaging and attracting new people to the industry from underrepresented groups. It also includes developing training and promotion policies that offer equal opportunities for career progression, introducing flexible working arrangements and adaptive working practices and creating an inclusive culture where all staff engage with developing, delivering, monitoring and assessing the diversity and inclusivity policies. It also wants firms to continually refresh and renew commitments to being the best employer as well as sharing and learning from best practice across the industry Accompanying each of RICS’ these six principles are multiple ‘proof points’, against which signatories will be required to assess, on a bi-annual basis, the actions they are taking and the outcomes to date. RICS has created two separate criteria metrics too so that both small and large firms are assessed fairly. RICS will be using the assessment to document the outcomes and trends for the profession as a whole. Once a firm becomes a signatory they gain access to details about how they are performing according to RICS standards across all six principles in comparison with their peers, as well as a spread of support, ideas and case studies from high performers to help drive up improvements for all. Signatories will be published on the RICS website, and member firms may then use the tag line ‘signatory to the RICS Inclusive Employer Quality Mark and the logo’. Louise Brooke-Smith, RICS president said the launch will mark a step change that the profession needs. ‘This initiative has been discussed with, and has the support and encouragement of, a number of leading firms, both large and small, across the land and property sector,’ she explained. ‘Employee needs are changing, along with their expectations and demographic make-up. The competitive war for talent has also shifted the focus to attracting and retaining talent in the industry. Only by doing so, can we deliver a sustainable future. By committing to the Quality Mark, firms will gain a competitive advantage. An inclusive approach allows organisations to reflect and engage with their clients more effectively and efficiently,’ she added. Kim Worts, external affairs director at RICS,… Continue reading
Scottish rents 1.6% higher than a year ago, latest data shows
Rents in Scotland have increased 1.6% compared to last April, marking a step up in annual rent growth after a period of cooler price rises, according to the latest index. This is the fastest year on year increase in rents for five months, according to the Scotland buy to let index from Your Move, one of Scotland’s largest lettings agent networks. Coming back from a winter dip, the pace of rent growth has increased solidly from a 1.3% annual rise in March 2015, and 1.1% in February. As of April 2015, the average residential rent across Scotland stands at a record £539 per month, matching the peak set in November 2014. While rent growth is quickening on an annual basis, in the month to April, average Scottish rents rose just 0.1%, the data also shows. ‘Scottish rents have peaked at a new apex, as lethargic supply of rental homes fails to match up to towering demand for homes to let. After rental prices plateaued over the winter months, we’re seeing annual rent rises start to ascend again,’ said Brian Moran, area lettings director at Your Move. ‘Affordability in the private rented sector now rests on new housing becoming available to let, and more choice for tenants, to keep rents competitive and rent rises in check. Solid rent rises offer clear encouragement for those contemplating buy to let investment, but fears of prohibitive rent controls and additional tenancy legislation in Scotland may be off putting, which could choke off new supply of rented homes, and drive up prices for tenants,’ he explained. Compared to last year, rents are now higher in three of five regions of Scotland. Rents in Glasgow and Clyde have experienced the greatest year on year increase, with typical rents up 5% since April 2014. The East saw the second biggest annual rise in rental prices at 1.7%, setting a new record for the area in April 2015, with the average monthly rent now £531. In the South of Scotland, rents have climbed a more modest 0.7% in the past 12 months. In two regions of Scotland, rents are now cheaper than they were a year previously. Edinburgh and the Lothians has witnessed the biggest fall in rent prices year on year, down 0.8% in the 12 months to April 2015. In the Highlands and Islands, rents are now 0.6% lower than in April 2014. On a monthly basis, rents have risen across three of five regions in Scotland. In Glasgow and Clyde, the average rent has climbed 0.8% in the past month, to £563. In both the East and the Highlands and Islands, rents have risen 0.3% since March. Rents in the South of Scotland have remained static month on month, staying at £498, the lowest average rent price across the whole of Scotland while Edinburgh and the Lothians is only region in Scotland to witness… Continue reading
