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Demand from buy to let landlords for remortgages likely to rise in 2016
Buy to let remortgage transactions outstripped purchases by more than two to one in 2015 but this could be reversed in 2016, according to the latest industry sector index report. Remortgages for vanilla buy to let property accounted for 64% of transactions with Houses in Multiple Occupation (HMOs) and Multi-Unit Freehold Blocks (MUFBs) seeing even greater remortgage activity at 78% and 88% of transactions respectively, the data from specialist brokers Mortgages for Business shows. The results aren’t surprising, according to David Whittaker, managing director of Mortgages for Business. ‘For some time now landlords have been making considerable savings through remortgaging. Many have also been releasing equity to make improvements and plan further purchases,’ he said. ‘However, I anticipate that we will see a reversal of this trend in the first quarter of this year as landlords hurry to expand their portfolios before the stamp duty surcharge kicks in on 01 April,’ he explained. ‘The number of enquiries for purchase finance is already well ahead of where we were this time last year, particularly from those looking to sell their personally owned property into a corporate vehicle,’ he added. Although yields across all property types rallied in the fourth quarter of 2015, in real terms they continue to plateau as rental income fails to keep pace with rising property prices. However, returns for the more complex properties remain healthy and well above the psychologically important 6% mark. The number of lenders operating in the market remained static at 33. However, the number of buy to let mortgage products available to borrowers grew slightly to an average of 975. ‘It is unlikely that this average figure will be topped going forward unless new lenders enter the market, or some of the existing providers start to offer products to limited companies. Of course, that figure is only an average, at one point at the beginning of December our tracking system showed 1,168 products,’ Whittaker pointed out. Continue reading
New report challenges development in London to consider regeneration
London needs to build some 50,000 new homes a year over the next 20 years and some of this requirement can be accommodated by increasing the density of existing places, including local authority housing estates, it is suggested. Many such estates require updating and this can be done in a way that creates many more homes, a significantly improved living environment for existing and future residents, and better value for local authorities, according to a new report. This would be achieved by rebuilding estates in a street based pattern, fully integrated into the urban network of neighbouring streets, says the analysis by real estate adviser Savills which highlights the potential to deliver more housing by increasing density in well-connected areas as well as the benefits of building sustainable urbanism. The report estimates that at least 54,000 and up to 360,000 additional homes could be accommodated within existing local authority housing estates through a new approach to estate regeneration. It assumes that every existing resident would be re-housed under the same terms on the new streets. The report proposes a new ‘complete streets’ model, based on a permeable and well-connected streetscape, which Savills says would improve density and achieve a better outcome for all existing and future residents and greater value for local authority stakeholders. Many of London’s local authority housing estates were built at a time when London was depopulating, so were not built at optimum density. The report estimates that, had they been built in the 1960s and 1970s to the same density as complete streets, they would have housed a further 480,000 households. But, the report argues, low density has not equated to a higher quality of place in the majority of cases. Many of the capital’s estates were constructed in a manner that means they are cut off and poorly integrated with the rest of London and neighbouring local communities. The conventional approach to estate renewal, often controversial at a local level, is based on replacing the existing site with new high-mass blocks and towers in a similar layout but at higher density, which does little to improve the neighbourhood or create new place value. Savills has modelled this ‘contemporary regeneration’ approach against a ‘complete streets’ alternative, based on a detailed study of six estates across London. The alternative, ‘complete streets’ model proposes rebuilding estates in a street-based pattern, fully integrated into neighbouring streets and community. The analysis estimates that approximately 1,750 hectares of London’s estimated 8,500 hectares of local authority housing estates might be capable of regeneration using this approach. This could private somewhere between 190,000 to 500,000 homes, representing an increase over the number of existing homes of between 54,000 and 360,000. And because this approach creates opportunities for mixed use development and is fully integrated into the broader city, it also creates greater life chances and employment… Continue reading
Buying and selling a home is second most stressful life experience
Buying and selling a house is one of the most stressful life experiences, more so than having a child and second only to going through a divorce, new research for UK consumer organisation Which? has found. As many as seven in 10 people considered buying or selling stressful, according to the survey which asked people to rate how stressful they found each of life's major events, ranging from going through a divorce to buying a new car. While going through a divorce came out on top of the list of life's stresses, with 78% considering it stressful, buying and selling property followed closely behind, with 69% and 70% respectively finding either process nerve wrecking. Buying or selling a property was considered more stressful than arranging care for an elderly relative, having a child, changing jobs or getting married. The research also found that women found both buying and selling a property more stressful than men. Some 75% of the women found selling a property stressful compared to 66% of men. These figures were mirrored when it came to buying a property, with 73% of women finding the process stressful as opposed to 67% of men. Which? Mortgage Advisers says that buyers and sellers can reduce the strain. It advises people to be realistic about timeframes as buying and selling may involve being part of a chain. When it comes to finance, while seeking assistance from mortgage advisers may cost it is likely to save money in the long run and it adds that choosing a mortgage isn't just about finding the lowest rate, it's about finding a mortgage that's right for personal circumstances. It advises that when choosing a lender buyers should consider their reliability, range of products and the overall costs, rather than just the initial cost alone and invest in a quality conveyancer or property solicitor. While often online companies are cheaper, they don't always offer a full service. It also suggests building a good relationship with the property professionals involved as this helps gain a knowledge of what needs to be done and when and buyers should try not to over stretch themselves for that 'dream property'. If you end up in arrears, you may have financial trouble for many years. ‘We're a nation obsessed with home ownership, but when it comes to buying or selling, our research shows that it can be an incredibly stressful process. Thankfully there are a number of things you can do to reduce the strain, including speaking with a mortgage adviser early on to get your finances in order,’ said David Blake at Which? Mortgage Advisers. ‘Investing in good mortgage advice will ensure you find the best mortgage for your personal circumstances. To help avoid unnecessary stress when you're getting a mortgage, do ask about the reliability and service levels of any lender you're considering,’ he added. Continue reading
